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." [...]