Want to Protect Your Online Privacy? Too Late

Password giveaway
Password giveaway

Recently, word has spread that companies are beginning to ask potential employees to hand over their Facebook passwords, saying it's just another piece of the all-important background check.

Experts say that the requests may be legal. But that's not necessarily what's really worrying Internet companies.

Even if it's A-OK in the legal sphere, the publicity around the idea brings up a topic that companies like Facebook and Google (GOOG) would prefer to avoid: privacy.

In their ideal world, these companies could gather as much user data as possible without creating a backlash against their core products. But we don't live in an ideal world, do we?

Good Luck With That

Facebook has been dealing with this for years. And ironically, it's Facebook's own social network that sounds the alarm and sets off the frenzy whenever privacy issues rear their heads.

Every time the company changes its privacy settings, intrepid users blast their friends with alerts and tell them how to change their settings to protect private information.

Facebook isn't making things easier for itself. The company allows apps to ask for almost any type of information they want. For example, Zynga (ZNGA) wants access to your name, profile picture, gender, friends, and any other public information. They even want to post on my wall on my behalf. If you don't give them the rights to your information, you can't play their games. What's this world coming to?

Google has enjoyed a somewhat easier ride with privacy over the years, but it's beginning to come under attack as well.

With its reach now expanding from search to YouTube to social networks, its privacy policy update allowing its units to access information from anywhere in the Googlesphere shows how far the company is going to use your data. The backlash was just as intense as changes at Facebook generate. The message: This matters to users.

Why It Matters to Companies

The conundrum for Facebook, Google, and any other company that collects your data, is that they use information about you to target goods, services, and advertising. If you "like" Coca-Cola on Facebook, you may find a Coke Zero ad on some of the pages you visit. Scarier yet, if you follow Coca-Cola on Google+, Google can place those ads almost anywhere you go on the Internet, since the company's advertising reach is so wide.

Knowing more about you means more focused ads, and more focused ads mean more revenue for Google and Facebook. It's in their best interest to know as much about you as they can.

Sorry, the Privacy Ship Has Already Sailed

Part of the problem for consumers is how easy it is to allow our information to be taken. Ever read the iTunes agreement, Google privacy policy, or any lengthy end user licensing agreement you can just click "accept" on? Me neither.

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Consumers don't even know what they're giving up until they find out from a media report how these companies are using the information, and even then, it's hard to change anything. So when something like the recent password-request issue comes up, it makes the news for a day, maybe two, and then goes away. It's too easy for companies to keep tracking us more and more closely.

And more and more tracking is exactly what they're doing.

Do you even know what's being tracked on your computer, smartphone, or tablet right now? Google recently got in trouble for slipping some tracking code into Apple (AAPL) devices, so you probably don't. There are cookies, widgets, and other thingamabobbers that track all kinds of information about your Internet usage and feed it back to a variety of sources.

Privacy has become so complicated online that it doesn't really exist. Unless you keep information off the web, there are probably ways someone will share it.

How Mad Do You Have to Get?

The industry has been in enough hot water over this topic that it's surprising that a solution to the privacy issue hasn't been found. Maybe there's not enough outrage, or maybe we just don't care. Until we do, Facebook, Google, and other Internet companies are going to squeeze as much information out of you as they can. It's in their best interest to do so.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned. The Motley Fool owns shares of Coca-Cola, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Coca-Cola, Apple, and Google, as well as creating a bull call spread position on Apple.

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