It turns out, however, that some of the companies providing the filtering software have discovered the dollar value of their findings, and are selling students' Web-surfing trends to private companies.

The practice has raised the eyebrows of legislators, privacy advocates and parents, and is adding fuel to the recurring Internet debate surrounding the tension between personalized Web use and privatization.

Online Hall Monitor

N2H2 (Nasdaq: NTWO) is one firm that watches what students do on the Internet. The Seattle, Washington-based company's filtering technology serves as an Internet gateway by monitoring sites visited, pictures downloaded and information provided by students from kindergarten through high school.

But in addition to collecting data on the habits of young Web surfers, N2H2 also sells information derived from the data. The information aggregator, called Class Clicks, is being marketed to interested companies.

Nonspecific data is provided about age, race and census district with regard to students' Web travels, and is provided in a monthly report for a yearly fee of US$10,000, according to published reports.

Worldwide Worry

The company reviews and categorizes Web content using artificial intelligence tools to comb the Web 24 hours a day, organizing sites into over 40 specific categories such as pornography, e-commerce and auctions.

The demand for such Web monitoring software is strong worldwide. N2H2 has more than 16 million users and a network of more than 1,900 filtering-enabled servers in 11 countries.

Big Brother, Where Art Thou?

Existing legislation aimed to protect the privacy of kids online, such as the U.S. Children's Online Privacy Act (COPPA) which went into effect in 1999, makes it a crime for commercial Web sites to collect personal information from children under 13 without parental permission. This protects children from general marketing efforts, but not from the sort of data collection undertaken by N2H2.

The practice of selling information derived from this data in a separate enterprise, though well within legal standards, is generating interest, largely because school districts that purchased the company's filtering software were not aware that the information would be sold.

Clients of the filtering software, when notified, were split in their reactions. Some found the information unsettling, while others deemed it harmless. According to reports, only two sales of the aggregated data have been made so far: one to the U.S. Department of Defense and another to BigChalk, an educational network that provides Internet services.

Harmless Data?

"We're still in the process of defining the boundaries of what is acceptable," eMarketer analyst Steve Butler told Newsfactor Network. "It is going to become a prevalent issue as more and more companies implement Web analytic software."

Class Clicks marketing firm Roper Starch Worldwide makes it clear that information made available as part of Class Clicks is general in nature and does not target either specific schools or students -- and is not a cause for alarm.

"We're not at all selling information that tracks back to individuals," Bob Pares, senior vice president of Roper Starch Worldwide, told Newsfactor. "The main users of this information are the e-learning sites, places looking to better help set up Internet settings. It is quite honestly about developing better education."

Says Butler, "N2H2 is above-board and compliant with the COOP, but there will still be an emotional reaction from privacy groups." He acknowledges that how that emotional reaction plays out during the process of defining the boundaries of acceptable data collection remains to be seen.