Democratic? Republican? Yahoo, Microsoft Know, And They Make Money From The Candidates

Ever sign up for a product from Microsoft (Nasdaq: MSFT) or use Yahoo (Nasdaq: YHOO) for search or an e-mail account? Ever get an e-mail from the Democratic or Republican National Committee or one of its candidates?

Those e-mails weren't accidents, nor were the accompanying solicitations for funds and support, a new report by ProPublica found. The process is growing and there's little place to hide.

Some very popular sites such as Facebook (Nasdaq: FB), the No. 1 social networking site, which had 901 million members as of March 31, and Google (Nasdaq: GOOG), the No. 1 search engine, which had 190 million Google+ members in the first quarter, claim they don't match member names with political ads.

Others, such as AOL (NYSE: AOL), the No. 7 website and one of the pioneers in e-mail, say they carefully respect user privacy.

Indeed, earlier this year, the U.S. Federal Trade Commission implemented a Do Not Track online policy similar to what the U.S. Federal Communications Commission has for its Do Not Call program. But few households in the country have been immune from calls, anyway.

Representatives of both Microsoft, the No. 1 software company and provider of such products and services as HotMail, XBox and MS Office, and Yahoo say they don't sell or trade names to political campaigns.

However, the Sunnyvale, Calif.-based search engine and supplier of Yahoo Mail acknowledged it's worked with Democrats and Republicans in the past.

Indeed, ProPublica cited a leading Republican strategist, Becki Donatelli, of Connell Donatelli, a major Republican media firm, who said Yahoo worked with the RNC in 2007 to match Internet users with voter lists.

A representative of President Barack Obama's campaign said it uses digital media but also respects and takes care to protect information that people share with us. Recently, even cartoonist Garry Trudeau lampooned Obama campaign e-mails in Doonesbury.

In the old days, the major political parties relied upon printed paper election district registration voter lists, had volunteers come into headquarters to enter telephone numbers from so-called reverse directories that were organized by street names, and then used them for canvassing or calling.

Now, virtually all of this is automated, save probably for fresh voter registrations. But electronics has become so robust that candidates send notifications and ads quickly afterward. The same holds for seniors and the sick who request absentee ballots; they receive literature in the mail.

None of the online services actually furnishes names and lists to the political parties. Instead, they rely on the software cookies they insert into browsers that track consumer movements among websites.

As ProPublica found, they leave the dirty work of matching to Experian (Pink: EXPGY) of Ireland and Acxiom Corp. (Nasdaq: ACXM) of Little Rock, Ark., which are among the world's biggest financial database and financial analytics providers. Microsoft works with Experian and Yahoo with Acxiom.

There's nothing illegal about the process. Indeed, consumers provide oceans of personal data to online retailers like Amazon.com Inc. (Nasdaq: AMZN), the No. 1 e-retailer; national drug chains like Walgreen Co. (NYSE: WAG) and CVS Caremark Corp. (NYSE: CVS) as well as their HMOs like WellPoint (NYSE: WLP).

Other data is already public on social networking sites such as LinkedIn (Nasdaq: LNKD) and Jive Software (Nasdaq: JIVE), where like Facebook users provide all manner of private data.

Some political operatives, though, claim the tools are expensive and don't always yield a victory. A representative of Grassroots Targeting, a Republican targeting firm, complained to ProPublica that even with the best matching, it's possible to locate no more than 40 percent of targeted voters.

Still, even a handful can make the difference.

Last month, Republican David Storobin won a seat in the New York State Senate by only 16 votes out of 22,000 cast in a special election in Brooklyn that had been Democratic for a generation.

Two years ago, Republicans won control of that body when another Democrat, incumbent Craig Johnson of Nassau County, was defeated by Republican Jack Martins by only 451 votes out of 85,883 votes.That seat had always been Republican.

Shares of Microsoft closed Wednesday at $29.13, down 16 cents while Yahoo shares fell 14 cents to $15.34. Facebook shares fell 13 cents to $27.27 and Google shares fell $4.01 to $561.09.

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