Privacy's False Teeth and Promising Business Smile

If 2013 marked a watershed year for heightened privacy concerns, then 2014 may be the game changer. According to research by Internet and security software firm ESET, Internet privacy will emerge as the top IT security concern among businesses and Internet users in 2014. Is this the next great business opportunity online?

Last year's onslaught of news headlines concerning public and private breaches (i.e. Edward Snowden & the NSA, Target's hacking, Facebook mandating all members be public, Google's admission that Gmail is not private, and so on) is having a growing impact on all of us. How much of an impact? Consider the following:

• A June 2013 global report by ComRes revealed that almost 80 percent of respondents were concerned about their privacy online.
• A September survey by Pew Research Report showed 86 percent of Internet users taking steps to remove or mask their digital footprints.
• A November survey conducted by Harris Interactive for ESET revealed 80 percent of those polled have changed the privacy settings of their social media accounts, mostly in the last six months.
• The annual TRUSTe Privacy Index (released in January) showed 74 percent of Internet users voicing concern about their privacy and 76 percent saying they were more likely to check websites and apps for privacy certification or seals.

A small handful of companies have rushed to capitalize on this selling point. Yet this groundswell of support for online privacy has raised red flags with many of these early movers preaching privacy. Take Snapchat for example. Snapchat captured the public's imagination with a seemingly protective methodology built into its app. Since June of last year, daily snaps from the privacy-supportive service have doubled from 200 million to 400 million, topping that of the public-facing Facebook and Instagram combined. Since then however, Snapchat has endured a whirlwind of negative publicity concerning the fiction they've perpetrated―turns out the app is a not-so disappearing photo-sharing service. This revelation was followed by a security breach impacting almost 5 million users and the discovery in February that the app can make iPhones vulnerable to a denial of service attack and can cause it to crash.

WhatsApp offers a similar story. The messaging app touts itself as an ad-free, encrypted content service that does not collect names, emails, addresses or other contact information. Since August, the user base has grown by more than 100 million to somewhere between 400-500 million. At the same time, the app has encountered a laundry list of issues questioning the privacy it publicly advocates, such as clear flaws in its encryption policy, periodic scanning and uploading of users mobile address books, and the collection of the IP address of anyone who visits its website. And those concerns were before they were acquired for 19 billion by the largest data-scraping vacuum.

And then there's Path. The social network branded itself as a privacy innovator by making its app accessible only with a mobile device and by limiting users to 150 friends. Since then, Path's privacy aspirations have been riddled with misleading statements and illegal actions such as scraping data on minors (resulting in significant FTC fines and long-term probation). But the company's savvy marketing spin of its offered services has helped it grow from 2 million users in 2012 to a reported twenty million users today.

These examples show a desire of companies on the surface to cater to the public's interest in online safety countered by an underlying weakness in the integrity behind their promise. In truth, the re-emergence of privacy as an important human value is likely to cause a true re-education of us all regarding the matter. Despite their current popularity, the success of these privacy-deception companies may be short-lived.

Consumers are taking note and responding by migrating towards service providers that truly practice what they preach with privacy. Take DuckDuckGo for example. The private search engine does not track its users, personalize or filter results, or send search information to advertisers. Has this resonated with users? Most assuredly so, as seen by the company reaching 1 billion searches for the first time in 2013 and tripling its daily average of searches to almost 5 million this month. Other private search engines such as StartPage IxQuick echo these results, reporting a 75 percent increase in search traffic from the previous year. Such growth is also being seen across web browsers and social media tools that offer built-in privacy features. Add to that Princeton University's report predicting Facebook's imminent decline, and the ground is fertile for new privacy-centric social network alternatives, like Sgrouples.

The lesson here is that privacy is more than a legislative issue today. It is a marketing proposition, indeed a unique selling proposition (USP) that has real viability. As this dynamic continues to unfold, consumers will learn what companies truly offer the privacy and safety they seek. Those companies will have the opportunity to command large adoption and significant growth.

The next wave of the Internet is here and the companies and innovators with high integrity (hint: "Do No Evil" is not a trustworthy mantra), and compelling products who take the leap first will reap the greatest benefits, encounter the least competition and likely succeed at a level beyond their expectations. This new opportunity illustrates that business and social/ethical responsibility are not polar opposites but rather a powerful unified force.