Creating Marketplace Competition for Privacy

Aug. 15, 2007 — -- The competitive announcements came rolling in one after another -- from Google, Ask, Microsoft and Yahoo -- until all the largest players in the hypercompetitive search market had spoken. The companies weren't trumpeting the launch of new products or services but rather the steps they were taking to protect their customers' privacy.

For the vast majority of Internet users, the Web 2.0 revolution has translated into an unprecedented capacity to store information, manage day-to-day tasks and communicate -- at little or no cost -- using the seemingly limitless free storage and functionality offered by Internet companies. If there's a dark side to this profusion of offerings, it's that we as users are being asked to surrender ever-increasing amounts of sensitive personal information as a daily cost of living online.

Which is what makes the recent string of announcements from the nation's largest search companies so encouraging. This may signal the emergence of a new marketplace in which robust privacy protections are as much a source of competitive differentiation as anything else companies offer to their customers.

Among the recent developments: