An interesting Day for Digital Privacy.

Professor Daniel Solove, a leading thinking on the importance of consumer privacy, and author of 'I've Got Nothing to Hide and Other Misunderstandings of Privacy,' has a new book out called Understanding Privacy. Chapter 1 is available for free download. It’s worth checking out.

Undertone Networks announced this week that it has joined the Network Advertising Initiative, a self-regulatory privacy association. The interesting thing here is that customer inquiries drove the decision, demonstrating that advertisers care about the privacy policies and practices of the companies they spend with.

BI-ME just reported that some 15 privacy and public interest groups have come together to urge the US Congress to push forward proposals to limit the growing practice of Internet Service Providers (ISPs) targeting ads to subscribers based on their personal web activities.

So what are the guidelines?

The AIB and Online Privacy Alliance have both done a good job of highlighting the important aspects of a sound Internet Privacy Policy.

A basic rule of thumb is that targeting users anonymously based on your database of specified user attributes is ok. The jury is still out on gathering unspecified usage and activity data tied to User IP address. Disclosing how you capture and use data and allowing users to easily opt out are both important. Always keep in mind how costly a negative privacy public relations event can be. Your relationship with your user is likely your most important asset. A comprehensive Privacy Policy can protect your company as much as it does your users.

Here’s a very interesting report that shows how a clearly stated privacy policy and open operational practices can go a long way toward making users more comfortable.

The Free and Open Experiment

Much Web 2.0 development continues to march in lockstep towards the evangelized vision of an Open and Free Internet. This boundless, free cyber-territory promises to keep us all connected and engaged in a growing number of personal pursuits. The most exciting promise of the free and open movement is the ability to aggregate our online activities, collaborations and content to produce more complete and meaningful personal profiles. Lifestreaming is just one more step towards this promise. Will there come a day when we all live and act as fully, freely, confidently and securely online as we do offline? Will we play a hand in managing and preserving our own digital legacies?

The idea of an open, democratic and ever progressing Internet is exciting. Yet today’s open web can be a complex, time consuming, and intimidating space for many. I’d like to take this opportunity to explore some of the potential hazards lurking beneath the grid.

The most curious aspect of the Free and Open movement is how it attempts to either oppose or ignore some indelible realities that drive a competitive marketplace. The spirit, values and principles of this open vision come from the Open Source software culture, and from an emerging set of business and marketing ideals best expressed by the writings of Chris Anderson. Though these principles work well in the world of collaborative software development and in certain loss leader marketing formulas, the belief that these models will sustain a complex, interconnected and increasingly competitive internet economy seems like a mighty big assumption.

Many of the companies bringing the free and open vision to life will need to find sustainable profit centers to maximize their investments. The online advertising model today still lacks the precision and per-page revenue potential necessary to keep most free web businesses healthy and growing. We as users are already served by many disparate, sometimes competing concerns with unfettered access to our personal activities, data and content. Is Facebook’s Beacon an indication of the kind of revenue driving initiatives that other companies may pursue to turn our usage into dollars? If competing Social Networks, Open Platform Developers, Content Silos and Aggregators enter an economic atmosphere that forces the monetization of assets, will user data, content and activity present itself as low-hanging fruit?

When the most innovative and successful Web2.0 applications are built mainly as acquisition targets, are we cultivating an environment where the Internet’s most valuable assets rise to the hands of a few Industry behemoths like Google, FaceBook and Microsoft? Wouldn't the Free and Open ecosystem be healthier if viable companies remained independent and able to deliver on their long term missions? Does the 5-year exit strategy really encourage a long term mission?

Today’s rapid development also promises to keep us all engaged in an endless stream of newer, better, cooler Internet tools. This innovation is what keeps the Free and Open Web engaging and exciting. But the indirect cost of navigating this constant stream of new products is hardly negligible. It includes:

1) A counter stream of new user agreements, privacy policies, and product marketing.

2) A higher likelihood of accidental data or content loss, steep learning curves, and security breaches.

3) Increasing complexity in managing growing quantities of decentralized content and documented usage.

4) More doorways into personal relationships, content, and recorded activities.

What about the Internet’s much venerated long tail? As life gets easier and cheaper to capture, the amount of personal content each of us produce also increases exponentially. Some have begun wondering if the swelling multitude of user generated content will eventually drag down the value of UGC inventories. When our baby pictures and vacation videos stop drawing attention, and storing them begins to drag down the value of fresher content, will companies purge these personal moments from their inventories? Will the documented experiences of today’s teens still be there when they return to share these moments with their own children? Will our digital lives be seen as our own valuable personal property, or as commoditized “attention economy” inventories to be freely managed and leveraged at the discretion of the many companies that touch them? Will aggregation and filtering from multiple privately owned silos produce satisfying and reliable Lifestreams?

If we continue this rapid pace of growth and this slow pace of understanding user issues and concerns, we'll continue to see many online users achieving an unsatisfying work-to-value ratio in the coming years. The free and open movement could end up subverting the excitement and confidence of many users in the short term if it brings with it unexpected intrusions, inconveniences or other harms.

I’m not trying to play Chicken Little. The Internet industry will answer each of these questions in time. But as the Web 2.0 landscape continues to evolve, mature and consolidate, fatigue, frustration and insecurity will likely play an important role in bring these issues to the forefront. Industry leaders are already working to define Data Portability, and OpenID standards. The bigger issue of data and content ownership seems likely to remain unsettled and contentious for some time to come.

Make no mistake, the sheer power and potential of the medium will continue to breed inevitable challenges and uncertainties. Even with much yet to be fleshed out, the Free and Open Web is and will remain an exciting and attractive value proposition for many users. Still, others will choose to take their personal lives, cherished moments and close relationships off the wider social graphs and seek quieter and more intimate settings. Sites like ASmallWorld and TeeBeeDee are proof of the growing demand for more focused and personal environments and experiences. It’s also inevitable that many more will pay to place their lives outside that attention economy. I think the driving factor is how users choose to live. Some like the mass reach and openness of Web 2.0. Others prefer to keep their real lives between friends and family.

One thing is certain…. innovation and options will abound for everyone...

See also: There’s No Such Thing As Free! by Max Kalehoff, Choking on the Long Tail by Tom Foremski, Choices, Connections, Commitments by Pete Blackshaw, The ClickZ Network, Jul 10, 200, Visualizing Social Fatigue by Josh Catone and Welcome to the social mess? by Caroline McCarthy May 12, 2008