Updated to add NebuAd's response.

Scott McNealy famously quipped, "Privacy is dead. Get over it."

Perhaps, then, what we're seeing in the case of NebuAd is privacy taking vengeance from beyond the grave.

The company that tracks people's Web surfing habits from Internet service providers to serve targeted ads has lost its CEO, Bob Dykes, who stepped down today in favor of a position as CFO with payment-services provider Verifone.

NebuAd, which declined to comment on Dykes' departure, has taken a beating this summer, beginning with the announcement by Charter Communications that it was shelving plans to trial NebuAd's service in response to privacy concerns raised by lawmakers.

In congressional hearings, Dykes repeatedly testified that his company's system didn't collect any personal information and that no one, "not even the government," could discern an individual's identity from the data that NebuAd collected.

Alas, those assurances might not be enough to save the company. In the midst of a PR crisis, NebuAd's clients have been dropping trials of the company's service. Rep. Ed Markey, D-Mass., plans to introduce legislation next year that would require NebuAd to retool its tracking mechanism to only collect data about people who have expressly opted in to the system.

In painting NebuAd as a pariah, it's beginning to look like Markey might have accomplished some of his mission before he even got his legislation introduced.

UPDATED:

NebuAd's statement:

"NebuAd's multi-channel advertising platform was designed to increase the value exchange between marketers and media companies through precise audience segmentation. With an initial go-to-market approach focused on the Internet service provider channel, our CEO Bob Dykes helped accelerate NebuAd into that market leveraging our multi-channel platform along with unique technology built specifically for the service provider channel. Servicing Internet service providers remains a priority of NebuAd, and we are enhancing our technologies in that area.

"In addition, however, NebuAd is also broadening its market via more conventional media channels and means. Accordingly, NebuAd's current President, Kira Makagon who has been responsible for NebuAd's advertising systems and media revenue, will assume the role of CEO to drive adoption of the platform across more traditional channels.

"Bob Dykes will continue to hold the position of Chairman of the Board."