Perhaps the most controversial of these collectors of online personal data are companies such as Klout, Peer Index and Kred that attempt to distill a person’s online presence into a single number. Everything you do and everyone that you connect with within certain social networks feeds into this number. Much as credit scores are used to predict the probability that we might default on a mortgage or our trustworthiness as an employee — these new measure of social influence are being used to select the “right” job applicants and grant VIP offers and perks to the “chosen.” The flip side, of course, is that they can also be used to exclude the “wrong” applicants and deny access to people with the “wrong” social profile.
Increasingly, the price of admission on the Web is our willingness to hand over our social profiles — try logging into certain sites without a Facebook or Twitter account, and see what happens. There’s nothing wrong with using these “social profiles” to create special offers and perks. Marketers have been doing this well before the Internet. The problems start when your personal data gets into the wrong hands and decisions are made about you without your knowledge. Personal data online is a lot easier to share and act on than an Old School credit report. We’ve all heard the stories of the applicant rejected for a job because of an unfortunate photo or posting on Facebook. What we are starting to hear now are stories, such as this April 24 piece from Wired, about how people are being rejected for jobs because of low Klout scores. They simply aren’t, well, influential enough.
Like it or not, data is the new currency that courses through the Internet. Today, there are companies, as GigaOm’s Derrick Harris writes, “turning your data into dollars”. If you think this data-collection-and-conversion practice is the exclusive practice of big companies such as Apple, Facebook and Google — you’re wrong. By some estimates, over 100 companies access certain elements of your personal data every time you open up a browser. Mobile phones store our GPS coordinates and can provide accurate footprints of where we’ve been. Think of yourself as a walking data exhaust pipes as soon as you turn on your phone or hop online.
For now, companies have had the upper hand. What are needed now are new tools and mechanisms that give power back to the user, making all of this personal data an enabling tool. A number of innovative ideas have been floated out there, everything from the World Economic Forum's concept for transforming personal data into an asset class, to creating a stock exchange for personal data, to sites making it as easy to manage your personal data as it is to manage your investment portfolio. On the regulatory front, legislators are looking into ways to protect job applicants who are asked by employers to hand over their Facebook passwords.
For younger Internet users — those who grew up with the Web and are used to broadcasting every move online to their peers — these concerns may seem overblown. However, these users may also fail to realize how easy it is for social profiling to cross the line when it comes to our civil liberties. They often assume it’s normal to walk into a store and have a random salespersons know who they are. They expect to know everything about a person before an interview or a first date. They think it’s cool that new facial recognition technologies can pick faces out of an online crowd, or that new augmented reality technologies may make it possible to create 3D social profiles on-the-fly.
Older users, for the most part, are more cautious. After all, they often have more to lose, such as retirement savings, investment portfolios, houses, cars and, yes, even their children. Their understanding of personal data and the right to privacy — a right that should not be taken lightly — was formed by a fight for rights many of us take for granted today. It will be interesting to see when — or even whether — younger users will pick up digital picket signs to fight for rights many don’t yet realize they’re giving up.
Dominic Basulto is a digital thinker at Bond Strategy and Influence (formerly called Electric Artists) in New York. Prior to Bond Strategy and Influence, he was the editor of Fortune’s Business Innovation Insider and a founding member of Corante.com, one of the Web's first blog media companies. He also shares his thoughts on innovation on the Big Think Endless Innovation blog and is working on a new book on innovation called "Endless Innovation, Most Beautiful and Most Wonderful."
Full disclosure: Washington Post Co. Chairman and chief executive Donald E. Graham is a member of Facebook's board of directors.
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