This post does not reflect the views of my employer or any organization I am affiliated with. Obviously. But I felt I had to say it again, just in case.
I have been thinking about privacy in the world of Web services for several months now. I've written quite a bit, mostly in French, and most of the material I have been producing is not yet public. Then I find this article of Dan Lyons in Newsweek that remarkably nails it down: privacy is a currency for which we don't know the change rate. It's something we're giving to online services without knowing what it's worth. I wish I was able to write English this clearly...
Excerpt from Daniel Lyons' On the Web, privacy has its price, to be read carefully:
What's happening is that our privacy has become a kind of currency. It's what we use to pay for online services. Google charges nothing for Gmail; instead, it reads your e-mail and sends you advertisements based on keywords in your private messages.
The real holy grail is your list of friends. With that information, marketers can start sending more targeted messages. If you like a certain movie, or album, or mountain bike, your friends will probably like those, too. So they'll be good targets for ads for those products. Of course, your friends are not going to buy everything you do. It's not pinpoint accuracy. But the data helps marketers "narrowcast" their advertising. And it sure beats buying commercials on TV or splattering ads all over the Internet.
The genius of Google, Facebook, and others is that they've created services that are so useful or entertaining that people will give up some privacy in order to use them. Now the trick is to get people to give up more—in effect, to keep raising the price of the service.
These companies will never stop trying to chip away at our information. Their entire business model is based on the notion of "monetizing" our privacy. To succeed they must slowly change the notion of privacy itself—the "social norm," as Facebook puts it—so that what we're giving up doesn't seem so valuable. Then they must gain our trust. Thus each new erosion of privacy comes delivered, paradoxically, with rhetoric about how Company X really cares about privacy. I'm not sure whether Orwell would be appalled or impressed. And who knew Big Brother would be not a big government agency, but a bunch of kids in Silicon Valley?
The problem with buying things with your privacy is you really don't know how much you're paying. With money, five bucks is five bucks. But what is the value of your list of friends? If it's not worth much, your membership on Facebook may be the deal of a lifetime. If it's incredibly valuable, you're getting massively ripped off. Only the techies know how much your info is worth, and they're not telling. But the fact that they'd rather get your data than your dollars tells you all you need to know.