Bloomberg News

South by Southwest Over-Sharers Ponder Privacy in Snowden Wake

March 07, 2014

Eric Schmidt

Eric Schmidt, executive chairman of Google Inc., speaks during the South By Southwest (SXSW) Interactive Festival in Austin on March 7, 2014. Photographer: David Paul Morris/Bloomberg

The South by Southwest Interactive conference has gone mainstream by celebrating social tools like Twitter Inc. (TWTR:US) that thrive on personal data posted online. This year’s event will explore the privacy implications of all that sharing.

With more than 30,000 attendees gathering today for the four-day forum in Austin, Texas, speakers and panels will reconsider their role in protecting shared data after years of encouraging customers to put more of their life on the Web.

Hugh Forrest, the symposium’s director, said the focus on security and privacy follows last year’s revelations of online spying by the U.S. National Security Agency in documents leaked by former government contractor Edward Snowden, who will speak at South by Southwest via video on the conference’s last day. The disclosures have stirred debate over the industry’s role in safeguarding nonpublic information, Forrest said.

“We understand more and more the costs of that growth and how much of our data is no longer in our control,” Forrest said. “It’s not as happy and cheery, but it’s important.”

This year’s theme is adding a more serious tone to a conference known for music, film and emerging technology. Discussions about privacy are no longer limited to hackers, security researchers and technology executives, as risks grow for individuals and businesses, according to Robert Chesney, a law professor at the University of Texas in Austin who will speak on a panel about privacy.

Privacy Issues

“It was in vogue for a while for people to say that the up-and-coming generation doesn’t care about privacy,” Chesney said. “It’s clear now that was at best overstated, and probably reflected a failure to appreciate the real implications of what moving to a world of digitized information means.”

According to the NSA documents leaked by Snowden to newspapers including the Guardian and Washington Post, the agency has gathered information held by Internet companies such as Google Inc., Facebook Inc. (FB:US) and Yahoo! Inc. (YHOO:US)

Those companies pioneered the use of tools to track online activities, in order to tailor advertisements to their users. People have proved willing to trade free online services like e-mail and Internet search for personal information, and companies aren’t likely to make major changes in how they operate, said Joseph Galarneau, chief executive officer of Mezzobit Inc. and founder of DataNeutrality.org, an advocate for greater transparency surrounding data collection.

“The lure of convenience and free stuff is strong, and even those folks who understand the privacy implications will plow forward,” said Galarneau, who will be speaking at South by Southwest. “It’s like eating at a tasty restaurant that you know has sanitation problems in the kitchen.”

Party On

While the conference will include panels that focus on encryption tools to keep out government snoops and talks by Wikileaks founder Julian Assange, the party will continue. Rapper Snoop Dogg is performing at a party hosted by EBay Inc.’s PayPal, and entrepreneurs and companies will be meeting at restaurants, bars and parties across Austin looking to strike deals.

Started in 1994 as an offshoot of an annual music-industry conference, South by Southwest Interactive has grown to become one of the year’s main technology gatherings for up-and-coming companies, especially those making smartphone and social-media applications. Twitter was a hit in 2007 with attendees who posted short status updates. Location-sharing service FourSquare Inc. took off after the 2009 event, while Airbnb Inc., a short-term home rental service for travelers, was named “breakout app” in 2011.

Buzz Shift

Forrest said social-networking services are becoming less of a focus at the event, with attention shifting to to wearable computing and 3-D printing. Other themes include automotive technology and the Internet of things, such as products ranging from home appliances to farm equipment that are linked to the Internet for monitoring.

“We are moving away from the social-media boom that fueled a lot of the growth of South by Southwest the past several years, and that boom is starting to level off,” Forrest said. “It’s so baked in to everything now that it’s not as much of a growing thing as it was before.”

The conference brings together a mix of entrepreneurs, Silicon Valley investors, press, and prominent technology and media companies. There are occasional celebrity sightings and plenty of all-you-can-eat taco buffets.

The gathering also sets the stage for dealmaking, and Facebook’s $19 billion agreement last month to purchase messaging service WhatsApp Inc. has fueled optimism, Forrest said.

Next WhatsApp

Potential buyers attend SXSW to find at new apps and talent, Forrest said. Facebook bought photo-sharing service Instagram a few weeks after the 2012 conference, and Yahoo acquired Tumblr after last year’s event.

Smaller startups are trying harder to prove they could be the next WhatsApp, said Jesse Redniss, chief strategy officer of Austin-based social-data startup Mass Relevance Inc.

“These smaller techie, geeky social startups have proven themselves very, very valuable,” he said in an interview. “Now there’s definitely more of, ‘Hey, we’ve got to get ourselves seen.’”

Speakers at this year’s event include Google Chairman Eric Schmidt and Senior Vice President Sundar Pichai, and Dell Inc. CEO Michael Dell, in addition to representatives from companies including Amazon.com Inc., Facebook, Microsoft Corp., Samsung Electronics Co., Twitter and Yahoo.

As the event has become more popular, it’s also getting harder for new companies to stand out, said Brian Blau, an analyst at Gartner Inc.

“There’s more competition for attention,” he said. “If you can be one of the four or five standout companies, that’s great for you.”

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Alex Barinka in New York at abarinka2@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net


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