Nameless Identity

Wired Commentary: Online Advertising: So Good, Yet So Bad for Us

While many websites do not collect names, addresses, Social Security numbers or other "personally identifiable information," or PII, the information they do collect is extremely revealing. "They don't need to know your name to know who you are," Chester said.

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Carnegie Mellon Professor Latanya Sweeney has demonstrated that one can identify 87 percent of the U.S. population from zip code, birth date and gender alone.

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Other than the privacy issues, some obvious risks are price discrimination, segmented markets and creating an ability for advertisers to exercise improper influence over consumers.

Economists tend to like price discrimination, because it allows wealthier purchasers to subsidize sales to poor customers, while maximizing profits.

Consumers hate knowing that the person sitting next to them on the airplane paid hundreds of dollars less because they booked a day earlier.

Purchasers might actually rebel if the reason they paid more for the same service was because the seller thought they had more disposable income than their seatmate. Perhaps for this reason alone, I think widespread price discrimination is unlikely.

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Personalization, including targeted ads, is a mixed blessing: on one hand, personalized information is more useful and relevant to our lives.

On the other, it reduces the opportunities for unanticipated encounters with ideas, people or products that may disturb or enlighten us.

Personalization also interferes with the development of common experiences that people can use to understand each other and make common decisions.