It could really damage the long term viability of the __US__ tech industry dealing irreparable damage to one of the major assets of the US economy has. I would expect companies that need a strong international security reputation to begin closing up shop and moving away.

The NSA just killed the goose that lays the golden egg and not much is going change that.

I disagree that this is a problem limited to US companies. With the global nature of the tech industry, I think a product's or service's country of origin has seen a reduced importance over the years. I don't think the average consumer knows that Waze is based in Israel. I don't foresee anyone considering the NSA and choosing a Canadian designed Blackberry phone over a US designed Apple one. Instead I think this will just instill a general distrust of technology and the cloud. I doubt people will be discerning enough to focus their suspicions.

Yes and no. Example from the German government (10 Aug 2010):

"Germany's interior minister said that politicians and senior civil servants in government should avoid mobile devices such as the iPhone and the Blackberry, citing security risks and increasing hacker attacks. (...) ministers and senior civil servants have been told to rely on the German-made Simko2 gadgets, on advice from the German federal office for information security (BSI)."

http://digitaljournal.com/article/295798

I think it will cause a deinternationalization of the technology industry since each government will want it's citizens to use local tech (if you think governments can't force this look at S. Korea and IE). US companies are some of the most international, so this will hurt US companies the most and it will reduce the margins of all the big players across the board (that is, short GOOG).

Maybe corporations could go off the coast of nation states[0]… not that they will beyond the influence of them, but states may have no legal authority over them under those circumstances so they may have more freedom to be more transparent to the public because of their interests to their bottom lines.

[0]: http://www.seasteading.org/about/

Without government intervention, I don't think this news will disrupt the habits of typical consumers. They'll continue using whatever is easy or the most popular.

Corporations that have a vested interest in providing security (or the illusion thereof) may reconsider cloud-hosted solutions. But that's probably a relatively small market.

Agreed - the Netherlands is terrible, for instance. http://www.thehollandbureau.com/2010/03/07/the-netherlands-c...

I agree! This opens the door for new services based in countries like Iceland to compete in the international market. I'm surprised libertarian minded investors like Peter Thiel have not began a fund in some of these countries. Even signaling such a move would give Google, Facebook, etc. strong argument to fight off NSA's broad requests and we all win!

Funny thing Peter Thiel is a founder and key investor in Palantir which is doing big-data work for the NSA among other things: http://en.wikipedia.org/wiki/Palantir_Technologies#WikiLeaks...

I'd really enjoy hearing Thiel's perspective on this whole issue given that he is a libertarian with a strong business relationship with the NSA and a strong business relationship with facebook.

He did an interview with sarah lacy on the pandodaily and talked a bit about palantir and transparency. maybe you'll find his view there.

I wouldn't say the NSA killed the goose any more than I would say any other organizations that request warrants for user data did. What killed the goose was mass hysteria caused by a mistaken belief that Google let NSA see any user's data at the touch of a button. Poor journalism killed the golden goose.

How can you blame journalism when the nature of those data requests is such that in some cases companies (and even politicians) cannot talk about them, cannot fight them in court and they do not have to be approved by a judge?

This leaves a lot of space for speculation, how can somebody possibly know if they didn't request a bulk copy of all Facebook data? Or issue a billion seperate requests when by law nobody can talk about the count and scope of those requests. If I were a journalist, the first thing I would question is if they did exactly this, because they wrote a law that allows exactly this type of behaviour.

Because the fact that there were secret requests for user data was already known since FISA came into being in 2005. This had nearly zero effect on the cloud companies. It took the clearly ridiculous assertions of The Guardian to kill the golden goose.

> mistrust of the government has extended to this industry

I'm sorry, are we now taking the opportunity to blame big evil government for this?

The mistrust of this industry has always existed as a completely separate issue due to the utter lack of respect for privacy and privacy related laws, an attitude of which Google is one the most prominent exponents. This is a company that lobbies governments against privacy protection.

An industry that has for years tried to convince the public that surrendering your privacy to them for profit is perfectly okay has zero credibility in this matter.

You have a valid point, but you're overlooking a really crucial difference: data in the hands of a corporations means something entirely different from data in the hands of government. One of them has a monopoly on the use of force and the other doesn't. At least, that's the distinction that is important to me.

Not to mention that one is voluntary* and one isn't. Sheesh, my grandparent comment needs a healthy dose of perspective.

*I'm using voluntary here in the most straightforward sense possible. You can switch services if you'd like, or even turn off ad targeting for most services. You cannot, however, go to a an nsa.gov link and click the "Please don't track me" box.