11-18 note: see my later post for more and updated information on this story.

A new ad delivery system unveiled this week by NebuAd will provide advertisers unprecedented details about your web access activities, allowing them to place their advertising more effectively.

Unlike conventional ad delivery companies that track your choices when you log onto a site that is part of its network, NebuAd takes the concept one frightening step further, tracking your browsing via your internet service provider (ISP).

The difference? Think of the typical ad delivery system as a lookout that spots you when you pull into the parking lot of the mall, who then alerts all the merchants that you've arrived, so they can put up the appropriate displays for your tastes.

In this analogy, NebuAd would be a guy staking out your house, ready to tail you, or your children, wherever you go, reporting your comings and goings to anyone willing to pay for the information.

The company claims that it aggregates and anonymizes the information such that it can't be misused, a claim that I view with great skepticism. As the FTC probes privacy issues and internet advertising, this company will probably serve as the stalking horse. If it's allowed to thrive, there will be little left to defend.

Google (NASDAQ:GOOG) has been a target for a number of internet privacy groups who feel that it keeps personal data on users for too long. Google argues that having the data helps deliver better search results. Plus, the company decided to cave into pressure and agreed to keep data on individuals no longer than 18 months.

Now, Google want to be out in front of the drive for Internet privacy. It is an unlikely about face, but it is one nonetheless. According to the Financial Times, Google is "calling for new international laws to be set up to protect personal information online." It wants a body like the UN to draw up the rules.

Google's position is clearly one that it would rather not be forced to take, but it is making the best out of a bad situation. Clearly, the more data a search engine has, the better the results. This allows for better text ad targeting and better profits. Now that Google has purchased DoubleClick the use of data collected from users is even more important to get good results for display ads.

But, Google has to protect its image and so instead of just going along, it will lead the parade.

The company may figure that if it take a central position in drafting new rules so that it can at least slant them a bit to its advantage. It is not being helpful for nothing.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Several weeks ago, AOL admitted it "screwed up" by releasing 20 million search records of over 600,000 AOL users. Yesterday the Electronic Frontier Foundation filed a formal complaint with the Federal Trade Commission asking the FTC to investigate AOL's breach of consumer privacy. The complaint also wants the FTC to require AOL to strength its privacy protection policies in light of the inadvertent release. The Electronic Frontier Foundation maintains that there was enough information released to allow a few individual users to be identified.

AOL removed the data set from the website intended for academic research purposes, but the information had already been copied and possibly circulated by the time AOL acted. AOL spokesperson Andrew Weinstein stated "AOL did not provide any personally identifiable information to a third party," according to Ellen Nakashima of The Washington Post. The Electronic Frontier Foundation submitted a confidential brief to the FTC asserting that AOL did just that. In addition to the complaint regarding invasion of privacy, the Electronic Frontier Foundation also lodged a complaint against AOL for deceptive or unfair trade practices.