SEARCH FIRM TOSSES THE COOKIES By Pete Barlas Hakia says a "cookie"-free diet will give it some heft in the Web search field. The little-known company is one of the few search engines that doesn't use user-tracking software known as cookies, and it hopes to make that fact a key part of its marketing. Use of cookies has sparked some fears by users and privacy advocates. All the major search service providers, including Google (GOOG) and Yahoo, (YHOO) use cookies to compile records of online searches to better tailor searches to each user. Critics have long contended that the use of cookies is an invasion of privacy. Search services use cookies to improve the quality of their search results. By having a record of where a user has searched, search engines say they can send that user more relevant search results. Better search results also lead to users getting access to more ads that they are likely to click, thus bringing more revenue to the search services. But Hakia gets improved search results without cookies, says Riza Berkan, chief executive of Hakia. "Our technology doesn't require user tracking at all," he said. "We don't need to know who you are in any way or any capacity, compared to some other search engines." Hakia has won at least one important fan. He's Peter Eckersley, staff technologist for the Electronic Frontier Foundation, a consumer watchdog group. "(Hakia's) system is really much better than the major search engines," Eckersley said. No big controversy regarding cookies has surfaced of late, and many people seem to find cookies fairly innocuous. Cookies involve small bits of data that Web sites leave on users' PCs when they visit a particular site. In most cases, they're designed for convenience — cookies let users customize a site's settings or store their password for easy logins. But if a user visits multiple sites owned by the same company — or sites served by the same advertising network — that info can help trace users' online activity within those groups of sites. Cookies don't — at least, not exactly — keep track of personal data. But it is because of cookies that, for example, a Joe Smith will click on a Web site and see the site welcome him with the words "Hi Joe." It's why, if Joe Smith has often searched for travel packages to the Cook Islands, certain sites might direct him to island travel deals — and ads. But there are easy ways to remove cookies for users who have a problem with them. Hakia's sans-cookies approach won't gain it many, if any, users, says Greg Sterling, head of Sterling Market Intelligence. "It's a weak marketing angle for them," he said. "Most consumers wouldn't know what a cookie is in the first place." It also seems to be hard to be completely cookieless. When the Electronic Frontier Foundation examined Hakia's system, at IBD's request, it found "trace" elements of cookies. Melek Pulatkonak, Hakia's chief operating officer, called them inadvertent "crumbs" attached to newly installed computer servers. "We always add new servers to our system, and servers' default setting is cookie-enabled," she said. "We've now disabled the cookies on the new servers." Despite the crumbs, EFF's Eckersley praised Hakia's system. "The fact that they do not track sessions with cookies does improve the privacy of their users," he said. Search engines use cookies to improve their algorithms, or the formulas they use to provide the best search results. "They watch what results you click on and that goes into their database and it improves their algorithm," Berkan said. Hakia operates a "meaning-based" search engine that looks for the best match between search queries on the Web. The company has raised $16 million from several investors, including former U.S. Sen. Bill Bradley. ... Posted at: http://www.investors.com/editorial/IBDArticles.asp?artsec=17&artnum=1&issue=20070515