AOL Cookies, Web Bugs to Track Advertising

America Online, the nation’s largest Internet service provider, plans to begin using anonymous Web bugs and cookies for the first time to enable the company to better target advertisements to its members.

The change was disclosed in a recent revision to AOL’s privacy policy, posted on the proprietary online service.

Web bugs are invisible files hidden on Web pages to help marketers determine who has seen their ads. Cookies are tiny text files placed on an Internet user’s computer that can be used to store information such as passwords, preferences or Web-surfing habits.

In the past, AOL officials boasted that their practice of not using Web bugs and cookies for marketing purposes demonstrated the company’s higher commitment to protecting the privacy of its 30 million members.

An AOL spokesman downplayed the change and stressed that the Web bugs and cookies would not be used to track members’ Web-surfing habits and would not be linked to any personally identifiable information about members, unless members voluntarily provided such information.

“This is really not a substantive change and it’s consistent with what every other company is already doing,” said Andrew Weinstein, a company spokesman. He said AOL is not yet using Web bugs or cookies for marketing, but plans to in the future, although he did not say when. The company already uses cookies for nonmarketing purposes, such as helping members personalize the service to receive local weather reports or horoscopes.

AOL said it will use cookies and Web bugs only to help keep track of which advertisements its members have seen and who has responded to them. For example, cookies may be used to help ensure that members don’t see the same advertisement too many times, to show the next advertisement in a series, or to determine whether a member responded to a particular ad, according to the new privacy policy.

“They’re really just using it as a counting device, which isn’t really that bad,” said Richard Smith, chief technology officer at Privacy Foundation, a privacy watchdog group. He said he was encouraged that the company reaffirmed its policy against tracking users’ Web-surfing habits or creating profiles about them.