Did Obama Just Destroy the U.S. Internet Industry?

"With the latest revelations just days – in some cases, hours – old, it’s too soon to know for sure."

I think it's still too early and I'd wait until all the facts are out. I can't speak for how people in other countries are feeling, but I can say this...

As an American startup founder, I'd be very worried about what my international customers would think if they knew I was working secretly with the U.S. government, publicly denying it, subsequently being caught in my own misleading statements, and allowing the government access to all of their data after I told them it was private. As a customer, I'm happy if you can use that data to serve better ads that are relevant to me. But I would be very angry if it was being served to a foreign government which wants to profile me a certain way, potentially to justify killing or detaining me.

The leading US internet companies are all built on a foundation of trust. Undermining that trust counterbalances the convenience of their services and over time new competitors without these trust problems are only a click away.

No, the worst thing that Google,[1] can do is share that information with credit card companies, HR departments, health insurance companies, etc, who do have the power to ruin your life and are much more likely to do it than the government.

What happens when the advertising money hits the wall and can't support revenue growth sufficient to keep the Wall Street analysts happy? At some point some MBA is going to figure out that HR departments would love to be notified about e.g. their employees joining say a cancer support page. It sounds inconceivable today, but I bet people who started using credit cards in the 1960's and 1970's never expected that one day the various credit organizations would band together and sell your information to literally everyone, so that you could be denied a job because of your credit history.

I think it's important to keep some perspective, and I feel like people on HN aren't doing that here when they direct all their blame to the government over this issue and hold Google, Facebook, etc, who created this surveillance apparatus, blameless. Corporate America is much more likely to screw you over than the government. They have a profit motive to do so, and can get away with screwing you over on a mass scale in a way the government cannot. I don't know a single person who has been screwed over by the government. I do know people who have been screwed over by credit ratings agencies, having job offers revoked because they struggled financially in college.

Maybe it's not inevitable or even very likely that Google and Facebook will sell your information to the highest bidder. But it's a failure of imagination not to pretend that it isn't possible, and if we're going to engage in slippery slope reasoning with respect to the NSA, let's be intellectually honest and admit that we've built a vast surveillance apparatus in both the public and the private sector, and there are numerous entities within both sectors who have the ability and perhaps the motive to use that information to hurt you.

[1] Or Facebook or whatever. It doesn't matter. One day these companies will become mature and will be headed by some MBA who has never written a line of code...

If you think that those involved were not prepared for the eventually of a leak, you'd be very naive. The fact that all of these companies have been sitting on boilerplate denial statements speaks volumes. Contingency plans have been put in place for this eventuality and the people making these plans are experts at dealing with these situations.

My guess is that the gameplan for the US government will be to stay silent and wait for general apathy to sink back in. Tomorrow is WWDC and, with the latest Apple news, the tech community rally will likely fall to 2-3 page in a week or so and then disappear altogether. Once that happens, the difficulty moving to alternate services (as per the other HN poll) will shadow everything, and the company bottom lines will be unaffected.

Add to that, if you believe that the US government and institutions are the only ones doing this, that would be even more naive. The Mossad, SIS, CSIS, KGB etc. are likely implementing very similar policies and procedures, if not directly involved with PRISM (or whatever it is actually called) and the outsourcing companies providing it. The likelihood of finding other territorial based services with capability, scale in an area not under surveillance is probably close to impossible.

The Arab Spring was a wake-up call to all governments/multi-nationals that these tools are power in the hands of the general public and steps were taken to mitigate and reduce this effectiveness.

It's depressing. I wish it were otherwise. I wish the companies involved actually had the ability to push back or outright deny involvement in these types of actions, but I suspect their hands were tied.

Silicon Valley is entrenched. We like to think that it is still our playground but we should know better. My only hope is that this time we learn and that brighter people than I figure out what we can do about it.