In 2004 Google unveiled Gmail: a powerful e-mail account with a gigabyte of storage. That was 500 times what Hotmail was offering—so much storage, the original Gmail didn’t even offer a delete button—and all for free.

But not everyone rejoiced. Gmail paid for all of this goodness by displaying small text ads, off to the right of each incoming message, relevant to its contents. Privacy advocates went ballistic. It didn’t seem to matter to them that a software algorithm—not a human being—was scanning your messages for keywords. The Electronic Privacy Information Center called for Gmail to be shut down, and a California state senator proposed a bill that would make it illegal to scan the contents of incoming e-mail.

Two years later a service called Futurephone let anyone make free unlimited overseas calls. You just dialed a line in Iowa and then, at the prompt, entered the number. You were never asked for your name, e-mail address or any information at all.

When I reviewed Futurephone for the New York Times, I thought I was doing my readers a favor—but it drove them crazy. They whipped themselves into a frenzy trying to figure out how Futurephone made money. Many concluded that it was an elaborate scam to harvest phone numbers.

But why, I responded on my blog, would Futurephone go to all that trouble, when there’s already a central list of American phone numbers in the phone book? All right, then, my concerned readers said, in that case, Futurephone must be listening in on our calls.

To many people, it seems that the more time we spend online, the more often we are offered convenience in exchange for our privacy. Grocery stores’ affinity cards give us discounts—but let them track what we are buying and eating. greets us by name and remembers what we have bought. Facebook has amassed the largest database of personal information in human history (more than half a billion people).

Of course, convenience-for-privacy deals have been going on for years. Credit cards leave a trail. Phones give phone company employees a record of who you’ve been calling. It’s nice to have a house to live in—but buying one leaves a permanent record of your whereabouts.

There are some good reasons to protect certain aspects of our privacy, of course. We would never want our medical or financial details to keep us from getting a job—or a date. We might not want our sexual exploits or our voting patterns made public.

But beyond those obvious exceptions, privacy fears have always been more of an emotional reaction than a rational one. (Does anyone really care what groceries you buy? Does it matter if they do?) And in the online world, much of it is simply fear of the unknown, of what’s new.
In time, as the unknown becomes familiar, each new wave of online-privacy terror seems to fade away. Nobody bats an eye over Gmail’s ad-scanning feature anymore. Even middle-agers and grandparents are signing up for Facebook.

(And Futurephone? It’s out of business. Blogger sleuths uncovered its more likely business model: it was exploiting a government subsidy that pays Iowa a few cents per incoming long-distance call. Iowa was sharing the revenue with Futurephone.)

The younger generation can’t even comprehend why their elders worry about privacy. Indeed, the entire appeal of the new age of online services is to broadcast personal information. On purpose. Foursquare, Gowalla and Facebook Places even publicize your current location, so that your friends can track your movements (and, of course, join you).

If you were among those who thought that Google overstepped privacy lines with Gmail, you must be positively freaked about these developments. For all we know, Google is collecting data about what we watch (Google TV), where we go (Google Maps), whom we call (Android phones), what we say (Google Buzz), and what we do online (Google Chrome browser).

But at least some aspects of your privacy have been gone for years. The fear you feel may be real, but the chances of someone actually looking up the boring details of your life are reassuringly small. As with fear of flying, shark attacks or lightning, your gut may not be getting realistic data from your brain.