The NYT has a good summary of the go-round on Google's privacy issues - I say issues and not problem, because privacy only concerns the management of identity, rather than any substantiative question. Again, I think the problem concerns as much the management of public face, and the ability to control our appearance to other people in terms of discrete public, private and work spheres. Indeed, this is the issue raised by Cory Doctorow in his description of "boyd's law" of social networking - "Adding more users to a social network increases the probability that it will put you in an awkward social circumstance" (and thus make it less popular, etc.). The furor over 'privacy' (as in that raised over Facebook Beacon) concerns more so the convergence of different social networks into one. I think that the temporal and technological links between the rise of technology convergence and increased privacy issues with the internet is telling: all we really want is the freedom to act like fools in different social situations, and to not have to keep looking like a fool in others.
Duncan
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