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ZDnet reports that a new Web company, Predictive Networks Inc. of Boston, founded by Devin Hosea, 30, is causing concern among privacy advocates.

The reason: Predictive has developed software that can track every site a Web surfer visits and build a profile. If a user were to visit an online sailing site, say, then a travel site and a scuba site, Predictive's profile model might immediately send that person sunscreen or snorkel ads in pop-up windows. The company also plans to target news content based on a user's profile.

Predictive believes that Web users will be willing to let it track their every move online in exchange for cheaper or free Internet service. Starting today, IDT Corp., of Hackensack, N.J., will use Predictive's software for its free Internet service called free-atlast.com.

ZDnet reports that Advertisers are so eager for this sort of precision targeting that some have already agreed to pay ad rates as much as six times more expensive than usual.

Predictive Networks product requires ISP customers to download Predictive's software onto their personal computers. The program then keeps tabs on which Web sites were visited. Each user receives a score based on the sites they visit. For example, a visit to the Fidelity Web site would trigger a high score in the areas of age and income, he says, reflecting the older wealthy visitors typical for the site. The score is then modified based on each subsequent site visited.

Hosea says that Predictive stores only the scores in its database, and discards the actual list of sites visited. The ISP doesn't have access to the scores. Users will be allowed to look at their scores twice a year, he said, much as people can review their credit reports.

Hosea says the service allows Predictive to send ads and content that users actually want to see. In some market tests, he says, users clicked on 16 percent of ads they saw using Predictive's software. Industry statistics show that less than a 1 percent average is more typical on the Web.

For full story, see http://www.zdnet.com/zdnn/stories/news/0,4586,2558316,00.html

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