Is Privacy in The Cloud an Illusion?

With the announcement today that Adobe is acquiring Omniture, one of the largest web analytics firms -- something occurred to me. This is probably obvious to most, but the move to cloud based services has some pretty big potential ramifications when it comes to privacy and risks in unknowingly agreeing to the use of your private information being data mined. The Adobe Omniture deal makes this very apparent. More then ever, your privacy is becoming an illusion.

Like it or not when it comes to terms of use and privacy policies, most people don't read them. I'm a little bit of nut when it comes to them, but I fear I am in a minority. I also realize that when it comes to free and or low cost cloud services, you are typically asked to give up some privacy in return for the service. After all nothing is truly free. So the question now becomes how much of personal information should I be prepared to give away, be it for using a free cloud service or even for a paid service. What is an acceptable amount? None or some?

For some applications, such this blog or even some social networking application the idea of giving away some personal information doesn't appear to be a problem for most. Think of a targeted ad in facebook or a Google search. But what about when it comes to other more "grey" areas such as a cloud based document / content management system, email or CRM or other various business applications. The idea of unknowingly giving way personal information becomes a horrifying thought. Making it worse, you may never even realize it's happening. And who can blame you for being scared, I don't have time to read 50 page terms of usage and other various click wrapped user agreements.

So my question; is the Omniture deal just the tip of the privacy iceberg ?