Microsoft Signs Definitive Agreement To Acquire Privacy Technology Leader Firefly Network

Microsoft Signs Definitive Agreement To Acquire Privacy Technology Leader Firefly Network

REDMOND, Wash., April 9, 1998 — Microsoft Corp. today announced it has signed a definitive agreement to acquire Firefly Network Inc., a leading provider of technology that makes possible the trusted exchange of private information on the Internet. Microsoft anticipates that the acquisition will benefit consumers worldwide by enhancing the company’s ability to deliver more privacy-rich products and services on the Internet.

The anticipated acquisition will accelerate Microsoft’s ability to implement products and services that meet the Platform for Privacy Preferences (P3P) privacy protocols being agreed to by the World Wide Web Consortium (W3C). Through its support of the P3P standards, Microsoft hopes to increase consumer acceptance of the Internet by deploying privacy technology that puts users in control of their personal information.

A broad range of companies have been involved with P3P efforts, including MCI Communications, AT & T Corp., IBM Corp., Netscape Communications Corp., Oracle Systems Corp. and Microsoft.

Firefly was one of the first companies to develop privacy practices and technology that give individuals control over what personal information, such as name, address, age, interests and credit card data, is provided to any given Web site. Firefly has played a significant role in driving industry privacy standards, including the P3P and the Information and Content Exchange (ICE) protocol, which enables the trusted exchange of information and content on the Internet.

“Privacy is not a product differentiator; it is a fundamental right for Internet consumers,” said Bob Herbold, executive vice president and chief operating officer at Microsoft. “Microsoft is committed to supporting the industry standards that put people in control of their personal information. With the acquisition of Firefly, we’ll be able to deliver to consumers support for these privacy standards more quickly.”

“I think it’s terrific that Microsoft is investing in the business of giving users control over their own data,” said Esther Dyson, chairwoman of EDventure Holdings Inc., author of “Release 2.0: A Design for Living in the Digital Age” and a small shareholder in Firefly. “Microsoft’s involvement should help spur awareness of and demand for customers’ own ability to control the terms on which they do business – among the users and the merchants who sell to them. Finally, control of users’ privacy can be a marketing issue as well as a political and moral one.”

“This transaction represents a milestone for the individual, the industry and the growth of Internet commerce by placing people in control of their personal information,” said Nick Grouf, Firefly’s president and chief executive officer. “This will provide consumers with the assurances they need to make the Web a part of their everyday life. We’re excited by the opportunity to utilize Microsoft’s significant resources to help us realize the broad consumer base that would have otherwise required many years for us to achieve alone.”

“Firefly has enormously talented people who have focused on privacy technologies and developed a reputation for putting people first,” said Pete Higgins, group vice president of the interactive media group at Microsoft. “We’re looking forward to having them join our team and help us accelerate the implementation of privacy technologies across our product line. We will remain committed to supporting the development of open industry standards that give people more control over how their personal information is used.”

Microsoft looks forward to participating in upcoming federal meetings focused on online privacy and will pursue other opportunities to facilitate industry dialogue on privacy technology.

Comments From the Industry and Firefly Customers


“Firefly’s acquisition by Microsoft is a major step in addressing the online privacy concerns of both consumers and government,” said Susan Scott, executive director of TRUSTe, a nonprofit privacy program. “We also applaud and encourage Microsoft’s support of open industry standards. TRUSTe looks forward to working closely with Microsoft and other innovative companies that have made privacy a core issue in their Internet strategy.”

Coopers & Lybrand New Media Group

“The alliance of Firefly’s leadership in privacy and Microsoft’s intention to accelerate the rollout of privacy-based products and services on the Internet will help build trust and confidence in electronic commerce and will significantly contribute to its growth,” said Russ Sapienza, a partner in Coopers & Lybrand L.L.P.’s new media group. “Firefly’s action of demonstrating publicly that it practiced what it preached is a fundamental guideline that should be adopted by other online ventures.”

Barnes & Noble

“We view this announcement as great news for e-commerce and for the rights of consumers, given Microsoft’s industry leadership and the wealth of Firefly’s privacy technologies,” said Steve Riggio, vice chairman of Barnes & Noble Inc. “Having worked with both companies independently, we see this union as developing greater synergy between Microsoft’s operating platform and Firefly’s core technology and privacy practices, thus better serving the rights of consumer privacy.”

Merrill Lynch

“Merrill Lynch’s investment interest in Firefly in 1995 was its ability to create highly personalized yet private experiences online,” said Frank Zammataro, director of client technologies at Merrill Lynch Company Inc. “The acquisition of Firefly by Microsoft will support the standardization and adoption of highly private Internet sessions, which is critically important to our Merrill Lynch OnLine activities.”


“Firefly’s steadfast commitment to preserving consumer privacy has earned them a leadership position on the Web,” said Lenny Barshack, chief executive officer and founder of Bigfoot Partners L.P. “Bigfoot is working with Firefly to enhance online users’ ability to manage their personal information. Tools to control user privacy are crucial to the growth of the Internet; the combination of Microsoft and Firefly will help extend their use.”


“Firefly’s expertise in personalization with privacy has allowed Launch to pioneer a new way to deliver an engaging experience for music lovers on my Launch,” said Dave Goldberg, chief executive officer of Launch Media Inc. “With this acquisition, we are looking forward to seeing these opportunities grow and develop as more and more people embrace a personalized Web.”


“As the pre-eminent technology media company, Ziff Davis has worked closely with Firefly to work with leading-edge solutions for personalization and privacy,” said Daniel Rosensweig, president of ZDNet. “We’re excited about the potential of the acquisition to bring these services to a wider and more personalized Web.”


“For our part, Yahoo! has always been committed to the protection of our users’ privacy and has taken efforts to inform people of our technologies, practices and the purposes of those practices. This includes seeking permission when collecting personal information,” said Wendy Yanowitch, vice president, Yahoo! member services and business operations. “Yahoo!’s policy on privacy is available through a link on our home page. As we move forward, Yahoo! will continue to improve the user experience and deliver increasingly relevant programming and advertisements to our users while providing the assurance of privacy protection. We are in active discussions with a number of industry organizations and continue to watch with great interest as the industry advances toward standards for such an important issue.”

Microsoft and Firefly, a privately held company based in Cambridge, Mass., did not disclose terms of the acquisition. The company will relocate its Cambridge offices to Redmond, Wash., and its employees will report into the Web essentials group, part of Microsoft’s interactive media group.

About Firefly

Firefly is a leader in privacy practices and technologies that place people in control of their personal information on the Internet. Firefly was the first company to post a privacy policy, which provides explicit information to users regarding what information is required on the site

and an explanation of how the information will and will not be used. In addition, Firefly was the first business to hire a third-party auditing firm – Coopers & Lybrand L.L.P. – to conduct reviews of its working policies and activities to verify its actions were consistent with its privacy policies.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft is either a registered trademark or trademark of Microsoft Corp. in the United States and/or other countries.

Other product and company names herein may be trademarks of their respective owners.

Note to editors : If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages.

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