It’s funny how small decisions lead us to unforeseen destinations. After we moved back to Massachusetts in 2001, I developed two interests – one in the Russian language and the other in cryptography. In pursuit of these I took a class in Russian at the Harvard Extension School and read a book about the history of encryption called The Code Book. Now years later I work for a Russian security software company.
One of my favorite stories from The Code Book was about the Enigma Machine, the encryption device the Germans invented and used in World War Two. The Enigma Machine didn’t just encrypt something once (for example “1=A, 2=B”) but multiple times. The way it was configured, if you didn’t know the initial settings, you were screwed. It was largely regarded as impregnable.
Until the British actually managed to crack it. This was no small feat – it required rooms full of Britain’s smartest citizens studying it, German code book theft and Alan Turing inventing the modern computer.
But most interesting to me was after Enigma was deciphered, it was of foremost importance to not let the Germans know they had cracked the code. It would have been a simple, if inconvenient, matter for the Germans to change the codes if they knew their lines were insecure.
This required the British to take steps to not flaunt their new knowledge. As Singh writes:
…the Engima decipherments gave the locations of a number of U-boats, but it would have been unwise to have attacked every single one of them, because a sudden unexplained increase in British success would warn Germany that its communications were being deciphered. Consequently, the Allies would allow some U-boats to escape, and would attack others only when a spotter plane had been sent out first, thus justifying the approach of a destroyer some hours later.
Despite these precautions the Germans almost figured it out. Due to an accident and overzealous British ship captains, one battle resulted in a wipeout of nine German ships. German security experts were suspicious but attributed it to bad luck or a spy in their midst, as “the breaking of Enigma was considered impossible and inconceivable.” The Germans continued to use the same codes throughout the war and lost.
In poker, letting your opponent know your cards is called “tipping your hand.” But sometimes I like to use this phrase to convey the idea “Don’t let your opponent know what you know.” If we are playing with marked cards, the most important thing to me is to not let you find out. In this way, to let the opponent know you have privileged information can also be called “tipping your hand.” To get maximum value out of knowledge sometimes you have to play dumb.
What’s true in war is also true in business. Awhile ago the New York Times broke the story that Target, by tracking and data mining, can actually determine if a regular customer is pregnant before she tells her relatives. This information is extremely valuable to Target. With it they can deliver targeted advertising to an interested buyer and not rely on expensive, scattershot TV ads broadcast over a huge audience.
When Target initially discovered this, they went wild and bombarded pregnant customers with ads for baby related products. The recipients of these ads hated them. A pregnant woman may be interested in ads for diapers but she doesn’t want some giant corporation knowing so much about her. It’s creepy and intrusive and makes customers run away.
The problem again lay with tipping their hand. Target learned their lesson quickly. They still rely on targeted advertising but now they put in decoy ads, like for a lawnmower, next to the picture of the baby crib. They still know a lot about you but they are careful about disguising it.
Which brings me to Facebook and Google. Here’s the bad news – if you are logged into Facebook and/or Google while you surf the web, these two giant entities are tracking just about every site you visit. Here’s the good news – now you know it.
When it comes to internet advertising, we’ve come a long way from the days of when I worked at Yahoo. Back then advertisers would spend millions on tiny banner ads and hope for the best. They were always disappointed. This broad-based method was ineffective and, unfortunately for us at Yahoo, completely measurable. While it’s often difficult to measure the success of a TV commercial, internet banner ads are tracked down to the click through and buy rate.
Facebook and Google have solved this by giving users something they want with a smiley face. “Give us your information to share with your friends” say the friendly folks at Facebook. “What video would you like to watch next?” asks the Google owned YouTube. “We’d be happy to provide you with an email service for free” they both offer. All the while they are recording your every choice and movement. Facebook even records the status updates you type but don’t post.
It’s not hard to see where this is leading. Ever wonder why some ads seem to follow you around from site to site? Or why Facebook is giving you ads for singles dating websites when you are about to get a divorce? It’s not blind luck. In some ways they know you better than you know yourself.
Why is this important? It’s important because privacy is necessary for freedom. Gone are the days when if things didn’t work out in one town someone could move to a new city and start a new life. Now not only is there a permanent record of your life online but there are companies actively tracking you.
I hope I don’t sound too paranoid. I still use gmail, YouTube, and Facebook but I’m cutting down on them. A lot of people freaked out about the NSA spying on U.S. citizens. That matter didn’t concern me so much. The NSA monitors Americans in pursuit of the select few who might be dangerous. Facebook and Google on the other hand are interested in tracking everyone. The more they know, the more money they make.
With the NSA, it would be difficult to see how I could be on the potential terrorist radar. With Facebook, I’m a valuable commodity. Mostly I’m wary of giant corporations knowing a lot more about me than I even realize. It’s not in their interest to tip their hand and reveal what they know.