Why the Trust Factor Will Inhibit Web 2.0

Over on Techmeme today there's two news items that might not seem interconnected, but they are. The first, from Larry Dignan, asks whether we can trust Google with our data. The second talks about a mobile version of Netvibes, which you can dabble with here.

Web 2.0 is a wonderful thing. It's allowing a 1,000 flowers to bloom all on $200 Linux servers. However, consumers are always wary about who to trust. My feeling is that when it comes to critical "high risk" data, they will trust the big players - Google, Yahoo, Microsoft, etc. When it comes to lower risk information, like say an email address, they'll trust a startup. There in lies the rub. Over time as the web gets more sophisticated, this could inhibit the growth of startups that are dealing with critical data.

Now back to Netvibes. I love the site. It's awesome. However, they've had some serious security issues. Also, the company is based in France. I have no idea what the privacy laws are there. For all I know they could be more strict or they could be more loose. So I am certainly willing to trust Netvibes with my feeds. There's little risk there. However, I don't use their Gmail module because, well, that's high risk information I don't want getting into someone else's hands.

There are places, however, that I happily trust with my Gmail login and password. One is the New York Times. Like Netvibes, they also have a Gmail module on the My New York Times web site. They've also been online over 10 years and have a terrific pedigree. So there's no issue with trust here  for many.

So, until Netvibes is acquired by a larger player, they can't earn enough of my trust for me to give them the keys to what's most valuable for me. So, their ultimate utility hits a wall with me and I bet it does for lots of others. That opens the door to be more loyal to other sites, which I certainly am.

Google is hardly exempt either. This morning I went to store some photos on Picassa Web Albums and discovered that the RSS feeds are out in the open even if you create an unlisted album. They're hard to find, but they're out there on the Web. That dinged my trust in them, much as the issues they had with Blogger and RSS feeds when it relaunched. This has since been fixed.

Net, as the value of the data we have rises, so does the level of trust we need to give it to someone to hold. That, over time, will limit startups and it bodes well for the big players who are launching rich Internet applications. That's why social networks, video sharing sites and other communities grow like weeds. There's not a lot to lose and why sites like Box.net and Zoho (both of which I also love and where the risk are greater) will suffer until they align with big players. The trust factor will hold them down.

Comments

[noah kagan]

What do you recommend as the best way for a younger company to gain trust or a perception of high security?

[Steve Rubel]

Align with big dudes or use third parties that people trust to host the data - like Amazon S3.

[Ned Flanders]

I agree 100% with Steve. Netvibes is small potatos. And after what happenned with them just recently, I would never trust them with my personal data, passwords, etc. I also think there would be a better chance of me trusting them if they were an American company.

[Staska]

"So, until Netvibes is acquired by a larger player, they can't earn enough of my trust ..... company is based in France. I have no idea what the privacy laws are there..."

Well, that is certainly valid point of view from the U.S. But although the biggest single language Internet market, U.S. share of internet users dropped below 50% somewhere at the beginning of millennium.

Netvibes has the native language versions for about 50 countries. With local feeds and customizations to boot.

So, if I live in Kosovo, Bulgaria, Lithuania, Germany, U.K., Turkey, Russia, Ukraine, Argentina or Iran (and I live in Lithuania), I would trust Netvibes with my information before I trust most American companies, probably except Google ( Google and Microsoft being the only American companies with similar level of native language customization).

Also, if we talk about the average Internet user, do you really think that many of them consider security issues the way you do? In my opinion this kind of thinking is way above the average Joe.

And weren't Amazon, Yahoo, AOL, Google, Ebay and Netflix small fish once? Shouldn't have the users trusted Walmart, Barnes&Noble, AT&T, Christies, Blockbuster, Compuserve and Prodigy over these small upstarts with their critical personal and financial data?

[SFGary]

I am not sure I follow your logic. Why does "bigness" earn trust? In my case I fear and distrust bigness. Outside the world of software and hardware I absolutely distrust large banks, oil companies and countless other entities whose sole aim in existence, it seems, is to extract every possible penny from my pocket. And they sometimes lose valuable information and all they can say is oops.

There has to be a system by which smaller companies can develop trust with its customer base.

[Deepak]

I am with Statska and SFGary. The logic is flawed. Why should an American company be more trustworthy? And by making "bigness" a trust builder, aren't we playing the big corporation (whom I don't necessarily trust either) game again?

[Steve Rubel]

Let's not make this about American vs. offshore. It could be the BBC or Le Monde and I would trust their data. What I am saying is that it's about unproven vs. proven when it comes to valuable data.

[Jeremy Sisson]

The company I work for has a strict policy that data can't be stored offsite. With the recent (re)launch of the Google office apps, a few of us were interested in using them, but we cannot.

Smaller companies without such a policy may be able to use these apps, but how can Google compete with Microsoft in companies with policies like these?

[Tegan]

I think (hope) we may see the emergence of a kind of "reputation economy" - along the lines of Cory Doctorow's 'whuffie'. When there's a standard way of indicating positive or negative responses to a person, organization, place, idea, event, etc, there will be a real incentive to do what boosts your score, as consumers and funders will find reputation to be a huge differentiator among multiple, otherwise interchangeable providers.

[Sanford]

Steve - couple of thoughts:

Netvibes has a much stricter set of privacy rules to follow with the DPA (Data Protection Act) that has a number of legal penalties associated with breeching the DPA. In the US, we have COPPA, but very little in ways of penalizing breech of pricacy or data security (as seen in the many data breeches with regard to credit card information in the past few years). I am much more comfortable with DPA/Netvibes than I am with many of the sites here in the US.

As for trusting google - the interested fact is that google is subject to the whims of the market and the strictures of the legal system. Since google's major advantage (IMHO) is the trust people have with regard to google.

Consider the number of people who have installed (or have the apps included):

• google Toolbar
• google Desktop App
• google Analytics
• google Checkout
• google AdSense
• google Docs
• Picassa
• Blogger
• etcetera...

Everyone of these applications have a direct connection to the revenue machine that google is driven by. Personalized Search was not a product developed because of customer need, rather it is a feature of google's own archive that has been "opened" to the public.

google did what every other company in the Web 1.0 era claimed to do - developed the data services that allow it target advertising (see this post) - to understand "the mind of G-d", or in other words: YOU. And, by doing so, google has funded the basic research that continues to drive its success in service offerings (much like Xerox did back in the days of Xerox Parc). While it has yet to have a runaway hit in a while, the number of people using these apps - no matter which ones you use - hits almost everyone on the web, at one time or another.

Do you trust google? I do - since, every time I choose to use a google service, I recognize the trade off between the "free" aspect of the service and the value that google has by understanding me better. I remember (and still think it happens) when you would install the google Toolbar (if it was not already there) and the installation/configuration app would request if you wanted "advanced" features which would send information back to google. Even with Personalized Search, google gives you the "option" of turning it "on" or "off". While this distinction may be in terms of whether or not google will map aggregated data with a particular google Account or not, the fact that google offers the choice gives me, as a consumer, the comfort of choice. As I mentioned in another post, it is in google's DNA.

As for privacy - this is becoming an outdated construct, since (on the Web) everything I do, I say, I visit - are data points to be collected and evaluated. google's Archives remembers everything - and if not, there is Yahoo!, AltaVista, Internet Archive, etcetera. This is not a surprising statement anymore, it was when we had complaints about DoubleClick purchasing the customer data aggregation company. Back when people were concerned with Neilsen recording my every move on the television, now my TiVo tracks my viewing actions and recommends shows that I would never have thought to look at. Privacy is a trust relationship - with the vendor, the brand, and the idea. Violation of that trust - that will be the death of companies in this connected world.

[Daniel R]

- EU Countries usually have super strict policy on data privacy for corporations, where as governments have had far wider powers to do surveillance on the public (even pre 9/11). The US (until perhaps recently) has been the opposite.

- I generally trust larger *Well-Known* companies with my privacy because any potential abuse and mis-use by the company will result in bad PR and potential government action. Small companies committing data abuse dont generally get as much media coverage.

- The issue of privacy is already half-over. People complain about Google, but my credit card companies and banks can construct a great profile of who I am by what I buy and where I am. Where is the outcry on that? Amazon knows even more (assuming one is a frequent customer).

- Bigger issue for me is the buying, selling and sharing of one's data. What I think people should look closely at is when say an Amazon-sized company sells their data to Company B, which combines it with data from Company C - to form an ever increasingly broad and deep database of people.

Personally, I think Sanford nails it at the last paragraph:

"As for privacy - this is becoming an outdated construct, since (on the Web) everything I do, I say, I visit - are data points to be collected and evaluated."

"Privacy is a trust relationship - with the vendor, the brand, and the idea. Violation of that trust - that will be the death of companies in this connected world."