Microsoft Targets Google Ad Revenues with New IE Version

(MoneyWatch)  Microsoft is moving ahead with version 8 of Internet Explorer, but the browser has picked up some interesting privacy features. But aside from privacy concerns, an additional consequence would be to make targeted advertising harder to achieve, which means pressure on Google, a noted Microsoft rival.

The two major ones are called InPrivate Browsing and InPrivate Blocking. The former eliminates browser history, cookies, cached files, and other ordinarily stored information when a browsing session is over.

A variety of implausible usage scenarios are described by Microsoft: looking at banking websites on shared computers or doing Internet shopping to buy gifts without the recipient finding out. The most likely situation, however, is the obvious one. Nudge nudge, wink wink, say no more.

Apparently some have dubbed this feature "porn mode." I don't think it's that simple, however. Last year, Google acquired GreenBorder, which created a virtual machine in which a browser could safely run, isolating any malware or security breaches. Users would sign up for an annual subscription.

Some have speculated that it was the first step toward a security product, but generally when Google has acquired products and services, it has left them available to customers. In this case, the company has announced no plans, and if you go to the GreenBorder site, all it says is that it will support existing customers through the end of their current subscriptions. Is there a reason that Google might not want such a service easily available? Sure, it could mess about with tracking user activities over time, reducing the power of targeted online advertising and the rates it could command.

More to that point is InPrivate Browsing:

If IE8 detects that the same off-site resource has been used by more than ten sites (so, ten different sites each using a javascript from google-analytics.com, for instance) then the script is treated as a tracking device, and future attempts to access the resource are blocked. Although this will not completely block information disclosure--the tracking site will be able to monitor your behavior until the block is triggered--it will prevent the monitoring of users across dozens or even hundreds of disparate sites.

Talk about taking the wind out of the behavioral marketing sales. When you're as behind in a competitive field as Microsoft is behind Google, but you don't depend on the income from it, you have a couple of choices. One is to try to acquire other companies (like Yahoo) to gain size and catch up. But another approach is to fundamentally damage the competitor's economic security at little to no risk. That's hard to pull off, but in this case, Microsoft has the lion's share of the browser market, which is the very thing that Google currently requires to deliver ads and generate revenue. And for the people who don't use IE, Mozilla is looking into similar features for FireFox, and Apple's Safari has privacy features. Should the industry complain, Microsoft can always point to Congress and its push for greater consumer privacy. Whatever you think of the motivation, it could turn out to be a pretty slick business move.