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Award Signals Start-Up’s Bright Future

Software Company Sheds Light on Web Privacy

A large glass trophy sitting atop a piece of paper with the exclamations of “Yeah, baby” and “Congratulations” greets visitors in the reception area of San Diego-based Enonymous.com.

The new furniture and state-of-the-art computers seem to stand out when walking to the office of Mark McEahern, founder and chief privacy officer. Although the seemingly uncluttered desks and bare walls betray the company’s start-up status, it’s the big ideas and ambitions that leave a lasting impression.

The Sorrento Valley-based company also left a good impression on the judges for the Celebration of Success Awards from the San Diego Software and Internet Council. Enonymous was named Software Start-up of the Year during the inaugural ceremony Dec. 9.

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That glass trophy in Enonymous’ office is a testament to the respect the company has generated in the local high-tech community; it was given to them that night by the software council.

The award category was designed for companies that are 24 months or younger, derive the majority of their revenue from software products and exemplify the “spirit of a true software entrepreneur,” according to Richard Custard, president of the council.

– Judges Measured

Companies’ Success

Judges reviewed each company and measured their success based on such things as the mission statement, financials, software development, sales, service and support, customer interviews, marketing and public relations, and other contributions or involvements.

McEahern, James Coyer and Tim Kane founded Enonymous.com in February 1999 in San Diego with the idea that business can thrive on the Internet without the collection of personal identification information. In fact, the company of about 25 employees raised the standards for itself and does not collect identifying information on its customers.

In November, the company released Enonymous Advisor, which is a free, nonobtrusive companion browser that gives consumers a rating based on the privacy practices of the Web sites they visit and an easy way to fill out registration forms.

Although the company has yet to generate revenues, Enonymous hopes to change the Internet and make privacy policies “a filter through which you can look at the Internet,” McEahern said. Already, about 20,000 people have downloaded the software since its release.

Custard believes the company could be successful since the privacy issue is the “biggest hurdle” for E-commerce. He added that Enonymous has also been successful in getting about $2.5 million in venture funding.

The company originally developed software for filling out registration forms with a focus on privacy. As focus groups reviewed alpha and beta versions of their product, privacy concerns kept popping up.

“There was a tremendous amount of concern and confusion on the side of users about how their information was used, stored and shared between companies on the Internet,” McEahern said.

– Privacy Inhibits

Internet Activity

The company did some research and discovered privacy concerns inhibited people from doing more on the Internet.

“We heard the concern and realized that there was something we could do about it,” McEahern said. “We looked at the industry and saw that privacy seals such as TRUSTe and BBBonline were out there doing important work by getting sites to disclose their privacy practices. The opportunity for us was to take that work and extend it.

“Most people don’t read privacy policies because they are long and often contradictory.”

Also, Enonymous didn’t just want to provide links to a Web site’s policy, so it came up with a four-star rating system. Currently, Enonymous has rated about 20,000 sites and re-analyzed between 5 and 10 percent of those The company bases their ratings on the Web site’s privacy policy and registration forms at the checkout counter.

Four stars are given to sites that only use contact information for a transaction. Three stars denote a site may share information and contact a person with explicit permission.

Two-star sites may contact an individual without permission, but will only share information with consent.

One star is given to sites that may share information without consent. The software also lets users know whether the site has no privacy policy or whether the site has not been reviewed.

– Privacy Policies

Often Confusing

Although privacy policies can be contradictory and companies may not provide warnings or options specified in the policy when collecting information from online customers, McEahern said that each company gets the lowest rating it deserves.

“In order to qualify for the four stars, (the companies) have to declare and be consistent with the segment that they will not share your information and that they will not contact you without your permission,” he said.

The Advisor can be downloaded from (www.enonymous.com) in a few minutes. Users can put personal information into a form filler that is stored as an encrypted file on that person’s computer.

When a consumer makes a transaction online, the user can use the Advisor’s form filler to automatically input their information and view the site’s privacy policy rating.

Site ratings that are questioned by users or companies are a high priority for the company. “We definitely have feedback loops in place to catch errors and we are very quick to respond,” he said.

McEahern said the first step is to tell consumers what is happening and the second is to make that information actionable. The next version of the software, which is scheduled for release next year, will not only give users a rating, but may direct them to sites that have better privacy practices.

Ultimately, the company would like to provide ratings that are comprehensive with respect to the company, according to McEahern. He cited AOL.com as an example of a four-star site; however, AOL, the proprietary service, has different policies regarding the use of personally identifiable information.

The rating “can be misleading because most people don’t make the distinction” between the site and the service, he said.

– No Privacy

Competitors Yet

As the company works on improving their software and rating system, McEahern notes that Enonymous has no real direct competitors in the privacy market.

Other companies like Montreal-based Zero-Knowledge Systems and San Diego-based Anonymizer.com tackle privacy issues from different angles, and charge for their services.

McEahern believes that the key to success on the Internet is finding a niche and doing something really well.

“We don’t want somebody else creating a privacy rating system. We want to have the best rating system there is that is the most comprehensive, accurate, relevant, complete and covers the most sites. To users, it’s not going to be all that helpful if there are 20 of them,” he said.

Enonymous is also in the process of several partnerships that will put the Advisor software in more hands.

In the future, Enonymous hopes to make money by providing Web companies with ways to customize services to consumers without using personally identifiable information.

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