Doug Sherrets (VentureBeat)
wrote a comprehensive analysis on the nature and value of "toolbar data". It's a great article. In particular, I like the comments he's collected from a number of different people in the industry with respect to their perspective on the nature and value of toolbar data.
It's clear that toolbar data (as he defines it) is indeed valuable.
By understanding the pages that real people like, and by knowing where real people actually spend their time, one can implement a fantastic analysis to deliver better search ranking (ordering results when someone knows what they're looking for) and discovery & recommendation (figuring out what someone might like, when they're not sure what to look for).
The sort of data needed to support such analysis can be naturally captured in a browser toolbar. But algorithms must have access to the data from all users who participate in the ranking or recommendation process.
So, provided that you're prepared to ship all that critical data from your personal computer to some centralized processing system, then the algorithms can work their magic.
But sending toolbar data from each user's personal computer is a process fraught with privacy concerns.
So, at Wowd we take a different approach... no toolbar data comes off the local machine, but the user still benefits from web search ranking, recommendations,
etc., that use anonymous site "vote" data.
Roughly, it works like this.
I'm a member of the Wowd network, and I visit a new web page. My local Wowd client first checks to see if that web page is publically available -- meaning, can other people out there on the web see the same page that I’m seeing.
If I’m visiting a public page, then the site is
nominated for inclusion in the Wowd index. No personally identifiable information leaves my machine!
By visiting the site I'm simply and implicitly
voting for it. That's all. The indexing of the publically available site is done from another machine in the Wowd network, not mine.
So Wowd users get all the benefits of a system that understands toolbar / click-stream data, without having to actually share a single scrap of personally identifiable information. The results are better for our users, and the privacy is better too.