DION LIM SITS IN THE LIVING room of his posh apartment high above downtown San Francisco, comfy in black slippers and calmly talking about his new business while holding hands with his wife. They are a lawsuit waiting to happen.
Last month Lim and wife, Amy, both 32, released Bannerama, free software that wipes out banner ads on Web sites and replaces them with content of the user's choosing - tidbits on foreign languages and trivia and, eventually, wine, cooking and golf. "People already use the natural blocking software in their brains by ignoring banners," he says. "We want to give the user the power to do what he wants with that space."
Lim, who earlier cofounded the popular Epinions.com site that lets users sound off in product reviews, adds insult to injury.He plans to paste his own ads over one in every four banners that his software will obliterate, piggybacking on top of a slot paid for by someone else. "Some sites will be upset by this," he admits, but he isn't worried about lawsuits.
He should be. "Someone talking about replacing banner ads with ones he sells is attempting a technology war," warns Christopher Kelly, chief privacy officer at ExciteAtHome. Lim could be liable for a Web site's loss of ad impressions and any gains he brings in, says David Kramer, a lawyer at Wilson Sonsini Goodrich & Rosati in Palo Alto. A court could shut him down.
"The law does not like free riders—those who reap what they do not sow—and that's clearly what this guy is doing," Kramer says.
A war is raging on the Web, pitting ad-bombarded users against ad-selling Web sites. At stake is nothing less than control of the PCscreen—what you can access on the Web, what you must look at and how closely others are allowed to watch you while you do it.
Ad-blocking is but one front in this bout of electronic warfare. While Web sites sharpen their techniques to track user behavior and make their ads ever more personal, their nemeses forge tools that disable tracking, cover a Web site with unauthorized commentary or replace original content with their own. In a sense, they are personalizing the Web right back.
Caught in between is the average Web visitor, who is blasted with 520 marketing messages each day and could have to endure double that clutter in a few years, estimates Jupiter Research. Yahoo spewed out 8.8 billion ad impressions in just the past month or so.
Free ad-blocking software is proliferating, including such tools as AdKiller, Ad Muncher and PopUp Hunter. Most of these programs can recognize the domain name of an ad server that is about to beam out a new spot as you open a new page. They block the ad and leave a blank rectangle in its place, sometimes filling it in with another image. Fans brag they can surf up to three times as fast once they preempt bandwidth-sucking ads.
If this stuff catches on, Web sites have a lot to lose. Online ads will bring in $5.3 billion in total revenue this year, Jupiter says, and could triple in five years. Advertisers may be miffed, but they are somewhat helpless. They have no way of knowing whether an ad was blocked, because the offending software resides not on a Web server but on a user's own hard drive.
"It makes it more of a challenge for online marketers," says Robert Bethge, chief marketing officer at Datek, the online brokerage that spent $40 million on online ads this year. While he'd like to reach 100% of his viewers, "at this point it's hard for us to be sure."
Some Web businesses are safe from the anti-ad artillery. America Online and free Internet service providers such as NetZero and Juno use proprietary technology that is a tougher target for subversion."We knew hackers would try to do various things, so we opted for a closed architecture," says Ronald Burr, NetZero's president. AOL isn't completely invulnerable: Once users sign on, they can use an independent browser in combination with the ad-dodging tools.
Control over not just ads but even a Web site's central content is at stake in this online struggle. An 18-month-old San Francisco company called Utok has given away software to 100,000 people who use it as a kind of virtual spray paint for Web graffiti. Download the software and you can post comments in a small text box that obscures a portion of the screen. An adjacent, small browser window updates the running commentary with each click.
The host site has no way of monitoring the rantings. On CNET a Utok user who is advised that the site uses DoubleClick tracking software retorts: "Turn off your cookies!" One enterprising user posted his Motorola phone for sale on Ebay—without having to pay auction fees; technically the post was seen only by Utok users who tuned in.
But even vandals have to pay the rent. Utok, with $5 million in funding, mainly from Deutsche Telekom, aims to license its technology to other Web sites to let them slap links and logos on user notes.
A small outfit named Third Voice was among the first to let users paste over Web sites with the online equivalent of Post-it Notes (FORBES, July 5, 1999). Now it also licenses its software to sites such as ZDNet and CNN Sports Illustrated. Underlined words bring up a Third Voice browser that offers additional related information in a new window. Third Voice calls the approach "more site-friendly."
Elsewhere, enterprising interlopers are thwarting Web sites' efforts to monitor users' clicking habits and build profiles for targeted ad campaigns. The most prolific counterpuncher is Jason Catlett, who founded Junkbusters in 1996. Junkbusters' 500,000 users use Catlett's software to erase digital "footprints" that reveal which sites they have visited and grant only favored sites the right to hit them with ads.
A similar service called Guidescope offers free software to stomp out pesky "Web bugs," clear pixels that act like hidden cameras and record your movements. Guidescope also nixes "referrers," small pieces of code that let sites you are entering know where you have been and what you did there.
The fight is far from over. Yahoo and Ask Jeeves use their own hacks to prevent Guidescope and others from withholding referrer information. Some advertisers are beginning to use rich media that today's blockers can't touch. And advertisers can reshape their banners to evade block-out software that targets only standard ad rectangles (at 468-by-60 pixels).
Advertisers balk at being portrayed as villains. DoubleClick's chief privacy officer, Jules Polonetsky, says the ad onslaught enables most Web services to be provided free, and user profiles save time and frustration.
But some users don't buy it. On the popular hacker hangout Slashdot.com, wags stoke rumors that a "major software company" will soon offer free software—embedded with advertising. "Sounds like a nightmare waiting to be rebelled against," says one poster, "NatePuri." Fellow Slashdotter "el_flynn" doesn't mind, "as long as there is an option to disable it." Look for this battle to get even uglier.