New York Times:
But unlike other big-ticket corporations, it doesn’t have an inventory of widgets or gadgets, cars or phones. Facebook’s inventory consists of personal data — yours and mine.
Facebook makes money by selling ad space to companies that want to reach us. Advertisers choose key words or details — like relationship status, location, activities, favorite books and employment — and then Facebook runs the ads for the targeted subset of its 845 million users.
It shouldn’t be news by now, but it’s worth reinforcing that when you use Facebook, Google Plus and other social networks, you are the product they’re selling to advertisers. Social networks have their place, but there’s an essential transaction happening that you need to be aware of: trading your privacy and your personal data to use the service. Forewarned is forearmed.
Its a drum that cannot be banged hard enough, but I get the feeling that as we enter a more advanced and connected era of the social web, this veil of secrecy will be lowered.
I think the social media services that will succeed will be the ones that are honest and transparent with how they use our data, so that it stops being a taboo subject.
We all know it happens, so lets praise the companies that are open with how their businesses work.
It appears that people prefer money to privacy.
Facebook makes a tad over $5 revenue per user PER YEAR. There are a number of social sites I would use for $10-12 per year if that made the experience ad-free and “private” (as far as social networking can be private given its very nature).