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In early June 2013, The Washington Post published a confirmed report that the U.S. National Security Administration (NSA) had wiretapped “the central servers of nine leading U.S. Internet companies, extracting audio and video chats, photographs, e-mails, documents, and connection logs.” The ultimate fallout and massive implications of this news really are beyond the scope of this textbook—with the exception of the remarkable marketing implications for those nine leading Internet companies.

facebookThe news was particularly uncomfortable for Microsoft, which literally weeks earlier had launched its latest campaign, promising that users’ privacy was its top priority. Whereas Microsoft (along with AOL, Skype, YouTube, Google, Apple, Yahoo, Facebook, and PalTalk) has denied that it had any involvement in the top-secret wiretapping program, the investigation indicates that its records have been collected by the NSA since 2007.

It becomes difficult to promise privacy and safety to users when vast media reports, confirmed by official sources, indicate that the companies actually cannot do much if the government decides it wants information about those very same users. Microsoft faces a difficult choice: pull its privacy campaign quickly, or keep running it while suggesting that is was just as much a victim as its users?

The latter option is especially unappealing to advanced technology companies such as the nine listed. Their images and reputations largely rest on the notion that they are ahead of the curve—more tech-savvy, sophisticated, and nimble than any other actor in the market. If government, which is generally known for being bureaucratic and slow moving, can outwit the geniuses at the tech firms, what do those firms really have to offer anyway?

Source: Simon Dumenco, “Microsoft: ‘Your Privacy Is Our Priority.’ NSA: ‘LOL!’,” Advertising Age, June 7, 2013