SAN FRANCISCO — When Marissa Mayer, Yahoo’s chief executive, recently announced the company’s biggest security overhaul in more than a decade, she did not exactly receive a standing ovation.

Ordinary users asked Ms. Mayer why Yahoo was not doing more. Privacy activists were more blunt. “Even after today’s announcement, Yahoo still lags far behind Google on web security,” said Christopher Soghoian, a technology analyst at the American Civil Liberties Union.

For big Internet outfits, it is no longer enough to have a fast-loading smartphone app or cool messaging service. In the era of Edward J. Snowden and his revelations of mass government surveillance, companies are competing to show users how well their data is protected from prying eyes, with billions of dollars in revenue hanging in the balance.

On Thursday, Microsoft will be the latest technology company to announce plans to shield its services from outside surveillance. It is in the process of adding state-of-the-art encryption features to various consumer services and internally at its data centers.