Internet banner-advertising company DoubleClick Inc. (Nasdaq: DCLK) has had a lousy year. First, the Federal Trade Commission (FTC) launched an investigation of the company's ad serving and data collection practices. Second, the company faces six private lawsuits from privacy advocates. Third, the attorney general of New York has initiated investigations of the company, and the attorney general of Michigan has filed notice of intent to sue. These troubles combined to kick DoubleClick's shares down 33% as of yesterday from their January 3 high.

Now the Wall Street Journal has reported that AltaVista, a subsidiary of CMGI Inc. (Nasdaq: CMGI), will no longer offer DoubleClick personal information about its users without their expressed consent. This hurts because AltaVista has long been DoubleClick's most important client, though some of the bloom has gone out of the rose lately. AltaVista accounted for only 11% of DoubleClick's revenue in 1999, down from 27% in 1998. The breach expanded earlier this year, when DoubleClick announced that they have inked a three-year contract with Lycos Inc. (Nasdaq: LCOS), another CMGI holding, to be their exclusive ad server.

To add insult to injury, the Journal also says that Internet shopping delivery service company Kozmo.com will end its relationship with DoubleClick sooner than anticipated because of privacy concerns. The double-whammy poured fresh fuel on the fracas over DoubleClick's data-collection policy, driving the stock even lower.

Kozmo's departure doesn't hurt DoubleClick too much. As the company pointed out today, "Kozmo.com represented $3,579.96, or 0.003% of our fourth quarter system revenue." Besides, Kozmo had already decided to dump banner ads entirely from its revamped site because they were producing insufficient revenue. The company acted sooner than it had planned, however, in part because the Center for Democracy and Technology alleged that Kozmo might be sharing information with DoubleClick about video titles its customers have ordered.

DoubleClick collects data on Internet traffic and sells that information to advertisers, so that they can target banner-ads to particular users. Until recently, the FTC didn't consider this data collection to be controversial, since it is non-personal. DoubleClick identifies users only by a tracking number, leaving their real identities unknown. In November, however, DoubleClick completed its merger with Abacus Direct, a company that collects information about consumers' purchasing habits through a database that tracks catalog subscriptions and purchases.

The combination has fostered concerns that DoubleClick will have too much personal information about us surfers. DoubleClick has said that it will link its online, impersonal data with Abacus' offline, personal data, but only on an 'opt-in' basis, meaning that the consumer verifies that she approves of the linkage. DoubleClick has assured the public in its privacy statement that it will not disclose any personal information in its database.

AltaVista's shift to an 'opt-in' model for impersonal surfing data may bring about a significant change in the way Internet advertising companies collect information. DoubleClick currently tracks Web surfers on an 'opt-out' basis -- if you don't want DoubleClick to track your Web movements, you have to go to the company's Web site and explicitly remove yourself.

DoubleClick says that AltaVista's latest move won't strain their relationship, but the move creates further pressure on DoubleClick to dispense with its plans to integrate its database with Abacus'. Gone are the days, it seems, when DoubleClick operated under Joe WebSurfer's radar; now the company has a real PR problem on its hands.

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