Summary:

TRUSTe, an organization that certifies websites for having good privacy practices, is turning into a for-profit enterprise, and has taken an…

imageTRUSTe, an organization that certifies websites for having good privacy practices, is turning into a for-profit enterprise, and has taken an unspecified investment from VC firm Accel. Saul Hansell at Bits cites sources putting the funding at $10 million. You’ve probably seen their seal of approval on some of the 2,400 sites they monitor. Like the Good Housekeeping Seal of Approval, it’s supposed to convey a sense of, well, trust, to users, by showing certification from a third party. With the investment, the company plans to expand and being targeting emerging areas, like social networking and location-based services, each of which brings a whole host of privacy issues that are still just getting unpacked. Release.

In his report, Hansell wonders whether the privacy motive will undermine the organization, since it makes money by certifying sites, not by telling them they don’t qualify. Of course, for-profit certification is common. It’s essentially what companies like VeriSign (NSDQ: VRSN) do with their SSL security certs, though that’s also for computers to read and understand, along with humans. What’s more, non-profit status is no panacea. The company has had run-ins in the past with security experts, like Ben Edelman, who have claimed that many TRUSTe certified sites aren’t up to par. (See this 2006 report from ClickZ for a summary of the back and forth). For any organization, for profit or not-for-profit, ensuring that their mark maintains a high standing is key to their being able to deliver value.

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