The Upcoming Privacy Backlash (and Why that's Good for Advertising)

Google Voice transcripts showing up in Google search results? That was nothing. The real privacy brouhaha will come as search engines start to crawl and index user status updates on Facebook.

Having muscled-up on the steroid of (the illusion of) privacy, Facebook would appear to be thinking of positioning to move onto the open Web. But Facebook can't flip a switch and make all updates of all users accessible. (If it does, it will violate its privacy policy, spark suits, draw ire from consumer protection authorities.) No, there will have to be some sort of opt-in, or maybe a scheme that over time effectively requires users to opt out from exposing their updates to indexing.

In the process, Facebook will end up relatively more open than it is now. Ultimately, however, Facebook cannot fully participate in the open web because it will remain committed to advertising. And why not? Facebook has the potential to profit from advertising the way Google now does. Acceding to its users' squeamishness will also be the right choice, because Facebook has promised its users that "we give you control of your information." Those users already accept, without irony, the intruders who pay to get in. By protesting against erosion of their perception of control, Facebook users will in effect be saying, "keep the ads coming."

A real-time Web, fully indexed to facilitate access to the breaking posts and communication of hundreds of millions of Twitterers, Foursquare travelers, and other social networkers will, over time, devastate advertising.

It's not just about mapping traffic, "snow conditions at your favorite ski resort," or news cycles; real-time, fully accessible reporting from hundreds of millions of consumers means elimination of the information inefficiencies that made advertising of modest social utility in the first place. People will have access to candid information, actual experience, and trusted opinion concerning every product or service for sale. Once advertising no longer relates to sales, it will end.

This crowdsourced destruction of advertising will make what Craig's list did to newspaper classifieds look, not like the warm up act, but like the crew setting up the drum kit, the amps and the mikes an hour before the sound check for the warm up act.