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It's called CueCat, or simply, the Cat. At first glance, it looks like a mouse -- a computer mouse, that is. But what makes this new device from Dallas-based Digital:Convergence Corp., so different is that PC users can swipe bar codes on products and printed materials and be taken directly to specific Web sites. It's the leading edge of online marketing -- technology that aims to unite newspapers and magazines with the Net, old media with new.
Hundreds of thousands of these devices are being distributed free of charge to consumers through partner companies that include RadioShack, Forbes magazine, and dozens of newspapers across the country. Wired magazine will be sending its approximately 400,000 subscribers free CueCats along with their October issues. The idea: get readers to use the CueCat and hope it drives consumers to your Web site in droves -- or, better yet, to your advertisers' Web sites for a fee. But in the same sweep of the Cat, publications can also discover personal data about their readers and track their moves through cyberspace -- perhaps without their express consent.
How does it work? The CueCat is a handheld scanner shaped like its feline namesake and hooked up to a personal computer the way a mouse is. Run it across bar codes in newspapers or magazines, even on something like a Pepsi bottle, and the CueCat automatically brings up related Web sites on your computer screen. The CueCat can also be connected to users' TV sets, and Digital:Convergence has signed deals with NBC, CNBC, MSNBC, the Food Network, and the Home & Garden Television network.
FREE FOR THE ASKING: Digital:Convergence, which designed the CueCat, plans to give away 10 million scanners by yearend, many through RadioShack, which owns a 3% stake in the company. Forbes magazine was the first publication to use the system, sending approximately 810,000 of the $1.50 scanners to subscribers in late August. In its Sept. 11 "Best of the Web" issue, for example, bar codes were featured on several magazine articles and 55 ads. Forbes, which spent about $1.5 million on the mailings, says the codes brought in 30 more ad pages from companies eager to tap the technology's marketing possibilities.
Other deals are in the pipeline. On Oct. 1, the Dallas Morning News, as well as trade publications AdWeek, MediaWeek,and BrandWeek, will begin including bar codes with stories after sending scanners to their subscribers. Parade, the Sunday newspaper supplement distributed nationwide, also will include the technology on its pages, although it won't be distributing scanners. Instead, readers will be encouraged to pick them up at RadioShack or order them from www.getcat.com. "This is a very exciting time for the magazine industry. It's a new frontier," says Nina Link, president and CEO of the Magazine Publishers of America.
Digital:Convergence President and Chief Operating Officer Michael N. Garin says his company's technology provides the ability to link textbooks, owner's manuals, and other publications to Web sites. For newspapers, which have been fighting a losing battle to retain readers even as the Web grows as an information source, Garin predicts the technology "will revitalize the industry and protect it from its principal source of competition."
According to Garin, newspapers could, for example, run a bar code next to a classified ad that would connect readers to more information on the newspaper's Web site. For a sports fan avidly following the Olympics, a different bar code might be used to link Web surfers to, say, a win-loss record for races run by Australian gold medalist Cathy Freeman, or to detailed statistics and other information that could never be made to fit into the finite space of a newspaper page.
EMBEDDED SIGNALS. Sounds pretty nifty, right? But privacy advocates contend the CueCat claws away at users' anonymity without their being any the wiser.
Their objections stem from the fact that each CueCat comes with an individual I.D. -- a serial number, actually. Scan a code, and the CueCat's I.D. is transmitted and linked with the data that you provide when registering your CueCat via the Web site -- your name, e-mail address, and other personal data. Sure, users can make their own choices about whether to provide accurate information. But that tactic doesn't mollify privacy advocates.
First, they say privacy policies governing the CueCat's use and the information it collects aren't crystal clear in spelling out how the information will be used, both now and in the future.
And there's something else that's troubling privacy advocates. Want to use a CueCat with your television? It's easy to do since the CueCat comes with a special cable that connects a TV's audio jacks to the sound card of your PC. Once this connection is made, the CueCat's software listens for audio signals embedded in programs and advertisements. These signals, just like the ink-and-paper bar codes, prompt the Web browser to load specific addresses related to whatever was on the TV screen. Thanks to the cable and the hidden signals, there's no need for human interaction. Web sites will be zapped to you automatically. Log on, and they'll be there waiting whether you want them or not.
According to privacy advocate Lauren Weinstein, a member of the online privacyforum.org, the ramifications are very troubling indeed. In a recent forum posting, Weinstein wrote: "This sort of 'remote control' an advertiser or publication or marketer could have over a user's computer is significant and potentially far-reaching, even with the control mechanisms built into the CueCat system. This will be an area that will bear watching as it develops and is deployed."
SHADOWED IN CYBERSPACE How many people will hook up CueCats without realizing they are pumping out data about themselves? If history and human nature are any guide, the vast majority will never even think to read the CueCat's privacy policy or digest the fine print in click-through license agreements. And even if they took the time, such agreements are often a tad dense for the Web-surfing layman.
Privacy advocates also say that users aren't being made fully aware that every swipe of the CueCat will be tracked by Digital:Convergence. In its filings with the Securities & Exchange Commission, however, the company reveals: "We intend to use our CRQ and CueCat technology to develop and maintain a substantial database of consumer demographic information that our customers can use with our permission to conduct advertising campaigns."
What makes the CueCat different from any other form of online tracking -- the ubiquitous "cookies" left by visited Web sites, for example -- is that each user must register the software by providing what amounts to a thumbnail personal profile complete with age, gender, Zip Code, and other information. Each CueCat has a unique serial number associated with an individual user. So knowing who is scanning the bar code on soda bottles, candy wrappers, even a tube of hemorrhoid cream, could be extremely valuable to advertisers if those same surfers later visit a weight-loss site or a Web support group for victims of specific ailments. Combined with still more information collected about you elsewhere -- both online and off -- such databases could be highly intrusive, critics charge. "Unique identifiers can be exploited by completely different parties," claims Jason Catlett of privacy advocate Junkbusters.
QUESTION OF TRUST. Digital:Convergence insists the CueCat will be less intrusive than critics suspect. For starters, the company says, it will delete both the serial numbers and personal data for its major database and feature only lists compiled by anonymous demographic factors, such as age or product preference. The company further vows not to share identifiable personal data with marketers unless users give their permission. What's wrong with that, Digital:Convergence wants to know? After all, it argues, credit-card companies and phone companies have been doing much the same thing for years with no apparent harm to consumers.
Privacy experts counter that Intel, RealNetworks, Microsoft, and other companies have removed identifiable serial numbers from an array of technologies because they might be used to compile overly personalized e-dossiers on consumers.
The danger of collecting personal information recently was brought home to Digital:Convergence when hackers accessed the private activation numbers and other personal information of more than 100,000 CueCat users. The hackers apparently wanted to write their own software so that they could use CueCats without registering them.
Bottom line: This cat might not have your tongue -- but it could have your data. Just one more reason why, if you are concerned about online privacy, you need to ask questions about how personal information is being collected and what is being done with it.
Stepanek covers privacy issues for Business Week. Her column appears twice a month, only on BW Online. She invites you to discuss these issues on our Privacy Matters forum Edited by Douglas Harbrecht
Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
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