News

Web Ad CEO Quits After Privacy Inquiry

9/05/2008 8:00 PM Eastern

NebuAd chief executive Bob Dykes has resigned his post after the “behavioral targeting” Web-advertising company became a focus of a congressional inquiry into the privacy practices of cable providers and telcos that were testing its system.

Dykes will join electronic-payment technology provider VeriFone Holdings as chief financial officer, VeriFone said last week.

NebuAd’s current president, Kira Makagon, will become CEO “to drive adoption of the platform across more traditional channels,” the company said in a statement.

Dykes, who joined NebuAd in March 2007, remains company chairman.

The NebuAd advertising system uses data provided by Internet-service providers to anonymously track which Web sites consumers visit and then serves up targeted ads based on that activity.

Last month, 32 service providers and Internet companies responded to a request by the House Energy and Commerce Committee to disclose whether they monitor customer behavior for the purposes of delivering targeted ads.

One cable operator, WideOpenWest, acknowledged that it tested NebuAd’s ad platform with some of its 330,000 high-speed Internet customers from March until early July but pulled the plug after consumer-privacy issues were raised, including by the committee. Two other ISPs, Knology and CenturyTel, said they used the NebuAd system but had since stopped.

Charter Communications had scrapped plans to test NebuAd in four markets after critics — including Rep. Edward Markey (D-Mass.), Rep. Joe Barton (R-Texas) and Connecticut Attorney General Richard Blumenthal — complained about the privacy and legal implications of the technology.

NebuAd said it plans to broaden its targeted-advertising system to conventional media channels, including TV, following the “initial go-to-market approach focused on the Internet-service provider channel,” spokeswoman Janet McGraw said in an e-mail.

Before joining NebuAd, Dykes served as CFO for Juniper Networks, Flextronics International’s systems group and security software vendor Symantec.

NebuAd, based in Redwood City, Calif., has raised more than $30 million in venture-capital funding from Menlo Ventures and Sierra Ventures.

Ted Hearn contributed to this article.

September