The very question might strike CIOs as strange. Ten years ago, then-Sun Microsystems CEO Scott McNealy told us, "You have zero privacy anyway. Get over it." Since then, we collectively got in touch with our inner exhibitionist. People talk about their antidepressants on Facebook or post videos of themselves violating work policies on YouTube (two Domino's workers were fired for such a stunt). Teenagers are sending naked or semi-clad pictures of themselves over their cell phones.

But people also ask for photos or videos to be removed from social networking sites, says Deirdre Mulligan, a lawyer and former law professor who is now assistant professor at the University of California at Berkeley School of Information. Individuals and communities have balked at the way Google Maps' Street View exposes location information. Meanwhile, a 2008 Harris Interactive poll found that 60 percent of Americans were uneasy about having Web content customized for them based on their usage patterns.

Maybe privacy isn't dead. In fact, says Michael Blum, a partner at Fenwick & West and chair of the firm's privacy and information security practice, privacy should trigger all sorts of alarms for CIOs who must protect trade secrets, prevent security breaches or clean up after incidents that lead to bad public relations, and expensive records repairs. It won't be long, Blum says, before some company has to deal with employees harassing each other in public via Facebook. Welcome to privacy 3.0.

Facebook and other social media sites are on the front line of the privacy wars. And because of their size--Facebook has more than 200 million users--what these sites do with user data will influence what consumers expect from other companies. The early lessons from Facebook show that consumers increasingly expect to . Tens of thousands of Facebook users revolted against its Beacon application, a targeted advertising tool that broadcast what they were buying by posting "stories" about it on their status feeds. There were plenty of Facebook users who wanted to know what their friends were buying. But there were also plenty who didn't want that information public (one poor fellow bought a very nice ring as a surprise for his wife, who subsequently saw it on his Facebook page and asked him who it was for).