• by Wendy Davis  @wendyndavis, September 4, 2008

In another blow for behavioral targeting firm NebuAd, Bob Dykes has stepped down as CEO. Dykes, who has joined electronic payment systems company Verifone Holdings as senior vice president and CFO, will remain chairman of NebuAd's board.

The news caps several tumultuous months for NebuAd, which faced criticism from some lawmakers and privacy advocates for its plans to purchase information about people's Web activity from their broadband providers and then serve targeted ads. This summer, several Internet service providers backed away from plans to partner with the Silicon Valley start-up. NebuAd also laid off personnel last month and recently shed its outside public relations firm.

NebuAd said in a statement Wednesday that it intends to work with broadband companies, but also will expand to "more conventional media channels and means."

The company also said that president Kira Makagon will take over as CEO "to drive adoption of the platform across more traditional channels." NebuAd declined to elaborate.

Privacy advocates and others objected to NebuAd's Internet service provider-based platform because broadband companies have access to comprehensive information about Web users, including every search query entered and all sites visited. With that type of detailed data, it's possible to identify some people even without knowing their names.

Advocates and lawmakers also questioned whether sharing information about users' broadband activity violated federal wiretap laws.

Dykes defended the company on Capitol Hill, testifying that all information collected was anonymous and that users could opt out. "I feel like Galileo when he was viewed with skepticism on demonstrating that the earth revolved around the sun," Dykes complained to Congress at a July hearing.

Privacy advocates and some legislators, including Rep. Ed Markey (D-Mass.), said that companies like NebuAd should not deploy ad-serving platforms that rely on data from Internet service providers without first obtaining users' explicit consent.

Markey and other lawmakers also took their concerns directly to Internet service providers. In May, Markey and Joe Barton (R-Texas) asked Charter Communications to delay plans to test NebuAd. Soon afterwards, Charter suspended plans for a pilot, while other broadband providers that had tested the service said they would hold off on further tests pending Congressional inquiry.

Last month, Markey and other legislators asked 30 Internet service providers whether they had ever worked with NebuAd or similar companies, or whether they planned to do so. In all, six companies--Bresnan Communications, CableOne, CenturyTel, Embarq, Knology and Wide Open West (WOW)--said they had conducted tests of NebuAd's platform, but none were still deploying it.

At least one other online ad company has also backed away--at least temporarily--from a plan to deploy broadband provider-based behavioral targeting. The Sonora, Calif.-based Front Porch tested such a platform earlier this year, but only with Web users who explicitly opted to receive targeted ads.

Company CEO and founder Zachary Britton said the company decided to stop the tests around June, to wait and see how events unfolded in Washington.