DoubleClick Inc. on Thursday backed off plans to cross-reference its own vast records of Web sites consumers like to visit and shop — information many people had thought was confidential — with lists of millions of names and other identifying data.

While data on Web surfing is often tracked by online marketers, the information can't easily be connected with a person's identity.

Privacy groups had worried that DoubleClick would build virtual dossiers on consumers that could be sold to marketers. Users could be deluged with junk mail as well as potentially be discriminated against by businesses that track everything from health conditions to income status.

The big New York-based firm electronically inserts advertisements on about 1,500 Web sites on behalf of Web advertisers.

"This is a great first step forward for Internet privacy," said Ari Schwartz of the Center for Democracy and Technology, a Washington-based group that tracks civil liberties on the Internet.

"Companies will better recognize they have to take privacy into account before building technologies or business practices on the Internet," he said.

Weeks of legal actions and government probes into DoubleClick have placed the online ad company at the center of a growing clash between businesses seeking to exploit the Internet's pervasiveness and those fearful of the consequences.

Yet not everyone was assuaged by Thursday's action. Michigan Attorney General Jennifer Granholm, who had threatened to sue DoubleClick, said she was pleased by "DoubleClick's acknowledgment that it made a mistake" but remained wary of the company's privacy commitment.

Granholm continued to level criticism the company failed to disclose to Internet users it is "systematically implanting" electronic files on the hard drives of users' computers — known as "cookies" in tech parlance — without their knowledge or consent.

Granholm, who is pushing for government rules to punish invaders of people's Web privacy, said her office would meet with DoubleClick on March 13, as planned, to discuss how the company would address Michigan's concerns.

In addition to Michigan's threatened lawsuit, at least six private suits have been filed against DoubleClick. Federal regulators and New York state law enforcers have launched probes, and several DoubleClick customers backed away from using the ad agency.

Kevin O'Connor, DoubleClick's chief executive, said in a statement, "I made a mistake by planning to merge names with anonymous user activity across Web sites in the absence of government and industry privacy standards."

"I think it's obviously significant," said Marc Rotenberg, general counsel for the Electronic Privacy Information Center, a Washington-based privacy advocacy group. "The real critical thing to understand here is how important anonymity is to the success of the Internet."

DoubleClick and other Web companies, for their part, argue that industry should be allowed to police itself and that "targeted advertising" — directed at consumers with specific online profiles — is beneficial to both business and Internet users.

"There's all sorts of degrees," O'Connor said in an interview. "If no targeted advertising is available on the Internet, it's almost impossible to make the Internet work. I'm confident we all share the same goals — keeping the Internet free."