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The Frog is sweating

The old adage is that if a frog is placed in boiling water, it will jump out, but if it is placed in cold water that is slowly heated, it will not perceive the danger and will be cooked to death slowly without realizing it.

This is a perfect analogy to what’s happening to your privacy online.

There was a time not too long ago, where people feared the openness and reach of the internet. Things like entering your personal information or (god forbid) credit card information into a website would have been unthinkable. The frog would have leapt out of that boiling pot. Now it’s the primary method by which many of us make our purchases.

As the internet began to grow, companies began to realize that besides having information at our fingertips, another compelling aspect of an interconnected world began to develop. They called is social interaction or social media. Basically they realized that while online, people enjoyed sharing things with friends and family and sought easy and safe ways to do that.

The fact is that there are currently a slew of online services that will track the following -

Your entire financial portfolio and account information (mint.com)

Your health history and status (google health)

Your incoming and outgoing email (gmail targeted adwords)

Your exact location and recent stops (foursquare and google latitude)

Your recent purchases (blippee)

Your employment history and education (linkedin)

Your personal photos, family ties, religious/political beliefs and interests (facebook, myspace)

There are two compelling reasons for the massive growth and popularity of these services. They were social and they were free. They allowed us to communicate and share with our friends and family and it was all free, baby. There were always some catches to that like we had to put up with a little bit of advertising and possibly agree to some cryptic privacy agreements, but nothing too hairy.

The problem is a strange thing happened on the way to this flat, interconnected utopia. The companies providing these free services began to realize that there was a tremendous inherent value in the personal information you agreed to turn over to them. They realized very quickly that advertisers were drooling to gain access to that information so they could better target and deliver their ads to you. The more they know about you, the better they can tailor an ad to you.

Let’s say I input into facebook that I’m a 21 year old guy who plays sports, likes horror flicks and loves baseball and hip hop. That information is invaluable to companies like Nike, Sony, ESPN etc.

The frog is now getting warm.

Facebook recently made major announcements regarding their new strategic plans moving forward which will allow users to share more information about what they like and be able to access and exchange that information with more resources online. Sounds good, right? Now when I go to Pandora, it already knows what music I like based on what I’ve already told Facebook. Here’s the catch. While Facebook is telling Pandora what music I like, it’s also sharing that information with advertisers, marketers and other interested parties.

Part of agreeing to the terms of service with Facebook is that you agree to relinquish that private information. Another significant problem is that Facebook makes it incredible difficult to “turn off” those sharing settings. It’s setup that way on purpose. Trust me. They don’t want you to be able to disable the privacy settings.

The frog is starting to sweat.

What has gotten people bent out of shape is that Facebook is essentially forcing these new privacy settings down your throat. They’re not just making it hard to opt-out, but they are being very clandestine about how and when these new policies are being applied. Their model is that the less you know about it the better.

In the past, your online privacy and security was of utmost concern in the hopes that your personal information did not get into the hands of the bad guys who were going to use it illegally. Now the biggest problem is that we are willingly turning that same information over to the “good guys” who are using in shady and distasteful ways for their own financial gain.

Like the frog who’s water is being boiled slowly, we have been systematically trained to give up some personal privacy in order to utilize these free services. It’s gotten to the point where we almost expect to be subjected to a certain level of openness and forfeiture of privacy for the privilege of using the service.

Here’s an excellent article I encourage you to read about why people are deleting their Facebook accounts.

It’s a tradeoff that more and more people are starting to question and decline.