It may be time to start treating the entire web as one interconnected data collection form. Innocuous information you share online can be used to deduce your movie rental habits, political affiliation, and even your social security number.

Consider this:

•    Netflix inadvertently revealed the identities of some of their subscribers even though they removed personally identifying information from their publically available database. Two University of Texas researchers were able to match Netflix subscribers’ to their reviews of vulnerable movies on sites like IMDB.

•    Another discovery out of the University of Texas, this time involving an assistant professor and his student, was that peoples’ political affiliations can be inferred from social networks. Group membership, music preference, and friendship connections were particularly indicative of political affiliation. The dataset for this experiment was 167,000 online profiles and 3 million ‘friends’ in the Dallas-Fort Worth area.

•    Even those who are unconcerned that others can see their movie rental records, or know their political persuasion, would be upset if their social security numbers were uncovered. Another duo of researchers, in this case from Carnegie Mellon University, were able to destabilize the Social Security numbers of 8.5% of US citizens born from 1989 to 2003 based on publically available data including social network profiles.

As Maneesha Mithal of the Federal Trade Commission’s privacy division stated in The New York Times, “Technology has rendered the conventional definition of personally identifiable information obsolete…You can find out who an individual is without it.”

So do we need to protect the next generation of Internet contributors, those born since 1995 referred to as Gen Z? In The New World of Wireless: How to Compete in the 4G Revolution Scott Snyder writes that Gen Z are the most likely generation to accept reduced privacy in order to participate in the “immersive, ‘user-centric’ wireless experiences” delivered by 4G mobiles. Encouragingly, this generation is demonstrating an ability to engage and minimize their public exposure. Regulatory body Ofcom’s media literacy audit found that a full quarter of 8-12 year old UK citizens have social networking profiles on Facebook, MySpace, or Bebo. A vast majority of this active quarter, 83%, have set their privacy settings to only allow their friends to see their profiles.

I think Gen Z will be just fine; we don’t need to instill a mistrust of academics that travel in twos or teach them about the interrelated nature of the Internet. Let’s concentrate on ourselves and realize that by placing our first name on one site and our last name on another site we’re effectively placing our full name in the same place.

When Google rolled out Buzz in mid-February, people were angered by the type of privacy breaches which have plagued another social medium. The three main issues for Buzz were:

• auto generation of follower lists from individuals’ private email and chat behavior
• auto completion of some email addresses in a feature similar to Twitter’s @reply
• auto connection to Google Reader and Picasa Web Albums.

Google responded to privacy concerns within days. However, for some who had very real privacy concerns, this simply wasn’t good enough.

I use my private Gmail account to email my boyfriend and my mother.

There’s a BIG drop-off between them and my other “most frequent” contacts.

You know who my third most frequent contact is?

My abusive ex-husband.

Which is why it’s SO EXCITING, Google, that you AUTOMATICALLY allowed all my most frequent contacts access to my Reader, including all the comments I’ve made on Reader items, usually shared with my boyfriend, who I had NO REASON to hide my current location or workplace from, and never did.

There’s still a lot to learn about how we integrate privacy into new products, but we know the golden rule – personal information should never be published without personal consent.

Update: US Congressmen have asked the Federal Trade Commission to examine complaints about Google Buzz.

I had the privilege this week of attending a lecture by Professor Hal Varian, Chief Economist for Google. Varian discussed the advent of computer-mediated transactions and how they transform our business practices.

There were a couple of interesting points he raised: historical (in a pre-literate and pre-numerate era, how could people shipping barrels of olive oil have any confidence that the amount of oil that left was the same amount that arrived?), logistical (computer-mediated transactions enable more and more complex contractual arrangements), and conceptual (behavioral targeting, etc.).

This last, conceptual, is a big thing for Google these days, since they’ve been in the behavioral targeting business for all of two weeks. It’s also where Varian started to get into Web Genome Project territory. I found one thing he said particularly interesting:

In general, people have no problems with the intended use of data (more relevant content, etc.). What people are worried about is the unintended use of data (AOL’s massive data spill, etc.). The problem, therefore, is not so much a privacy problem, but rather a security problem.

That’s a pretty interesting comment, and it certainly rings true to me. “I don’t want Google knowing all this stuff about me,” people say. “Who knows what they’re going to do with it? What if somebody unscrupulous gets their hands on it?”

The core proposition of the Web Genome Project is personalisation with privacy. In light of Varian’s comments, however, it’s worth revisiting that proposition, because in fact it’s much stronger than that. The WGP model means that no clickstream or historical data is ever collected in the first place. If a thief were to break in, the vault would be empty; there’s just nothing there. So the model actually eliminates the entire question of privacy. It doesn’t much matter whether I can keep your data private if I don’t have any data on you to begin with.

Gratifying stuff from someone who’s earned his stripes. What are your thoughts about privacy vs. security?

Google has long been a staunch advocate for net neutrality: the idea that Internet service providers should not be able to adjust transmission speeds according to the type of content being transmitted. This stance is certainly logical: adjusting speed for bandwidth-hogging content could certainly affect some of Google’s properties, like YouTube.

So you can understand why there was a bit of finger-pointing this week — specifically, by the Wall Street Journal — when it seemed Google was trying to get a ‘fast track’ for itself by partnering with ISPs to co-locate servers directly within their facilities. The article’s authors, Vishesh Kumar and Christopher Rhoads, made it clear from their tone what they thought of the plan:

Google’s proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google’s service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.

Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google’s move, if successful, would give it an advantage available to very few.

Understandably, Google immediately came back on its Public Policy blog, calling the WSJ piece “hyperbolic” and “confused”. Richard Whitt, who made the post on behalf of Google, also says he doesn’t remember making a comment attributed to him by the Journal, and refers to several others quoted in the original article who had objections to it.

Net neutrality says that the highway can’t dictate which cars get to go which speeds. If you drive a Hyundai, you have the same opportunity to hang out in the fast lane as someone who drives a Porsche. At the same time, the highway also can’t dictate where you live — and, by extension, where you get on or off the highway. So if you choose to live one exit away from your work, you’re going to get there faster than someone who lives ten exits away, no matter what kind of cars you both drive.

Based on my admittedly limited understanding, it appears that Google’s proposal falls more into the second situation than the first. That is, Google appears to be trying to put the physical source of content as close as possible to its physical destination, so this is not an issue of net neutrality.

At the same time, most websites don’t have the resources to even begin to optimize for this problem. You don’t spend your time moving your servers in with your ISPs until you have a big enough setup and a big enough audience and — let’s be honest — a big enough bank account to make it worthwhile. Even though the option is theoretically available to anyone, practically it’s only available to a small few.

So a violation of net neutrality? Perhaps not. But it’s not necessarily a bad thing that people are jumpy when it comes to Google.

Google is great because it helps us access the greatness that is the Internet. If the Internet were only Google, I don’t think it would be so great. What do you think?

I have to confess an addiction to the presidential campaign. I follow it obsessively, every twist, every turn, every gaffe, every SNL skit. I am in awe of the sums of money being raised and spent.

But despite all the campaign spin and rhetoric, and even with the bailout story reaching fever pitch, we all know that the true balance of power lies elsewhere: in the halls of little company based out of Mountain View, California.

Think about it. 144.7 million Americans used Google last month — more than the number of people who voted in the 2004 Presidential election. The company has just under 20,000 people on the payroll, more than triple the number employed by the White House. Thousands upon thousands thrive in the Google economic ecosystem. 300 million shares? 300 million Americans? coincidence? I think not.

They’ve got an environmental policy. They’ve got a Chief Economist. They’ve got a market cap roughly equal to the entire GDP of New Zealand.

What they do, matters.

The only bummer about this situation is that, even though the Big G has as much or more of an impact on our daily lives as the guy in Washington, we still can’t vote for its President. Well, we can, but let us face the matter squarely: thanks to Google’s dual-class share structure, our votes won’t make any difference.

Then again, we probably shouldn’t vote. Our democratic process has led us to meltdowns on Wall Street; Google’s benevolent dictatorship has produced the fastest growing company in history. In the past year alone, they’ve added thousands of new jobs and stepped up their sustainability efforts. No, it’s probably best that we surrender to the wiser governance of Schmidt, Page and Brin.

Sure, every now and then they’ll get it wrong. United Airlines will lose 76% of its market cap because Google News mixed up its dates. Some poor guy who hits the lottery with an all-Google business model will learn that he shouldn’t sink a foundation in shifting sands. Sergey Brin will be forced to admit that censorship ain’t cool.

For the most part, however, Google treats its citizens (that is to say, all of us) well. It’s certainly had a greater impact on our efficiency than anyone in the White House ever did, except maybe that guy who invented the Internet itself. On the other hand, a lot of that efficiency is wiped out by the productivity drains from YouTube, so maybe the company’s contribution is a net wash.

In closing, when you’re thinking about your choices this election year and feeling the pressure to choose the perfect candidate, be grateful. The decisions that matter most have already been made. The triumvirate in charge isn’t going anywhere. And if our nation were run as well as that little company based out of Mountain View, we’d probably be in a lot better shape right now.

Earlier this week, the LA Times ran an interview with Google’s Marissa Mayer on the momentousness of the company’s tenth birthday and where the big G is headed. Here’s what she had to say about where they’re headed in the next ten years.

I think there will be a continued focus on innovation, particularly in search. Search is an unsolved problem. We have a good 90 to 95% of the solution, but there is a lot to go in the remaining 10%. How do we monetize new forms of content as they come online such as video, maps and books. How do we help content providers transition their businesses online and build healthy businesses.

Mayer later clarified the comment:

We?re all familiar with 80-20 problems, where the last 20% of the solution is 80% of the work. Search is a 90-10 problem. Today, we have a 90% solution: I could answer all of my unanswered Saturday questions, not ideally or easily, but I could get it done with today?s search tool. (If you?re curious, the answers are below.) However, that remaining 10% of the problem really represents 90% (in fact, more than 90%) of the work. Coming up with elegant, fitting and relevant solutions to meet the challenges of mobility, modes, media, personalization, location, socialization, and language will take decades. Search is a science that will develop and advance over hundreds of years. Think of it like biology and physics in the 1500s or 1600s: it?s a new science where we make big and exciting breakthroughs all the time. However, it could be a hundred years or more before we have microscopes and an understanding of the proverbial molecules and atoms of search. Just like biology and physics several hundred years ago, the biggest advances are yet to come. That?s what makes the field of Internet search so exciting.

This description makes me think that we’re using the wrong metaphor. “Search” is not a single problem to be solved, any more than biology or physics is a single problem. It is an evolving field of study, deeply integrated with and dependent on the behavior of evolving human beings.

In cycling, we say you can never beat a mountain, only yourself. The mountain is there, immovable and immutable; it doesn’t care how fast you ascend it. All you can do is try to climb it faster than you did the last time.

I believe search is like that. How will we ever be able to say it’s solved? Surely it will ALWAYS be improvable, challenging, and changing. It’s like saying, “The marriage has been 90 to 95 percent solved.”

When asked which new initiative is most promising in terms of another source of revenue, Mayer responded:

We will certainly remain centered on ads. We are also looking at new ways to deploy ads: YouTube advertising for a better way to monetize video content, scanning content with book search for advertising that monetizes better. We are also exploring paid services, such as paying for Picasa storage or additional storage in Gmail. These are small businesses that are just getting started and this is a new business model for us. But it is one thing we are experimenting with.

Right now, there are a lot of companies out there that are hoping to stumble on a way to monetize their big ideas, and it may comfort them to know that Google has the same hope. It will be great when Google (or somebody) comes up with a better way to monetize video content. I’m surprised to hear her talk about paid storage as a future source of revenue, given that $0.00 is the future of business.

Monetization is a problem that is textads% solved, but the remaining videostorageandsocialnetworking% will take decades.

I really admire Mayer for what she’s accomplished, and, although I sometimes take Google to task on this blog, I really admire Google as well. That doesn’t mean the company’s perfect, and they clearly don’t have all the answers — which will guarantee that the second ten years will be as fascinating as the first.

Where do you see Google going over the next decade?

Hat tip: ZDNet