The year of surfing dangerously

January 10, 2011: 11:55 AM ET

Facebook, Google Buzz, Gawker, Wikileaks, Chinese government hackers -- last year, the wheels fell off Internet privacy. So, aberration, or new normal?

By Kevin Kelleher, contributor

Was it only a year ago that Mark Zuckerberg was accused of declaring the age of privacy over?

Of course, he never said any such thing -- he was trying to say that blogging had gotten people to feel more comfortable about sharing information online – but the meme took flight anyway.

Rogue memes go viral because they have a kernel of truth to them: Only a few months later, Facebook ignited a privacy firestorm with changes to its site's design that left nearly everyone confused about how to keep their data private. Some users boycotted the site in protest.

By year's end, though, all was forgiven: Time named Zuckerberg its Person of the Year, many of the boycotters returned to Facebook, and Goldman Sachs (GS) bought a pricey piece of Facebook's success -- a success built on the back of all our personal data.

Maybe the age of privacy is over after all. Zuckerberg may not have said so, but he did what he could to snuff out web privacy.

Oddly, if you want to catch a tech CEO's boldly declaring that privacy is done for, you have to go back to 1999, when Sun Microsystems' Scott McNealy scoffed, "You already have zero privacy. Get over it." In 2011, the remarkable thing about McNealy's candid statement wasn't how early in the web's history he made it, but how long it took most of us to believe him.

As we hang our new calendars up on the wall, we pause to look back on the previous year with wistfulness or dread. As I look back on the web in 2010, I see two things, both represented in Facebook's trajectory through the year: Web companies harvesting personal data had their best years ever. And the web became a lot less fun -- in many ways as dangerous a place to visit as it's ever been.

In an important way, those two developments are related. Personal data is the fuel powering the social web -- as well as the profits of web giants.

In the web's early, Wild West days, the chief hazards used to came from online highwaymen -- spammers, scammers, phishers and malware peddlers. They are all still chronic problems, but it's gotten easier to work around them. Now that the web is growing up, gotten much harder to get around is the evolution of the web into a platform that is designed to benefit companies at the expense of the freedom of web users.

Web profits and web privacy don't have to be mutually exclusive. But too often personal data is harvested and used in a thoughtless or hamfisted fashion. Take the launch of Google (GOOG) Buzz, a move against Facebook's emergence that ended up being a bigger privacy debacle than anything Mark Zuckerberg ever dreamed up. Buzz sucked Gmail contacts into to its instant social network, creating instant problems when people received emails from abusive ex-husbands.

After Buzz fizzled, Google CEO Eric Schmidt would frequently appear to talk about how important safeguarding privacy was to Google. He'd say earnest things like, "I don't believe society understands what happens when everything is available, knowable and recorded by everyone all the time," A fair point, but what happens when Google doesn't understand?

To be sure, there were plenty of threats on the web that didn't originate from companies. Google itself was the target of Chinese hackers, who may have been working at the behest of the Chinese government, according to U.S. diplomatic cables released by Wikileaks.

Wikileaks had trouble receiving online donations when the State Department pressured PayPal and Mastercard (MA) and others into blocking funds. PayPal and Mastercard had their sites taken down by Anonymous, the legion of hackers who gather on 4chan.org. 4Chan's message board was also knocked offline. And so on.

It was all one big long daisy chain of online headaches. And it's part of a broader trend in which, even as the web is playing a bigger part of our lives, it's threatening to become a bigger hassle for us as well.

Fittingly, the year ended with a rash of bad news that suggests 2011 isn't likely to be any better. Gawker Media's servers were hacked and the emails and passwords of 1.25 million of its readers uploaded to the Pirate Bay. Some of the most popular iPhone apps were found to be sending personal data like location and phone numbers to advertisers. The FCC passed a set of neutrality rules that fell far short of the openness that people are used to on the web, particularly on the mobile web.

In most of these areas -- the corporate control of personal data, the risk of malware and stolen passwords, the ability of ISPs to throttle bandwidth -- battles will continue to wage over protecting individual interests. But there is also a growing resignation that these problems are the price to pay for being on the web. At some point, when the price gets to be too high, it may be too late to go back to the kind of open web we enjoyed for years.

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About This Author
Paul Smalera
Paul Smalera

Paul Smalera is a senior editor for Fortune.com, guiding the website's coverage of tech, finance, investing and the economy. He has written about a wide variety of topics -- from the inner workings of the Google search engine, to the biodiversity protecting Svalbard Global Seed Vault, to the economics behind online dating websites and the impact of the Fed's policies on the national and global economy. A true generalist, Smalera believes every story is a business story if you follow the money.

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