Searching for Privacy Online

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Apparently, some AOL subscribers have gone from searching the Internet to searching for revenge. Three of the folks whose search data was leaked onto the Web by Time Warner's (NYSE: TWX) AOL unit are suing the company for the blunder.

According to several news agencies, three AOL subscribers who were among the 650,000 affected by the lapse are suing under privacy laws and are also seeking to force the company to stop retaining search data. The suit seeks class action status as well.

To AOL's credit, it has taken several steps in the wake of the scandal. We know it apologized, but of course, talk is cheap. Two employees were fired, and AOL's chief technology officer resigned his position. The company has also promised that it will fill a brand-new position: chief privacy officer.

I can't really comment on how far such a lawsuit might go, but it does underline the significance of AOL's blunder. I've long thought that privacy concerns were of major importance -- and risk -- to all the companies that want to provide Internet users with search services, including Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), IAC/InteractiveCorp's (Nasdaq: IACI) Ask.com, and Microsoft (Nasdaq: MSFT). The concept of storing up users' search data -- and subsequent privacy concerns -- was underlined when Google fought against a U.S. government subpoena for search data.

There are already services cropping up that help Internet users cloak their identities or cover their tracks online. Consider the add-on, for-pay online identity protection service Anonymizer, as well as a Firefox-based browser called Torpark that is designed to provide anonymous surfing. After I wrote about AOL's privacy gaffe in August, I received emails from two search players that are taking a stand on privacy, Vivisimo's Clusty and Ixquick.com. (Ixquick.com said that it takes a simple stand: Data that isn't stored can't be breached.)

Although more cynical people say that only those who have something to hide would feel the need to cloak their actions, I disagree. I think that with more attention directed toward search privacy (or lack thereof), more and more people might be tempted to use such software and services simply to preserve their privacy in an online world that is increasingly less private.

After all, the buzz that accompanied the original coverage of the privacy breach at AOL also highlighted the fact that even innocent search queries might easily (and incorrectly) point fingers of blame at users. A good -- and probably fairly common -- example might be if you're an author who writes murder mysteries, searching for information on your trade might look more than a bit suspicious when it comes to search terms you've plugged into a search engine.

The lawsuit against AOL may very well have ramifications that surpass AOL's own search services and policies. There's good reason to suppose that as Internet users become more concerned about their data being stored, more companies will enter the field with new solutions that offer them the privacy they desire.

Time Warner is a Motley Fool Stock Advisor pick, as is Yahoo! Take the newsletter for a30-day free spin.

Microsoft is a Motley Fool Inside Value recommendation.

Alyce Lomax does not own shares of any of the companies mentioned.

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