"Think twice about it," Mr. Saffo advises businesses. "You may discover that private information is the new dioxin or the new asbestos.... This is a vast liability."
AOL could face lawsuits from members of the online community who contend that their privacy was violated in the recent lapse.
The chief executive of Google said Wednesday that the company would not change its policies as a result of AOL's mishap. "We are reasonably satisfied ... that this sort of thing would not happen at Google, although you can never say never," chief executive Eric Schmidt said.
At least one rival search engine, Ixquick.com, is trying to build its business on a pledge of privacy – that it won't keep records of users' Internet addresses.
AOL, for its part, has apologized and removed the user data from the Internet, but not before some other groups had copied it to other sites where it remains available.
The challenges hardly mean that society will retreat from the digital age. The trend, indeed, has been toward more online exposure of identity, not less. In the past year, MySpace.com has exploded in Web-traffic rankings as a venue for people to publicize themselves and connect with potentially millions of others.
Experts generally say that society is getting benefits from the technology that far outweigh the damage done by security gaps.
"Some of us yearn for the pioneer days [without computers], but I'm not sure how many of us do," says Stuart Madnick, a computer expert at the Massachusetts Institute of Technology's Sloan School of Management in Cambridge.
He uses the analogy of electricity. The grid sometimes goes dark, but when it's on, people have services such as air conditioning and television that weren't available 100 years ago.
"We just need to do a much better job" at managing the risks that go along with networked computing, he says.