In the keynote speech at yesterday's Geoloco conference on the future of geo-location services, venture capitalist Fred Wilson said businesses could profit from privacy, ReadWriteWeb reports:
"When you reveal your specific location, it's very important that you have control over that... There are business opportunities in privacy-related services," Wilson says. "The challenge is to get someone [whether business or consumer] to pay $2-$10 dollars per month to ensure that sort of premium privacy."
Large social networks would have trouble revoking the fine-tuned privacy controls users are used to, said Wilson, whose firm Union Square Ventures is invested in Twitter, del.icio.us, Etsy, and Disqus. But that's not a concern for startups which can start with a pay-for-privacy model.
Econsultancy's Patricio Robles points out that there is almost no acceptable way for a large social network to undo such controls. Users would see such a request as being closer to extortion than a reasonable shift in a business model, she argues.
But while it may be impossible for large social networks to profit from privacy, could startups? For better or worse, users are hypocritical about their privacy concerns: Facebook just got its 500 millionth user despite having a lower consumer satisfaction score than the IRS and despite repeated findings that even young people want more privacy. Why? Part of it surely has to do with scale: alternatives exist, but none has nearly as many of your friends signed up.