Are you considering what the GP said, i.e. builds of popular browsers; or another browser entirely? I've been using Luakit a lot recently and it stands for a lot of the open and tweakable traits I care about in software. It probably comes with little spying mechanisms, and could be further strapped on with protections.
Privacy-friendly (as far as it can go) builds of available OS browsers is the way to go.
There are simple things, like changing the default settings for cookies, that do not require rebuild of course, and more involved things like making the browsers emit less information (panopticlick) on every request.
It is obvious, that it might break some things, which should then be possible to change by the user. E.g. not sending out installed fonts and screensize and tons of other info about your system might break some websites - webmasters should learn to ask friendly for that data, not expecting it.
This is not about engineering a new browser, but about privacy aware defaults for software distribution.
The biggest success of such a project would be that browser distributors will change their default distribution to maximum privacy. Obviously some of them will never do it - what will be a good thing as people will better learn about the differences.
Another big success would be that users will learn about their natural right to be asked before a browser sends out any information that is not absolutely needed to view a webpage.
I know that this is only a small piece in the puzzle, but browsers are still not privacy aware by default atm. it would be interesting to see what happens next.
Firefox certainly is one of the top targets for such a project, as Mozilla browser defaults are not acceptable for a project that wants to teach you about your online rights on first browser start. Transforming Firefox into a browser that actually delivers what Mozilla promises, will give a good discussion point for changing their distribution policy.
There is, btw., a similar project for chrome, Iron - but the panopticlick results for iron are still not perfect - minimizin the emitted information to only the neccessary bits is still ahead also for this browser.
Please note: a discussion about "destroying jobs in the ad industry" or "destroying the internet at all" is absurd in this context. If advertisers want to collect data, they must ask me to agree. It is good for the internet future, if only business models survive, that people agree to support.
