Byron: said the government should seek to influence social networking sites into drawing up codes of practice. Photograph: Eamonn McCabe

Social networking websites should be encouraged to adopt voluntary codes of practice to help protect young users, according to the government review of child internet safety conducted by Dr Tanya Byron.

Byron said in the report that despite the concerns about the volume and diversity of online content, the majority of material is hosted by a handful of very popular sites, such as Facebook, MySpace, Bebo and YouTube.

She added that a realistic goal for the government is to concentrate on reducing the availability of inappropriate or harmful content by influencing those sites.

“The incentive for signing up to one of these codes would be the opportunity for companies to promote themselves as responsible businesses with an interest in child safety,” said Byron in the review.

“It would be against the interest of children if codes were so prescriptive that they stifled innovation and meant companies based their safety measures on compliance with a lowest common denominator … so an effective code would include a set of safety principles on which companies could base their approach.”

An example of how a code could work in practice is with the privacy policy on social networking sites, which might agree on a higher default setting for users under 18.

One site might meet the code by only allowing invited friends to access young users’ profiles, while another might allow users with shared interests to connect but with clear guidance on how to limit the information they give to strangers.

Microsoft has announced collaborations that will see Windows Live more tightly integrated with the world’s top five social networking sites.

The software giant is working with Facebook, Bebo, Hi5, LinkedIn and Tagged to exchange a set of APIs which allow users to easily and securely move their contacts and relationships between services.

“Social networks are becoming a fundamental way in which we communicate, and we are happy to be a part of that,” said a spokesman for Microsoft.

“These partnerships will enhance our users’ online experiences and the way in which they choose to communicate with their friends and families.”

Users will be able to invite their Windows Live Contacts to join them on the social networking services without the need for screen-scraping, or providing private user credentials to outside networks.

“We continue to explore ways to open up Facebook in safe and secure ways that benefit our users and we are working with Microsoft, a trusted partner, to test a new data portability initiative,” said a spokeswoman for Facebook.

“Facebook will continue to work with other trusted partners to explore new initiatives around data portability.”

As part of this collaboration, Microsoft is introducing a new Windows Live Messenger website where users can invite contacts from any of the five social networks to join them.

The service is live today on Facebook and Bebo, and will become live on Hi5, LinkedIn and Tagged in the coming months.

A famous New Yorker cartoon from 1993 showed two dogs at a computer, with one saying to the other, “On the Internet, nobody knows you’re a dog.”

That may no longer be true.

A new analysis of online consumer data shows that large Web companies are learning more than ever before the gritty details of what people search for and do on the Internet, gathering clues about the tastes and preferences of a typical user several hundred times a month.

These companies use that information to predict what content and advertisers people most likely want to see. They can charge steep prices for carefully tailored ads because of their high response rates.

The analysis, conducted for The New York Times by the research firm comScore, provides what advertising executives say is the first broad estimate of the amount of consumer data transmitted to Internet companies every day.

The analysis indicates that Web companies are, in effect, taking the trail of crumbs people leave behind as they move around the Internet and analyzing them to anticipate people’s next steps. So anybody who searches for information on such disparate topics as iron supplements, airline tickets, hotels and soft drinks may see ads for those products and services later on.

Consumers have not complained to any great extent about data collection online. But privacy experts say that is because the collection is invisible to them.

“When you start to get into the details, it’s scarier than you might suspect,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, a privacy-rights group. “We’re recording preferences, hopes, worries and fears.”

But executives from the largest Web companies say that privacy fears are misplaced, and that they have policies in place to protect consumers’ names and other personal information from advertisers. Moreover, they say, the data is a boon to consumers, because it makes the ads they see more relevant.

Detail producing payoffs

The rich troves of data at the fingertips of the biggest Internet companies also are creating a new kind of digital divide within the industry. Traditional media companies, which collect far less data about visitors to their sites, are increasingly at a disadvantage when they compete for ad dollars.

The major television networks and magazine and newspaper companies “aren’t even in the same league,” said Linda Abraham, an executive vice president at comScore.

During the Internet’s short life, most people have used a yardstick from traditional media to measure success: audience size. Like magazines and newspapers, Web sites most often are ranked based on how many people visit them and how long they are there.

But on the Internet, advertisers increasingly are choosing where to place their ads based on how much sites know about Web surfers. ComScore’s analysis is a novel attempt to estimate how many times major Web companies can collect data about their users in a given month.

Web firms once could monitor the actions of consumers only on their own sites. But over the last couple of years, the Internet giants have spread their reach by acting as intermediaries that place ads on thousands of Web sites, and now can follow people’s activities on far more sites.

Large Web companies like Microsoft and Yahoo have also acquired a number of companies in the last year that have rich consumer data.

“So many of the deals are really about data,” said David Verklin, chief executive of Carat Americas, an ad agency in the Aegis Group that decides where to place ads for clients.

“Everyone feels that if we can get more data, we could put ads in front of people who are interested in them,” he said. “That’s the whole idea here: Put dog-food ads in front of people who have dogs.”

Some advertising executives say media companies eventually will have little choice but to outsource most if not all of their ad sales to companies like Microsoft and Yahoo to benefit from their data.

Billions of “events”

ComScore analyzed 15 major media companies’ potential to collect online data in December. The analysis captured how many searches, display ads, videos and page views occurred on those sites and in their ad networks.

These actions represented “data transmission events” — times when consumer data was zapped back to the Web companies’ servers. Five large Web operations — Yahoo, Google, Microsoft, AOL and MySpace — record at least 336 billion transmission events in a month, not counting their ad networks.

The methodology was worked out with comScore and based on the advice of senior online advertising executives at two of the largest Internet companies.

Yahoo came out with the most data-collection points in a month on its own sites — about 110 billion collections, or 811 for the average user. In addition, Yahoo has 1,709 other opportunities to collect data about the average person on partner sites like eBay, where Yahoo sells the ads.

MySpace, owned by News Corp., and AOL, a unit of Time Warner, were not far behind.

Google also has scores of data-collection events, but the company says it is unique in that it mostly uses only current information rather than past actions to select ads.

The depth of Yahoo’s database helps explain why AOL is talking with Yahoo about a merger and Microsoft is willing to pay more than $41 billion to acquire the company.

The comScore figures do not include the data that consumers offer voluntarily when registering for sites or e-mail services. When consumers do so, they often give sites permission to link some of their interests or searches to their user name.

The figures also do not account for information people enter on social-network pages.

Informing consumers

Executives from Web companies said they have been working to inform consumers on their data practices.

These companies also noted that they have consumer-protection policies. AOL, for example, lets users opt out of some ad targeting, Google lets users edit the search histories linked to their user names, Yahoo is working on a policy to obscure people’s computer-identification addresses that are linked to search results, and Microsoft says it does not link any of its visitors’ behavior to their user names, even if those people are registered.

But for all these precautions, the Web giants may be treading into areas that would make their users uncomfortable — if those users knew the extent of the data collection.

A study of California adults last year found that 85 percent thought sites should not be allowed to track their behavior around the Web to show them ads, according to the Samuelson Law, Technology & Public Policy Clinic at the University of California, Berkeley, which conducted the study.

“If you said to people, ‘Hey, do you realize that information was not just ephemeral, it ended up potentially tied to your name?’ ” said Deidre Mulligan, director of the Samuelson clinic. “A lot of people would say, ‘Wow, I guess I hadn’t really realized that.’ “

Social networking site Facebook has approached major music labels about launching a music service, the Financial Times reported on Wednesday, citing people familiar with the matter. The talks were described as “preliminary” and come after sources familiar with the discussion told Reuters last week that the major labels had held similar talks with MySpace, the leading social network site owned by News Corp

LinkedIn came up with a fresh new homepage this week, and with a fresh new member, as Bill Gates gave up his Facebook account and joined the 19 million LinkedIn users in an unusual manner, by posing a question on his new favorite community site, asking for suggestions to encourage young people to pursue careers in science and technology.

What’s the connection between LinkedIn’s latest features and Gates’ “divorce” from Facebook? Obviously, Facebook! While still trying to catch up with its rival, LinkeIn has been also working on making the “staying” more enjoyable for cyber-visitors, through a status feature similar to that of Facebook, and by turning Facebook’s most popular user into a new “acquisition”, as strange as that may sound.

LinkedIn is currently submitted to a makeover meant to re-boost the site’s positions compared to its rivals. A good way to start was to personalize the user interface with a series of modules that allow users to organize their information on the profile page and keep their friends updated with whatever they are up to.

Gates’ presence only made things better for LinkedIn, as his profile became the most searched profile on the site. This time however, the philanthropist won’t have to worry about getting suffocated with too many friend requests, as LinkedIn will block friend requests. After all, they wouldn’t want to lose their most popular user like Facebook, would they?

At the end of the day, LinkedIn is working on improving the time people spend on the site, which allowed Facebook to be one step ahead, at least until now. The task is a difficult one, considering the differences between the two rivals. LinkedIn has an average of 6 and a half minutes per visit, while Facebook has 21 minutes. If we think of it, Bill Gates’ new account could give them a little push, but the new design should have much more to do with a future success.