Privacy: Facebook and Google baking it in, but will startups follow the recipe?

Intel Capital's Christine Herron, Google's Anne Toth, Facebook's Rob Sherman and Lookout's Kevin Mahaffey at PII2012.

High-profile privacy breaches have increasingly been making headlines, putting the issue further onto the agenda of the tech industry. But the message hasn’t necessarily reached those aspiring entrepreneurs who are collecting user data as they try to develop the next blockbuster app.

That was one of the messages this morning at the Privacy Identity Innovation conference in Seattle, as panelists focused on the changing regulatory landscape for privacy, and the companies trying to navigate the sometimes competing interests of user privacy and business goals.

“You can’t expect two guys who are in a garage and trying not to die to create a consortium and figure out what’s beyond the line,” said Kevin Mahaffey, co-founder and chief technology officer for mobile security firm Lookout.

“Engineers are hoarders, if storage is cheap,” agreed Christine Herron, a director at Intel Capital. “If you have no idea how you’re going to make money, you don’t know what to keep and what to throw away.”

One of the keys is “figuring out how to start the conversation at the beginning” of the product development cycle, said Rob Sherman, the manager of privacy and public policy for Facebook.

He said the company has “redoubled” its efforts to build privacy into the social network, and increase transparency about privacy settings, since the company reached a settlement with the FTC last fall.

Anne Toth, the head of privacy for Google+, said users are increasingly engaging with privacy issues, even if they’re not digging through the details of a lengthy privacy policy.

“It’s about how you choose you engage at the moment you click a button to share,” Toth said, referring to the way Google’s social network lets users segment their friends into circles for selective sharing. “If that’s the measure, then I think we’re undercounting the people who are managing their privacy online.”

We’ll have more from the conference over the next two days. Tomorrow morning at the conference I’m interviewing Del Harvey, the director of trust and safety for Twitter, and we’ll post highlights afterward.