Google in plans to buy Acxiom data-mining firm [priv]

[Declan McCullagh <declan () well com>]

Just to be clear, the HHS RFID article was an April Fool's day joke. I 
certainly hope this one is as well! --Declan




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Google plans to buy data mining firm
Published: April 1 2004 12:33 | Last Updated: April 1 2004 12:33

Google is in negotiations to purchase Acxiom Corporation, the massive
data warehousing company that has been embroiled in numerous privacy
scandals over the last few years.

Sources close to the talks said Thursday that the search engine company 
hoped to use Acxiom's databases, which feature information on nearly 
every American family, to optimize search results, share more 
information with law enforcement, and target advertisements with greater 
accuracy. Acxiom's expertise is intended to allow Google to make money 
from its new Gmail concept, which gives every user a gigabyte of free 
email space.

"This is a great way to leverage Acxiom's industry-leading collections
of personal information on Americans and deliver more value to all of
Google's customers and advertisers," a Google executive participating
in the talks said. While no details are final, one source said the
purchase could be around $1.8 billion, an affordable sticker price for
a company valued at over $15 billion in an expected initial public
offering.

Acxiom, based in Little Rock, Ark., sells police and corporate customers 
products including InfoBase, touted as the "largest collection of U.S. 
consumer" data, and Personicx, which tracks the "specific consumer 
behavior" of almost every American and can sort households into one of 
70 distinctive segments. Acxiom and JetBlue were involved in a scandal 
last year after providing personal information on Americans to the 
Transportation Security Administration, and documents obtained under the 
Freedom of Information Act show that Acxiom would have been a primary 
source for the Defense Department's short-lived Total Information 
Awareness project.

To offset the cost of providing up to 1 GB of email storage, Google 
plans to employ real-time customer data integration (CDI) to target 
offers based on the link between email content and information about 
each family in Acxiom's vast databases. "This is a truly innovative, 
unique solution that provides consumers with real value," said a source 
close to Acxiom Company Leader Charles Morgan. "Because we know their 
drugstore shopping habits, CDI can show them ads for condom, birth 
control pills, or day-after pills, whichever is most appropriate."

Google spokesman Nate Tyler declined to comment on the proposed
acquisition.

Lisa Dean, chief privacy officer for the Transportation Security
Administration, applauded the proposed deal, noting that the CDI
system would be designed to detect terrorist conversations in Gmail
and forward the relevant email correspondence to law enforcement.

Because Google sets what's known as a "cookie" that records all
searches ever done on a specific computer, it has accumulated a wealth
of data about hundreds of millions of Internet users. By linking that
CDI data with Acxiom's information about family income, shopping
habits, and bank account balances, Google expects itself to be in the
enviable, and profitable, position of being the largest personal
information repository on the planet.

Acxiom's shares increased 2.8 percent Thursday to $22.58 on word of the 
pending deal. In anticipation of the purchase, Acxiom on Wednesday cut 
230 jobs and upped its earnings estimate for the fourth quarter ending 
March 31.


Company sites:

http://gmail.google.com/

http://www.acxiom.com/



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