Privacy regulations: fear, loathing and AOL

My timing was off. I marketed my book on data, the Numerati, when the world economy was collapsing. I should have picked now, when the government appears to be moving to clamp down on online tracking. Looking back, I'd want to beef up the coverage of privacy in the book. But that said, one thing the book makes clear is that data privacy extends far beyond the Internet, into grocery stories, hospitals, EZ pass, cell phone networks, not to mention the cloaked world of counter-terrorisim.

I think it will be next to impossible to draw up legislation that can foster growth and creativity and business on the Internet while satisfying everyone's privacy concerns. This would be tough for an intelligent, highly informed, ethical and far-sighted group of people. I can only imagine what will come out of the U.S. Congress. In the end, I expect some crowd-pleasing gestures, a bow toward opt-in, and then pretty much the status quo. The commercial and security interests in online data are too strong for the government to clamp down too tight.

As I mentioned on a previous post, fears about online privacy create all sorts of market opportunities for companies in the business of selling or guaranteeing privacy. It's the privacy pay-off. And it occurs to me that privacy could be the solution for AOL. It could finally give the struggling service, after a lost decade, a raison d'etre.

Imagine if AOL rebranded itself as the place for privacy. The site could provide all sorts of tools for people to control their data, institute stict opt-in policies, have clear information at every juncture about the risks, the opportunities and the choices. AOL could be special. And I'm betting that other portals would hurry to catch up. This is a better strategic option than folding into Yahoo.

Yahoo could do make the same privacy play, of course. But I sense that Yahoo is still too big and unwieldy. AOL, with its legacy as a wall-garden, has a better chance.