When I predicted a social networking privacy backlash a few months ago, most everyone scoffed. Young people have grown up online. They are used to exposing their lives. They are willingly give up their privacy. They aren’t concerned about the risks.

Well, it turns out that the digital generation does care about their privacy (and they are a lot smarter than you think). The backlash against Facebook’s new feeds for tracking individual user actions was so swift and sure that there should be little doubt in anyone’s mind that privacy concerns will be a PRINCIPAL driver in the evolution of the user-driven web. Sure, not all Facebook users feel this way, and sure there is a bandwagon effect, but there’s no denying that the privacy nerve is very sensitive — even raw.

It’s one thing for people to share their personal information in public when it’s only their friends stopping by to see what’s up, but when they wake up to the fact that technology can enable this information to be tracked and syndicated across the network — suddenly everyone starts to feel pretty naked. And granted this is just a matter of perceptions — information on Facebook is no more publicly accessible than it was before, but suddenly everyone is casting around for a fig leaf.

The news feed takes information that people might have buried in their profile page and automatically displays it on the homepages of people in their network. As the information is broadcast more widely, attention is called to changes that previously might have been seen only by people who hunted. That’s where the new feature goes too far, many students said.

“It used to be so innocent and fun,” said Susanne Tortola, a recent American University graduate who uses Facebook to keep in contact with friends.

Before the recent change, her information — relationship status, notes her friends have posted and photos she kept — was visible only to people who read her profile. But now that Facebook is actively promoting updated information, Tortola can no longer quietly make changes, such as eliminating people from her roster of friends. Facebook’s new system blasts that information as if it were on the marquee outside a movie theater. “Facebook can use your information and distribute it however they want to now,” Tortola said.

I’ve argued before that a desire to share in the economic spoils may drive users to rebel over ownership and control of the content they create, but it may be that privacy concerns will be the first tipping point.

This uproar will probably die down, and Facebook will survive. But before anyone decides to buy Facebook for the $1 billon they were reportedly asking for, remember this: the network giveth and the network can taketh away just as quickly.