'Online Privacy Fears Stoked By Google Twitter Facebook Data Collection Arms Race'' ''Your
E-Book Is Reading You'' '' 'Instant personalization' brings more privacy issues to Facebook''.
These are only a few recent examples of media headlines that deal with the issue of online
privacy and personalization. Scholars and managers have repeatedly stated the benefits of
personalization which is targeting products and services to individual customers and
constitutes a key element of an interactive marketing strategy. In order to accurately estimate
the needs and wants of customers it is necessary to gather a significant amount of
information. Privacy concerns may arise when personal information about customers is gathered.
If this arises personalization can backfire by making clients reluctant to use the service or
- even worse - developing a negative attitude towards the company. A recent survey by Opera
Software (2011) found that Americans fear online privacy violations more than job losses or
declaring personal bankruptcy. This had induced politicians to introduce regulations and laws
that address online privacy that safeguards consumers against online monitoring and intrusion
into confidential user information. However privacy online remains a complicated issue for
both managers and politicians for new personalization technology emerges at a much faster pace
than political regulations and guidelines. This is the first study that establishes a link
between different types of data collection data usage and concerns for information privacy.
It also analyses the impact of privacy concerns on value risk and usability perception of
personalization and the users willingness to transact with the website. Further it develops a
conceptual framework and tests it by collecting responses to a questionnaire from an
online-crowdsourcing sample of Amazon Mechanical Turk.
