Microsoft to Buy Ads Only on Net Sites That Post Privacy Policy

Highlighting mounting concern about privacy in online shopping, Microsoft Corp. on Wednesday warned that it will yank its advertising from sites that fail to state their policy on consumer privacy.

In a speech at the PC Expo trade show in New York City, Robert Herbold, Microsoft’s chief operating officer, said that as of Jan. 1, 2000, Redmond, Wash.-based Microsoft, the No. 1 online advertiser, will buy advertising space only on Web sites that have posted comprehensive privacy policies.

The move comes amid widening public concern over the potential misuse of personal information gathered automatically from computer users as they surf the Web.

A comprehensive privacy statement would, among other things, inform customers that information is being collected, ask for their consent to provide such information and ensure security of the information, Herbold said.

IBM Corp., the No. 2 Web advertiser, set a similar plan in March.

“We’re in an inadequate state right now,” and poor privacy protection is a top barrier to the continued growth of electronic commerce, Herbold said in a keynote address Wednesday.

The exploding market for so-called e-commerce, the purchase and sale of goods and services over the Internet, is expected to double to $68 billion this year as the number of Web users continues to swell.

As part of its privacy initiative, Microsoft introduced a “privacy wizard,” a Web-based software program that helps Web sites craft statements that detail their position on privacy, thereby warning customers how their information will be used.