Nowhere to hide - virtually

Wired: There's nowhere more likely to push your paranoid buttons than sitting in a dark cafe on a gloomy, rainy day in deepest Austria, watching apprehensive children stare up at a unmanned autonomous helicopter hovering three feet above their head, filming them with a CCTV camera. And that is as it should be writes, Danny O'Brien

I'm at Ars Electronica, Europe's longest and most prestigious digital arts event - and this year, the theme is privacy and the lack of it in the modern internet world.

The festival has, as it has done for the last 26 years, taken over the Austrian city of Linz with art projects and discussions, with digital artists visiting from as far away as Japan and Zimbabwe to explore and explain the digital world.

What's pleasantly surprising about Ars Electronica is that it doesn't shy away from the involvement of business in the world it describes. Perhaps that's because of its many sponsors, but is also indicative of how quickly art can turn into commerce online and vice versa.

The theme may be privacy, but much of the artwork here is embedded in Second Life, the very public, very corporate 3D world run by Linden Labs. The company, which is not a sponsor, nonetheless gets a mention in almost every talk here. A Greek artist I'm speaking to suddenly perks up when I mention that I know a "Linden", as the employees of the company are known in the virtual world.

Like bohemian artists through the ages, she sits and smokes and probes me over a drink about how best she could understand the mysterious way the Lindens operate. Lindens are practically royalty in Second Life, and hold mythical powers of privilege and patronage for those trying to make their way selling art or services in the Second Life environment.

As a source of patronage itself (the conference hands out about €120,000 worth of prizes), Ars has a respectable status - and not just for artists.

Linz is a sleepy, small town in upper Austria, and the thousands of attendees give a noticeable lift to the area's finances. The town boasts a permanent Ars Electronica museum of the future, a sign that its Ars Electronica reputation gives a fillip to the rest of the year's tourism.

It is somehow very fitting to spend time in this city whose Habsburg architecture and ambience echo the end of the Austro-Hungarian empire, that time of royalty and spies, to ponder the relationship between patronage and publicity among internet businesses.

How has Linden Labs become the name on everyone's lips, from Greece to downtown San Francisco?

Why do artists normally critical of any corporate involvement seem happy to work within its spaces? And why do all of the individuals here, while so concerned about privacy, seem happy to hand their most private data over to other similar companies? A privacy advocate I spoke to admitted sheepishly to using Google to check up on critics. Over a Wi-Fi enabled breakfast, my table colleague and I add each other to our Facebook profiles.

I think it's because the best online businesses attempt to become a part of the fabric of the everyday world. And weirdly, you don't do that by heavily overbranding. As commentators mention here again and again (either critically or admiringly), it's the companies that "get out of the way", that have wrapped themselves most intricately in our lives. The simple search page that greets Googlers; the fact that Linden Labs places no controls or branding on third-party projects in its virtual spaces; or the silent data collection and monitoring that projects such as the hovering helicopter represent: all of these are quiet presences, not klaxoning brand names.

One of the most fascinating parts of Ars Electronica is discovering how the digital revolution has affected artists, and the businesses that work around them, across the world. Talking to Brazilian law professor Ronaldo Lemos reveals another example of muting the brand to gain wider acceptance - the Brazilian branch of Sony BMG has recently jettisoned the Sony brand entirely.

The regional company is now calling itself "Big1", and has been hiring heavily from MySpace users and other alternative music paths in a way that a Sony-branded label could not. The reason, as global net expert Joi Ito mentioned in a panel on digital music, is that large brands such as Sony get in the way of customers' interaction with their musical heroes. The internet likes its intermediaries to be nearly invisible.

That doesn't mean they are not out there, hovering and ever-present. Like the tiny webbugs that dot webpages and report back to marketing companies, and the logs Google makes of your searches and where you click, and the complete control Linden Labs has over commercial or artistic projects in Second Life, they are there. The Austro-Hungarian empire was a fake, liberal state: liberal and permissive until you crossed the wrong powers - and disappeared. Who is to say that is not the world we have created online, where companies seek to disappear, but have great power over their users' private thoughts and acts?