The National Security Agency (NSA) and the FBI are reportedly into the servers of nine of the top Internet companies, according to a story in The Washington Post. The initiative, called PRISM, began in 2007 and is believed to be the source for 1 out of every 7 intelligence briefings received by the president.
The companies involved were believed to be Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube, and Apple, with Dropbox anticipated to join soon. [Disclosure: Yahoo is a partner with CNBC on Talking Numbers.] Several of these companies have denied or partially denied forking over data to the feds.
CNBC contributor Zachary Krabell, President of River Twice Research, believes Americans are caught in a bind. They may not like the laws passed by the legislators they elected, but internet tools are too much a part of their lives to be given up. And, since the PRISM project covers so many large companies, if means no one of them stands out. "From the standpoint of the markets, this is a non-issue because it involves everyone and not a few, select players."
That said, one company that has often felt the heat of privacy concerns in the past has been Facebook as it tries to monetize its member base. User data has political ramifications, too, which may be of interest to global security. Facebook has profiles of over 1 billion people and was instrumental in anti-government protests throughout the Middle East. In the United States, it's often used as a platform for users to show pictures of their cats and vacations.
CNBC contributor Abigail Doolittle, Technical Analyst at The Seaport Group, sees a lot of volatility ahead for Facebook's stock and believes the privacy issue will play a role in triggering breaks through technical levels.
"Facebook has really been, out of its IPO gate, a trader's paradise," says Doolittle, recalling her previous analysis of Facebook on Talking Numbers. At the time, she believed Facebook would reach $22 to $23 per share.
"We're at that level now," says Doolittle.
Where does she think it will go from here?
Watch the video above to hear Krabell on the recent privacy scandal and where Doolittle believes Facebook is headed next.