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

Declan McCullagh declan at well.com
Wed Nov 1 08:41:11 PST 2000



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

    Privacy Firm Tries New Gambit
    by Declan McCullagh (declan at 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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