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I’ve been mulling this post around in my head for quite some time now – an eight hour flight across the great Australian Desert seemed as good a time as any to finally put pen to paper (fingers to keys?) and write this post.

We’ve been hearing much lately about privacy concerns with free services – hardly a day goes by that we’re not regaled with tales of the dastardly deeds of Facebook, Magnolia, Blippy or some other service that is free-to-customers.

It seems people are carefully avoiding making the only distinction that makes any sense to me: that of paid vs free services. While I know it’s seriously uncool to question the cool kids who build applications with no idea of how monetization will occur, but I can’t resist. Yes, building an application in the cloud is cheaper/easier than in the old days. Yes, scaling an application is quick and easy. Yes, pre configured “building blocks” can be bought off the shelf.

But having said all of that – this stuff still costs money. Quite simply – an application that is scaling in terms of users or load, and that has no source of dollar, is facing a complete disconnect. Sometimes some things are either purposely or accidentally omitted in that case.

Some cases in point…

People are surprised when Google (via Buzz) or Facebook socialize information about us that we didn’t think would be socialized. Go figure? Both these services have a business model that (at least in part) is fueled by the aggregation and dissemination of bulk information about users. While particular cases can be written off as mistakes – fundamentally these guys are about making information pervasive – don’t believe that YOUR information is excluded from this aim.

Blippy, the somewhat bizarre site where people can link their purchases via credit card. Recently Blippy had a privacy issue where some people’s credit card became searchable and turned up on Google. It gives an interesting twist to the view of one of the founders of Blippy, Philip Kaplan who says:

We think that many things used to be private only because there was no way to share them

Interestingly enough in the Blippy case, recently as reported in the NY Times:

Amazon actively blocked people from linking their Amazon accounts to the Blippy site, citing security concerns. Blippy recently offered a workaround, asking users to link their Gmail accounts, so it can skim their inboxes for Amazon receipts. Amazingly, Blippy says that thousands of users took this step.

Don’t mistake – their is fundamentally a difference between a paid, and an unpaid application. There is fundamentally a difference between an application targeted for business users and one for the consumer market. Forget this differentiation at your peril.