FC: Zero Knowledge, after poor software sales, tries new gambit

[Declan McCullagh <declan () well com>]

http://www.wired.com/news/business/0,1367,39895,00.html

   Privacy Firm Tries New Gambit
   by Declan McCullagh (declan () wired com)
   2:00 a.m. Nov. 1, 2000 PST

   WASHINGTON -- Zero Knowledge Systems seems to have finally realized a
   harsh truth: Internet users don't like to pay extra to protect their
   privacy.

   The Montreal-based firm won acclaim for its sophisticated
   identity-cloaking techniques, but very few people appear to have paid
   the $49.95 a year to shield their online activities from prying eyes.

   That's not exactly a heartening prospect for a company with 250
   employees to pay and $37 million in venture capital funds to justify
   -- especially when already high-strung investors have become nervous
   about Internet companies that have never made a profit.

   Zero Knowledge's solution: A kind of privacy consulting service it
   announced on Tuesday. Through it, the company hopes to capitalize on
   the growing privacy concerns of both consumers and businesses -- and,
   most importantly, finally enjoy some revenues.

   "This is a new focus for Zero Knowledge: helping businesses build in
   privacy technologies in how they deal with customer data flow," Austin
   Hill, co-founder and chief executive, said in a telephone interview.

   "As customer expectations have increased with privacy, and how
   governments have started to regulate some privacy standards ... all of
   a sudden, companies are having to think, 'Hold on, how do I build in
   privacy?'" Hill said.

   Hill and his staff of technologists -- including veterans like
   cryptologists Stefan Brands and Ian Goldberg -- aren't alone in eyeing
   the privacy-consulting business as a lucrative one.

   Many of the established consulting businesses such as
   PricewaterhouseCoopers and Ernst and Young offer privacy services. IBM
   launched such a business in 1998, and an Andersen Consulting
   representative says that privacy awareness is "a component of almost
   anything we do."

   [...]




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