Joanne Bradford (Photo: Robert Sorbo/Microsoft, via Reuters)

A year ago, Yahoo pushed aside Wenda Harris Millard as its ad sales chief in favor of David Karnstedt. Ms. Millard was widely admired as the dean of the Internet ad sales world and the person who in many ways led the industry out of the dark days of 2002. Mr. Karnstedt was a veteran of the search advertising business who joined Yahoo when it bought Overture Services, the text ad company.

The switch was seen as the ascendency of the automated method of selling ads over the time-honored tradition of face-to-face persuasion.

Now the pendulum is swinging back toward the three-hour lunch. Yahoo said this morning that it had hired Joanne Bradford to replace Mr. Karnstedt as the head of advertising sales. Ms. Bradford for many years was the Wenda Millard of Microsoft, selling ads for MSN. Later, she ran the MSN portal, but she left in March to run sales for SpotRunner, a company that helps small businesses advertise on television.

It’s not clear yet what the reasons for all this are. Yahoo said that Mr. Karnstedt resigned over the summer, although this wasn’t announced until today. Maybe since the company is going to use Google to sell a lot of its search terms, display-ad sales are back on the front burner.

Ms. Bradford will have the title of senior vice president for U.S. revenue and market development. In addition to both search and display ad sales, she will oversee several areas Mr. Karnstedt did not, including small business services and Yahoo’s HotJobs employment listing site. She will report to Hilary Schneider, the Yahoo executive vice president for the United States.

Even though Congress has growled loudly enough to get Internet service providers to back off their plans to sell information about their customers’ Web surfing to advertising companies, one prominent legal expert argues that the law governing the issue should still be made tougher.

The issue was examined in a new paper, “The Rise and Fall of Invasive ISP Surveillance”, by Paul Ohm, a former Justice Department official who now is a professor of law at the University of Colorado.

Mr. Ohm argues that the prospect of Internet service providers using new technology to monitor what their customers do online is a grave threat to privacy.

For now, Internet providers in the United States have put on hold plans to sell customer surfing information to ad companies. Several congressional committees held hearings on the topic, providing a forum for a number of senators and House members to indicate their displeasure at the concept. Read more…

Advertisers had been grumbling about the proposed Google-Yahoo search deal since it was announced, and that grumbling just got a little louder. On Sunday, the Association of National Advertisers, a giant trade group, said it objected to the deal.

The A.N.A. said it had sent a letter to the Department of Justice outlining its complaints. It “states A.N.A.’s concerns that the partnership will likely diminish competition, increase concentration of market power, limit choices currently available and potentially raise prices to advertisers for high quality, affordable search advertising,†according to the group. The A.N.A. represents about 400 companies with 9,000 brands.

Advertisers are concerned that with Yahoo offloading searches to Google, Google will control almost all of the search market prices will go up. Microsoft, which wanted Yahoo for its own, is another vocal critic of the deal. Microsoft arguments, like the advertisers, is focusing on the potential for monopoly.

Google, though, has said it is still planning for the agreement to begin in October and that it does not know where it stands with regulators. “We are in the process of talking to the government,†Google chief executive Eric Schmidt told Bloomberg Television. “They’ve not indicated one way or the other how they’re dealing with us.â€

Every now and then a bit of technology wanders onto my computer screen that makes me want to pull someone over and say, “Isn’t it amazing that you can do this?” Flying around on Google Earth was like that. And so is the new face recognition system on Google’s photo sharing site, Picasa Web Albums. (Microsoft’s PhotoSynth system, which creates 3D spaces from a stack of digital snapshots, also had a jaw-dropping demo, but its first release is too hard to use.)

As I was dutifully uploading my summer vacation photos last night, the Picasa site alerted me to this new feature, which was introduced Tuesday and lost in the noise about Google’s Chrome browser. I clicked a button that set some Google server farm looking closely at my stored photos (mainly of my two constantly preening daughters).

Just a few minutes later, it presented a cluster of photos of what the software assumed were of the same person. Indeed, they were all of my six-year-old, Daphne. I typed in her name. Then it presented another batch it thought were of Daphne. I could click to confirm. I could also uncheck some photos that were not her. It similarly offered clusters of photos of my other daughter, Clare, as well as my wife and other people who I tend to photograph. Read more…

With its new Chrome Web browser, Google is not being quite as magnanimous to competitors as it lets on.

The company has insisted that it is not putting the thumb on the scale to favor its own services over those of rivals. And indeed Chrome exhibits better manners than Microsoft’s Internet Explorer often has. When you install it, it lets you pick any search engine you want as the default. And in the unlikely event you have set some other search engine as your favorite in another browser, such as Firefox or Internet Explorer, it will offer to keep that choice in Chrome.

Chrome doesn’t even try to become your default browser, at least for now.

But Chrome’s sparse interface doesn’t allow users to install add-in toolbars. That may not sound like a big deal, but it is. Toolbars represent 12 percent of all search queries, according to comScore. Read more…

Advertisers said on Tuesday that Google Chrome could potentially provide swaths of data about consumers — but that if its privacy mode proves popular, it could be a giant roadblock for them.

Chrome would offer “potentially amazing access to information about your consumer,†said Jordan Berkowitz, a senior producer at Undercurrent, a New York firm that advises companies on Web strategies.

Google is known for its rich data, and it could collect a lot more of it through a browser, Mr. Berkowitz said. And although consumers tend to be sensitive about privacy, because Google offers interesting products to consumers for free, Mr. Berkowitz said, “I think that buys them some latitude that places like Microsoft don’t get, especially when it comes to things like anonymous reporting as relates to advertising.â€

It appears that Google is going to take advantage of the data that it will collect. When the download of Chrome became available on Tuesday, the terms of service indicated as much: “Some of the Services are supported by advertising revenue and may display advertisements and promotions,†parts of the terms of service agreement read. “These advertisements may be targeted to the content of information stored on the Services, queries made through the Services or other information.â€

“In consideration for Google granting you access to and use of the Services, you agree that Google may place such advertising on the Services,†it read. Read more…

UPDATE Comment from Google has been added.

AT&T is “carefully considering” monitoring the Web-surfing activities of customers who use its Internet service, the company said in a letter in response to an inquiry from the House Committee on Energy and Commerce.

While the company said it hadn’t tested such a system for monitoring display advertising viewing habits or committed to a particular technology, it expressed much more interest in the approach than the other big Internet providers who also responded to the committee’s letter.

AT&T did however promise that if it does decide to start tracking its customers online, it will “do so the right way.” In particular, the advertising system will require customers to affirmatively agree to have their surfing monitored. This sort of “opt-in” approach is preferred by privacy experts to the “opt-out” method, practiced by most ad targeting companies today, which records the behavior of anyone who doesn’t explicitly ask to not to be tracked.

The Congressional committee began looking at advertising that targets ads based on the behavior of Internet users after reports emerged that several Internet service providers, including Charter Communications, were preparing to begin selling the chronicles of of their customers’ Web-surfing activities to a company called NebuAd. It sent letters to 33 companies asking about the targeting practices. (All of the responses the committee has received so far are here.)

Read more…

UPDATED

In an interview with The Wall Street Journal, Steven P. Jobs repeated Apple’s longstanding assertion that it doesn’t expect to make much money from the iTunes store. In this case, he was talking about Apple’s new business of selling applications for the iPhone, which he said sold $30 million worth of little programs in the first month. A total of 60 million programs have been downloaded, most of them free, he added.

Mr. Jobs suggested that since Apple only keeps 30 percent of each program’s sales price, passing the other 70 percent to the publisher, the business doesn’t have much direct profit. Rather, he said, the point is to make Apple’s hardware more attractive.

“Phone differentiation used to be about radios and antennas and things like that,” Mr. Jobs said. “We think, going forward, the phone of the future will be differentiated by software,” Mr. Jobs told The Journal.

He’s right. The emergence of creative and useful software is putting the iPhone in a completely different class than any other cellphone. Laura Holson reported in The New York Times last week how applications are loosening the grip of the network carriers.

But he downplays how good a business the iTunes store is.

Here’s what the iTunes store has: margins that are better than the best e-commerce companies around; no marketing costs and a built in audience; Sales of nearly $3 billion a year in its existing business; and a new $1 billion business on the way.

Read more…

Yahoo announced Friday that it would allow users to turn off the customization of advertising on the pages of Yahoo.com. The opt-out option should be available at the end of August, through Yahoo’s privacy center, the company said.

Yahoo already allows users to opt out of customized ads that it serves on other companies’ pages. This tweak would stop the company from serving ads based on a user’s behavior on Yahoo’s own pages.

The company made the announcement as part of a response to a letter about privacy that was sent last week by four House members. The top congressmen at the House Committee on Energy and Commerce sent letters to 33 Internet and telecommunications companies, including Yahoo, Microsoft, Google and AOL, asking them to detail their privacy policies. The committee asked for responses by Friday.

Yahoo’s response to the House letter (below the news release, here) was somewhat predictable, but provided some interesting details about its behavioral targeting. It is experimenting with links on targeted ads that say things like “what is this†or “about this ad.†These take users to a page that explains the targeting. Opting out is not very common: in July, 75,000 users visited the opt-out page within Yahoo’s privacy pages (Yahoo said it could not estimate the total number of users who had opted out). And Yahoo said it has an internal group, the Ad Council, that reviews requests from advertisers to determine whether the topics they want to target are too sensitive — for example, if they include certain medical terms.

I’ll be writing more about the Congressional interest in online advertising for Monday’s paper.

Google said Wednesday that it had found a willing buyer for its Performics search-marketing unit: Publicis Groupe, the giant French advertising holding company.

Performics had been owned by DoubleClick, and ever since Google’s acquisition of that company closed, Google has been expected to unload Performics. The conflict of interest is pretty clear, given that Performics advises clients on how to maximize their visibility on Google.

Google itself said as much back in April.

Publicis, meanwhile, has been trying to strengthen its digital offerings. The company, which owns ad agencies including Leo Burnett and Saatchi & Saatchi — and thus handles work for clients like Visa and General Motors — recently reorganized. This was meant to help its four media-buying agencies offer clients more scale for digital ad placements, to allow the company to begin work on ad-exchange strategies, and to help it train its staff better in digital technologies.

Terms of the deal were not disclosed; it is expected to close in the third quarter.

UPDATE: Added comment from Glam

The fight among women-oriented Web sites will be heating up with a new directive from comScore Media Metrix that could knock Glam Media from the top spot in the women’s category.

ComScore, which advertisers depend on to determine Web sites’ traffic, has told Glam and other women’s networks that as of August they cannot count sites in their networks that are not solely for women. If they continue to do so, comScore will no longer include the network in the women’s category.

Glam has had the most unique visitors of any Web network for women, by comScore’s measurement, since June 2007, when it ousted NBC Universal’s iVillage from the top spot. IVillage had held the spot for nine years. Using comScore’s current method of tallying viewers, Glam had 41 million unique visitors in June, more than double AOL Living in the number-two spot with 16.1 million and iVillage with 15.9 million.

Since Glam went live in September 2005, there has been controversy over where it gets its viewers and whether these numbers are accurate. It does not own 97 percent of the 650 Web sites in its network, but it counts their viewers as its own and sells ads for all the sites. That has had rival women’s Web sites arguing that Glam is an ad network, not a content producer, and that it shouldn’t be included in comScore’s women’s category.

Read more…

Is New York State changing its mind about requiring online stores to collect sales tax on purchases made by state residents?

The last state budget included a novel legal interpretation that requires out-of-state online retailers to collect sales tax if they have any affiliates — including Web sites that send them business — with a physical presence in New York. The provision, which has been called the “Amazon Tax” because Amazon.com is by far the largest merchant to which it applies, became effective June 1.

On June 24, it turns out, the state Senate voted to repeal the tax collection rule. This was noticed by a publication of the National Retail Federation and a few marketing blogs.

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UPDATED 7/26/08 with name of third investor

Verve Wireless’s mission is to save the local paper by making it mobile. It provides publishers with the technology to create mobile Web sites, so readers can read the paper on their cell phones. Verve or the newspaper then sell ads on those sites. Verve already powers mobile versions of 4,000 newspapers from 140 publishers, including The Associated Press, McClatchy, and the New York Times Regional Media Group.

The A.P. started using its Verve-powered Mobile News Network in May. It apparently liked it enough to invest in the company. Verve Wireless has raised $3 million in its second round of fund-raising, led by its biggest customer, The Associated Press. Iron Capital and Crosscut Ventures also participated in the round.

Since May, 728 A.P. member newspapers have joined the network. Its iPhone application, which delivers daily headlines and photos and lets users watch slideshows or videos and text or e-mail stories to friends, took the runner-up spot in the Apple Design Award competition. The investment in Verve is rare for the news organization.

Verve’s chief executive, Art Howe, is the first to admit that he’s betting on an industry that’s under siege. Newspapers’ strength is providing local news and information and the mobile Web is the logical outlet for local content, argues Mr. Howe, who is a former Pulitzer Prize-winning reporter at The Philadelphia Inquirer and is himself owner of 50 local papers. “Mobile is actually a better way to reach people than print or even Web. It’s versatile, immediate, travels and is just as compelling — if it’s done right — as a Web site or a printed page.” Read more…

UPDATED 7/23/08 5:58 p.m.

A screen shot of the Sugar Network’s TeamSugar Web site

NBC Universal has lost one of its women’s blog channels, the Sugar Network, a week after it added female blog network BlogHer to its ranks.

NBC had been selling ads across the 17 Sugar blogs, which cover celebrity gossip, fashion, cooking and more, since June 2007, when it led a $10 million investment round in Sugar Inc. Lauren Zalaznick, president of NBC Universal Women and Lifestyle Entertainment Networks, will stay on the board, but Sugar will take over its own advertising from NBC.

“We’ve grown so much that it seemed silly to have a big piece of revenue flow through NBC,” says Sugar’s chief executive and publisher Brian Sugar. NBC took a 50 percent cut of ad revenue. Last year that cost Sugar about the same as employing an ad sales team, he says, but the Sugar blogs have been growing faster than he expected and the equation changed. The Sugar Network had 4.6 million unique visitors worldwide in June, up 121 percent from 2.1 million a year ago, according to comScore. “It’s about margins and the only way we’re going to make money is if we sell our own ads,” says Mr. Sugar. “We’re all grown up now.” Read more…

The Senate Commerce Committee began Wednesday to look at how online companies collect and use data about Internet users for advertising, and was told by several big Internet companies that it needs to pass a new law to enforce privacy standards for a range of online and offline activites.

Privacy lawyers working for both Google and Yahoo both endorsed the idea of some kind of legislation. So did — predictably — Leslie Harris, the chief executive of the Center for Democracy and Technology, an activist group.

“Google supports the passage of a comprehensive privacy law that would establish a uniform framework for privacy and procedures to punish bad actors,” said Jane Horvath, a senior privacy counsel for Google. Mike Hintze, an associate general counsel of Microsoft, said much the same thing.

On the other side was the Federal Trade Commission. Lydia Parnes, the director of the commission’s bureau of consumer protection, said legislation is not needed and she defended the agency’s proposal late last year to bolster the industry’s self-regulation of advertising practices. That proposal suggests that one or more self-regulatory groups could define standards for disclosure of advertising practices, the consent users must give and the steps that companies that collect personal data must use to protect it from theft and accidental disclosure.

Read more…