Comments made by venture capitalist Fred Wilson at the Geoloco conference in San Francisco this week  have prompted a debate about the future of privacy as social networking becomes ever more entrenched in everyday life.

The firms that are best suited to give consumers what they want in terms of settings, controls, etc, are the start ups that haven't begun operating yet, he said. Then Wilson dropped an eye-brow raising proposition: these companies would also be well-positioned to target consumers that are willing to pay a premium for additional privacy safeguards.

"When you reveal your specific location, it's very important that you have control over that… There are business opportunities in privacy-related services," he said. "The challenge is to get someone [whether business or consumer] to pay $2-$10 dollars per month to ensure that sort of premium privacy." (via eConsultancy).  Patricio Robles with eConsultancy has her doubts about the 'premium privacy' proposition. "Telling users they can pay you to not use the information they share under terms different from the ones you set when they provided it is, in my opinion, more likely to be perceived as extortion than it is to be perceived as a legitimate business model."

No Real Protection

In truth, though, consumers have very little privacy protection over data even when explicit promises are made. A company can merely - as Facebook has done - reverse its privacy policy with adequate notice to comply with the law. In the case of a bankruptcy, even a firm with the purest of intentions towards its customers' data may find it forced to sell it by a bankruptcy court or trustee looking to monetize its assets for creditors.

Such realities may further a trend that is beginning to emerge - consumers recognizing the value of their data and gravitating towards firms that reward them for sharing it.