The story has gone something like this:

Google: “You don’t need to have any privacy concerns about the IP addresses that we store — they aren’t personally identifying.”

Viacom: “Okay, then, give us your user logs.”

Google: “No! That’s a violation of privacy!”

Judge: “But you just said…”

We all know that people can figure out who we are based on our activity. A person living at 123 Main Street who works at the power company, exercises at Bally’s, and drinks coffee at the Starbuck’s on 23rd and Vine doesn’t have much of a secret identity, even if I don’t tell you her name.

If you claim on the one hand that your data don’t hold any privacy implications, it stands to reason there shouldn’t be a problem if those same data are released. The fact of the matter is, there are privacy considerations when you’re dealing with people’s search queries or video preferences.

This isn’t the first negative tone I’ve heard towards Google in recent days. They’re getting slammed for hiking the price of day care. They’re getting blamed for fostering obscenity. A Valley bigwig says the company is an effing train wreck.

I’m confident the truth, as always, is more complex and multifaceted than these articles portray. Part of it is indicative of the sheer size of the company: grow enough over a long enough period of time, and folks will find something to complain about. Part of it is demonstrative of the stratospheric expectations they’ve set. Part of it is that they face the same microscopic level of scrutiny as a candidate for President.

When it comes to privacy, however, they’re learning that they can’t have it both ways. People are giving the judge a hard time for not understanding the implications of his order, but the judge was following irrefutable logic, based on Google’s own claims, policy, and videos.

What do you think of the Viacom-YouTube-Google privacy porridge?

One of the questions on the VortexDNA survey is about the percentage of time you feel you’re able to be yourself at work.

It’s a great question. The first time I took the survey, I was in a job that I didn’t enjoy. My natural state is one of irrepressible exuberance, and yet I spent my days sullenly biting my tongue and tamping down my spirit. As I responded to the question, I knew how much I was letting myself down.

Things have gotten a lot better since then. I work for myself. I share an office with two friends, people with whom I genuinely enjoy spending time. I choose how I spend my days and with whom I choose to do business.

Yesterday my officemates and I went out to lunch together. As we placed our orders, I spied Raf, from VortexDNA, coming in.

Now, you may have figured out from the title of this blog that I do a bit of work for VortexDNA. And I certainly would never want to jeopardize my business relationship in any way. But here’s the beauty of it: he came in, and he joined me and my friends for lunch, and the dynamic didn’t change. It didn’t grow stilted. I didn’t feel fearful that he might see the non-work side of me.

We all adjust our behavior to be appropriate for a given situation. I might swear with my friends, for example; I wouldn’t on this blog or with my mother-in-law. I choose carefully when and with whom I’m willing to engage in a conversation about politics or religion. But there’s a big difference between deciding to be appropriate and suppressing your inner nature.

I’ve been thinking about this a lot lately because of the privacy issues surrounding Facebook. A lot of the complaining is from people who have carefully compartmentalized their lives and would be livid if their various personas were ever to overlap. Professional career women having their lesbianism dissected at the office water cooler. Authoritarian parents letting their kids see them as real people.

Take this quote from a New York Times article dissecting Facebook’s privacy problems:

Mr. Das, who joined Facebook on a whim after receiving invitations from friends, tried to leave after realizing that most of his co-workers were also on the site. “I work in a small office,” he said. “The last thing I want is people going on there and checking out my private life.”

“I did not want to be on it after junior associates at work whom I have to manage saw my stuff,” he added.

There’s nothing wrong with Mr. Das’ desire for privacy, and I’m not suggesting that our every weekend fling should be shared indiscriminately with our business colleagues. I do wonder, though, if they are two separate issues: the Facebook one, and the one in which our many lives are kept completely dis-integrated. Is there something wrong with the fact that so many of us don’t want people to see who we really are?

What do you think about it?

Yesterday, Michael Barrett, Chief Revenue Officer for Fox Interactive Media, gave what was probably the most delicious announcement of his life. FIM, of course, owns MySpace, and the announcement in question was the early results of their ‘hypertargeting’ ad program: a 50% to 300% gain in click-through rates for participating advertisers and a 50% gain in CPM rates.

Almost more importantly, the company managed to pull the stunt off without incurring any of the “How dare you betray me?” response generated by Facebook’s Beacon.

Mark Walsh at Online Media Daily covered the story today. The privacy issue came up right from the beginning of the article:

“We’ve heard loud and clear there’s a growing desire for regulation for the Internet in general, and now targeting specifically,” Barrett said. “We are going about [targeting] in a very up-front, opt-out way.”

Of course, Facebook performed an about face last Friday, changing from opt-out to opt-in, which requires users to proactively request to participate in the program. It’s unlikely, however, that the move will completely repair the damage that’s been done by the backlash to the ad service, especially when the apology is immediately followed by yet another Facebook Beacon scandal.

You can never underestimate the fragile nature of your customers’ trust, and you can never stop working to continually earn it.

The reason that MySpace’s program is working, while Facebook’s generates resentment, has little to do with opt-out vs opt-in. It’s that people don’t like the program—they don’t like their purchasing info being broadcast indiscriminately.

Users ask for opt-in when they don’t want what they’re getting. When was the last time a Google ad was opt-in? When was the last time you had to opt-in to see ads on any website, for that matter? We’ve been getting targeted ads for years, whether they’re targeted to us personally or targeted to our search queries. A more targeted ad doesn’t shock the system; it makes it better.

The bottom line is that if companies are giving customers what they want and respecting that they are free individuals with independent decision-making capabilities, which way they opt becomes much less of an issue. Facebook got focused on the power of word-of-mouth, and forgot that it doesn’t work if the mouths go away.

The current fluidity with which people can define and destroy a movement, a business, or an entire economy is unprecedented. The days when a company could afford to be contemptuous of its client base are going or gone.

We have seen the future, and it is us. We are the searchers. We are the social-networking platforms. We are the advertisers, the publishers, and the consumers.

And if it is us, it is you. Put yourself in MySpace’s shoes. What would be your single overriding objective for an ad platform? What would define success and what would define failure? And how would your customers benefit?

You guys have got to check this out: Mod My Life takes actors, wires them up with headcams and audio, and gives the audience the collective right to control their behavior. Want to see someone spit on people in Times Square? If enough people vote for it, the ‘modstar’ is obliged to comply. If you want to be a part of the beta population, visit the site now.

Or perhaps you want to be the one obeying audience capriciousness, pulling pranks like hailing taxis in Manhattan and asking them to drive you to Philly. No problem; they’re also looking for more modstars—you could be the lucky lead in the next big thing to hit ‘reality TV.’

Invasion of privacy? Not really—these are actors, who theoretically should know exactly what they’re signing on for and who are getting paid for the privilege of acting like idiots. Counter to purpose and values? Remember that here at VortexDNA we have no stance whatsoever on ‘good’ or ‘bad’ values—we only look at coherence and incoherence. So if a show like this is consistent with the life focus of the cast, crew, and audience, more power to ‘em.

No, I think this is just good old American fun, coupled with a need to continually up the attention-capturing-ante in a world where little seems shocking. The superbugs have grown resistant to antibiotics, so we have to come up with something even stronger. Eventually, though, you start to wonder if increasing escalation will ever win you the war, and you start to think that maybe instead of just upping the dose we have to change our entire mindset.

I’m registered for the beta. I may watch tomorrow’s session (8 pm Eastern, if you’re wondering). But I look at the reality trend and can’t help but wonder: where does it go next?

This story is terrible!

Philip Thomson committed a crime in Nevada. He was using a fake Oregon driver’s license. The license had the name of Neerav Shah and the number of Joseph Parker. Now Shah and Parker are being sued for—wait for it—failing to protect their identities.

“Shah and Parker had a duty of care to keep their identifies (sic) from being used unlawfully and fraudulently and/or actively participating in the act of creating or allowing others to create the fake driver’s license. Shah and Parker breached that duty when their information was used to rent the Jeep,” said Parker, reading from the lawsuit.

Parker says he was stunned to find out he was named in a Nevada lawsuit. “And really I consider myself to be a victim in this as well — not one of the culprits,” he said.

He was being sued essentially for being the victim of a crime. “”Right — which this person committed against me who rented the vehicle,” he said.

“Somebody used my name and committed a crime,” said Shah. Neerav Shah has credit card receipts for the dates in question — showing he was at home in Oregon. And while the suit does not accuse him of being the driver — he feels victimized.

Lament, lament, lament. Wringing of hands.

Summary: This post is a continuation of yesterday’s discussion. My personal opinion about Facebook Beacon is that they got it wrong, principally because it violates two of the cardinal rules of privacy: relationship and control.

Yesterday, I covered some of the negative reactions Facebook got to the launch of its Beacon ad platform. Today I’ll give you my take on the matter, but first an update on the worsening backlash to FB’s perceived privacy invasion.

Yesterday, MoveOn condemned Beacon and launched, in a stunning twist of irony, a Facebook group to protest it. At of 7AM PST, the group had 2,000 members. Right now it’s 8:00PM in Cali, and the group has swelled to 8,787 members. Their movement is being covered by the New York Times, the LA Times, and CNN, among many others.

A rival group has sprung up to complain about the complainers. As of this writing, MoveOn.org and their Facebook group against Beacon need to leave Facebook has eight members. Eight.

The original protest group has a couple of dissenters as well, including a discussion board titled, ‘MoveOn is distorting the issue.’ Most of the comment thread, though, comes from people clarifying the privacy problem rather than fighting to save Facebook’s reputation. This excerpt, posted by one Simon C (and reproduced here with his permission), comes to the crux of the matter:

People share a positively astounding amount of data on Facebook, stuff I cringe to see: real names, relationships, email addresses; even postal addresses and phone numbers, for fuck’s sake. And in initiating a wide-ranging tracking program, silently and non-optionally, Facebook has taken a huge step towards building a (to me) far more comprehensive log of my personal activity than I deem acceptable, and one which is strongly linked to a lot of real-life data. Moreover, it has done so without offering me any new functionality that I value.

In creating a Facebook profile, I enter a certain amount of data on the understanding that it will be used by Facebook to target me with advertising. In exchange, I get a pretty clean, functional site that allows me to connect with old friends, and share photographs swiftly (the zombie/pirate shit can fuck right off). Beacon offers no such quid pro quo. Facebook have unilaterally decided to take ownership of my web activity, *without telling me*, and in exchange have offered me the distinctly dubious privilege of sharing my shopping habits with my “friends”. I fail to see the benefit to me here, and I strongly resent the presumption that my internet activity is free to be monitored without my consent.

Now here’s my opinion (I know you’ve been hanging out for it, and I certainly don’t want to disappoint):

Facebook’s Beacon violates two of the cardinal rules of privacy: relationship and control.

One of those rules is that privacy is a relationship. It is the relationship that governs what happens after we share any information of any kind with anyone, anywhere.

The privacy relationship is what prevents my doctor from telling you what drugs I may or may not be on.

The privacy relationship is why my lawyer won’t tell you what we discuss in the confines of his office.

The privacy relationship is why my friends won’t tell strangers my deepest darkest secrets.

The privacy relationship is why I don’t mind it when companies that receive my information use it to market back to me. This is a two-way privacy street. They’re not telling me anything I didn’t already know. If I search for ‘new cars’, and Google shows me ads of new cars, that makes sense. I shared my private info with them, they use it to enhance our interaction. This is the same thing my doctor does and the same thing my lawyer does. I share my information with them on the understanding they will use it only to benefit me.

This relationship is also why most people don’t get worked up about behavioral targeting: see David Berkowitz’ excellent piece 1984 Fan, Do You Find Facebook’s Ad Targeting Creepy? He took out an ad targeting Facebook users that had self-identified as fans of George Orwell’s book 1984 and asked them, in the ad, what they thought about being targeted by the ad. The responses are telling: most people had no objection whatsoever.

The problem with Beacon, though, is that it violates that relationship by sharing your information with other people, people you may or may not want your information shared with, in a way that doesn’t necessarily benefit you.

I share with Google: I get free search and relevant results. Facebook shares with my friends: I get questions I don’t want and a boyfriend who knows what he’s getting for Hanukkah.

The second cardinal rule that Beacon violates is control. When I share information with my doctor, I have to sign a waiver before she’s allowed to share it with anyone else. With Beacon, I have to find every person my doctor might consider sharing my info with, and tell them that I don’t want them to have it. It’s an undue burden, and it takes the data from the dominion of the users and puts it in control of organizations who don’t respect the privacy relationship (see Cardinal Rule 1).

So, yeah, I think Facebook got it wrong on this one. They can and should recover, and I hope they do, but I also hope the lessons permeate. We as users—myself included—have been inordinately permissive with the way our data gets bandied about, but we’re making it clear that some boundaries shouldn’t be crossed.

As always, I’d love to know your response, whether or not you agree with me. Privacy is about all of us, and the collective decides the norm.