Online privacy, or the lack thereof, has always prompted a lot of hand wringing among the cognoscenti, but very little in the way of concrete action. For most of us, it appears, keeping information about ourselves, our habits and our preferences private is ultimately less important than the convenience and services we can get by not doing so. It's a pretty simple matter to turn off the ‘cookies’ that track your web-surfing, but how many people do you know who have done that?

But the issue is now coming around again in a big way, and the stakes are very high. Last week the US Federal Trade Commission held a two-day workshop on internet privacy, and a coalition of privacy advocates took the opportunity to call for the creation of a "do-not-track" list modelled on the highly popular "do-not-call" by which people can opt out of telemarketing calls.

The notion of "do not track" is a scary one for anyone involved in the burgeoning online advertising business, for the simple reason that making online ads more effective depends on ever-more-careful targeting – which in turn depends on tracking. So-called "behavioural targeting," by which the interests of web surfers are divined according to where they go and what they do online and adverts are served up accordingly, underlies more web advertising every day.

A lot of much-anticipated innovation, moreover, is based on pushing these techniques even further. Google and others want to serve ads on mobile computers and telephones according to your physical location. And Facebook, the wildly popular social networking site, is about to roll out a new advertising system, which targets according to personal profile information on the site. While the proof is still in the pudding, some expect this to be the biggest money-spinner since Google itself.

The online advertising industry, and the publishers who depend on it (yours truly included), argue that rules against tracking or other stern privacy measures will destroy the basic economics of online publishing. Consumers have clearly indicated that they prefer free, ad-supported online services to paid subscriptions, and if that's going to be the model then behavioural tracking and ad-targeting are critical.

Further, they point out that personal information is collected in such a way that it's not associated with specific names and social security numbers, only with computer addresses. (The truth is, creating those connections is sometimes not that hard, but the ad-targeting systems don't depend on it.) And a lot of people appreciate advertising that's relevant to them a lot more than they appreciate random ads.

The very popularity of Facebook, as well as the new effort by Google and MySpace and others to compete with it via a webwide social networking protocol called Open Social, suggests that privacy is not that big an issue for a lot of people. Indeed, social networking is based on telling the world about yourself, and publishing information about your daily activities, your social circle, and your interests.

In fact, to the extent that you try to protect your privacy while engaging in social networking, you actually undermine the purpose entirely. For example, I have for years been a member of LinkedIn, the professional networking site, and it gives you the option of hiding from view who is in your network. But doing this renders the whole concept of the thing – connecting to others via introduction – more or less moot.

Virtually all commercial websites have privacy policies, and in many cases those policies are more stringent than in the offline world. At NewWest.Net, for example, we promise never to sell your e-mail address – a promise that no print publisher ever makes about your physical mailing address. On the flipside, some privacy policies are really lengthy and legalistic exercises in explaining how your information will in fact be sold to others. In either case, though, I think it's safe to say that most people don't care enough to read through and understand them.

Instinctively, the idea that your phone calls and your web surfing and anything else you do online is being monitored is kind of creepy. But in an age of warrantless wiretapping, ubiquitous video surveillance of public places and a general government eagerness to keep track of people online and off, I personally think we have bigger things to worry about.