In these first few generations of personal computing, we’ve operated with the “money in the mattress” model of data storage. Information assets are managed personally and locally – ?on your machine, disks or external drives. If the computer crashes, the drive breaks, it’s as though the mattress has burned. You’re pretty much up the creek. Today, though, we’re transitioning to a more abstracted system of remote data banking, and Google and its competitors are the new banks. Undoubtedly, there are great advantages to this (your stuff is more secure in multiply backed-up, networked data centers; you don’t need to be on your machine to access mail and personal media) but the cumulative impact on privacy ought to be considered.
The Economist takes up some of these questions today, examining Google’s emerging cloud of data services as the banking system of the information age:

Google is often compared to Microsoft…but its evolution is actually closer to that of the banking industry. Just as financial institutions grew to become repositories of people’s money, and thus guardians of private information about their finances, Google is now turning into a custodian of a far wider and more intimate range of information about individuals. Yes, this applies also to rivals such as Yahoo! and Microsoft. But Google, through the sheer speed with which it accumulates the treasure of information, will be the one to test the limits of what society can tolerate.

Google is swiftly becoming a new kind of monopoly: pervasively, subtly, intimately attached to your personal data flows. You – ?your data profile, your memory, your clickstreams – ?are the asset now. The banking analogy is a useful one for pondering the coming storm over privacy.
Also: expect excellent coverage and analysis of these and other Google-related issues very soon on Siva Vaidhyanathan’s new book blog, The Googlization of Everything, which is set to launch here in early September.