Privacy is fast becoming the trendy concept in online marketing. An increasing number of companies are flaunting the steps they've taken to protect the privacy of their customers. But studies suggest consumers won't pay even 25 cents to protect their data.

In one week in July, Ask.com unveiled AskEraser, a tool that will allow users to obliterate their search histories; Microsoft announced enhanced privacy controls for its Windows Live service; and Google and Yahoo shrank the amount of time they retained IP addresses and search logs, reducing the ability of government agencies to subpoena such data.

Startups are aiming to carve out a piece of the privacy market. ReputationDefender, which allows individuals to manage what people say about them online, launched the beta version of a new subscription service on Sep. 1. Its service, called MyPrivacy, lets users control how their personal data is brokered across the web (the service was announced last fall but is only now publicly available).

Suddenly it seems that "privacy is the new black," as Duncan Riley wrote at TechCrunch.

For $5 a month, MyPrivacy subscribers can locate their records in people-search directories, such as Yahoo People Search, 411.com, WhitePages.com, Yellowbook.com and Netscape White Pages, and click a button to remove their listing. As long as you keep paying, the service will keep you unlisted when these information brokers refresh their directories. MyPrivacy will feature at least 10 major consumer databases at launch and expects to have 75 such information brokers signed on by year end.

But are U.S. consumers willing to pay for privacy? And if so, how much?

A 2007 study by researchers at Carnegie Mellon and the University of California at Berkeley found that most subjects were unwilling to spend even a quarter to keep someone from selling sensitive information about them – such as their weight or number of sex partners.

"People prefer money over data, always," says Alessandro Acquisti, assistant professor of information technology and public policy at CMU.

Historically, the results are equally discouraging to would-be privacy entrepreneurs. In 1999 Zero-Knowledge Systems launched its Freedom suite, which allowed netizens to surf the web and manage e-mail anonymously. The company discontinued the product in October 2001 because of lackluster sales (the dot-com implosion didn't help).

In 2005, Zero Knowledge, having given up on the consumer privacy market, morphed into Radialpoint, which provides technology services to ISPs.

Another privacy service, Anonymizer, whose Safe Surfing Suite lets individuals cruise the net with anonymity, is "significantly profitable and growing rapidly," according to President and chief scientist Lance Cottrell. But he admits that commercial customers account for about 80 percent of his company's revenue. The reason? Most consumers are unaware of how their privacy is slowly siphoned off, Cottrell says.

"The threats (enterprises) face are tangible and monetary," Cottrell says. "The thing about consumer privacy is it's really a death from a thousand cuts. With any given click or any given web page the loss of information is usually very subtle. The fact that you may get more spam or pay more for flowers because you live in a wealthy ZIP code are just single drops in a tsunami of privacy violations."

Reputation Defender CEO Michael Fertik admits his MyPrivacy service is something consumers could do themselves. "They can also change the oil in their cars, if they wanted to take the time and effort," he notes. "We offer the economies of scale, technology and expertise to do it for them."

But the amount of privacy MyPrivacy can realistically hope to provide is fairly limited. The major data brokers have an incentive to work with them, says Owen Tripp, MyPrivacy's executive vice president of products. "The cost of having to deal with squeaky-wheel customers is much higher than the value of having them on the list," he says. "It's just cheaper to remove them."

Getting the smaller brokers to cooperate will prove a bigger challenge, Tripp admits. And because brokers cull much of their information from public records that can't be suppressed, that information will still be available for such brokers to resell.

"I think it would be difficult for any company to claim they can really opt you out when they can't go back to the source and take you out of the public record," says Jennifer Barrett, global privacy leader for Acxiom, a $1.4 billion data broker. "When consumers pay for a service like this, most expect universal opt-out. When the number of (marketers) who contact them (with junk mail) doesn't change very much, they'll say 'this didn't do much good.'"

Fertik argues his aim isn't to reduce spam or junk mail but to lower your web profile – making it harder, though not impossible, for stalkers or identity thieves to find you. As with his firm's reputation management services, Fertik offers no guarantees. But in an era where personal privacy is under siege by both industry and government, he believes people will pay to erect a small wall around their data.

"One hundred and thirty million people put their names on the Federal Trade Commission's 'Do Not Call' list," Fertik says. "You're saying 10 percent of those people wouldn't pay $5 a month for privacy? That's nuts. I think it's a market with absolutely zero risk."

Others aren't convinced. Austin Hill, one of the founders of Zero-Knowledge Systems and now CEO of Akoha.org, says most people remain unaware of what happens to their information online – and unwilling to make sacrifices to protect it.

"Ask people if they care about the environment they'll say yes, but they're not willing to give up their SUVs," says Hill. "Ask if they care about privacy, they'll say yes, absolutely, but I will not take down my MySpace page with my 400 friends on it because that's how I socialize. They're very unaware that these pages get indexed, archived, and become part of their public record.

"I hate to say this, because I am a big fan of privacy," Hill adds. "But I think as a society we are redefining our understanding of what 'privacy' means, and unfortunately not for the better."