Facebook and the Future of Privacy

Wired magazine did a good piece on how a large portion of Facebook's earnings are coming from mobile ads and that the company apparently plans on increasingly moving toward "impression"-based advertising for revenue.  Translation:  charging advertisers every time you simply look at an ad (rather than click).  For this type of advertising to be tracked, however, Facebook has to know what you, yes you, are doing.  That has obvious privacy concerns.  Link to the article below:


http://www.wired.com/business/2013/05/facebook-is-growing-through-risky-business/

Can You Afford to Be on Facebook? Part II

Jon Evans at TechCrunch agrees with me on the possible dangers of being deeply involved in social media sites like Facebook.  Since he's a novelist, he paints an even scarier picture of your possible future than I did.  Here's a link to his article:


http://techcrunch.com/2013/03/30/big-data-could-cripple-facebook/

Can You Afford to Be on Facebook?

How would you like a potential employer to look at your Facebook "Likes" and conclude that you are not smart enough for the job?  Or, equally bad, that your sexuality is incompatible with the employer's views?  But, you say, nothing in your Likes speaks to these issues.  So you might think, but a joint study between Cambridge University and Microsoft Research predicted a large group of Facebook users' IQ's, sexual orientation, and other traits to a high degree of accuracy using their Facebook Likes.  Here is a link to an article on the study:

http://www.wired.com/gadgetlab/2013/03/facebook-like-research/

Not convinced of the method?  It really doesn't matter.  These studies are being done, they will be found on the internet (or otherwise) by employers, and quite probably incorporated into hiring decisions whether they are accurate or not. 

As this type of use is made of Facebook data, more people will have to ask themselves whether they can afford to be on Facebook.  And that is not a question that will be good for Facebook's business. 

The Other Social Network: Google+

I've made no secret about my like of Google as a company on this site.  Who else is at the cutting edge of search, driverless cars, and server technology?  And Youtube is a rather valuable property, given that 15-20% of daily internet traffic resides there.  And this isn't all the company is doing -- not by a long shot.  As an example, Google+, the company's relatively young effort to get back into social networking is gaining traction rapidly.  An article this morning in Wired notes that Google+'s growth rate mirrors that of Facebook in its early days. 

http://www.wired.com/business/2012/12/google-grows-like-facebook/

Yes, Google has had some missteps and may not have the respect for privacy that we would like (although, they are not alone among internet companies in this).  When all is said and done, a long-term investment in Google seems like a really good idea to me.  I've already put my money where my mouth is on this one.

A Crack in My Love of Google

I regularly tout Google as the long-term winner of our current tech battleground.  There is its search dominance, its ownership of Youtube (one of the most valuable media properties ever created in my opinion), and Android, just to name a few assets.  Not to mention that it's pushing the envelope in server design and snapping up small tech outfits, one of which might turn out to be a goliath.  Yet, there are some cracks in the facade.  Google has shown something of  a disregard for privacy rights and there are comments like these from programmers, which worry me:

"Google does have an office in Manhattan. You should definitely apply there - I don't think it's an interesting company to work for anymore (and their recruiters are second only to Facebook's in how pathetically desperate they seem when they contact me), but the interview process is really fun."

See more of this thread at http://developers.slashdot.org/comments.pl?sid=2357190&cid=36936764

Hmmm... anecdotal but troubling if programmers no longer find Google interesting. 

My Facebook Prediction and the Speed of Change

On May 23, 2011, I predicted that Facebook would lose half of its value within 5 years due to loss of users: http://limbinvest.blogspot.com/2011/05/facebook-5-years-50.html .  Arguably, the 50% loss has already occurred but I don't raise the issue to take credit (I fully expect Facebook to lose more value over time), but rather to consider a point:  the world may be moving much faster than my previous conceptions of it would permit.  Another case in point:  one of my first posts predicted that Google would acquire Motorola Mobility within 5 years.  That prediction proved correct but took 5 months.  These are anecdotes to be sure, but I'm now examining my assumptions about the speed of change and the volatility of the world and its markets. 

Some Tidbits Buried in the Facebook Class Action Settlement

Facebook has recently agreed to settle a class action alleging that Facebook users' likenesses and names were used in connection with the site's Sponsored Stories ad program, without obtaining the users' prior consent.  No money will be paid to Facebook users as a result of the settlement because, as the papers filed in support of settlement attest, Facebook made almost no money per capita on the sponsored stories program and, thus, it makes no economic sense to distribute such minimal amounts to class members.  My takeaway from the case:  Facebook is really skirting the privacy line to extract minimal revenues from each of its users.  Of course, Sponsored Stories is only one program and, if you have enough users, even miminal revenue from each adds up.  Still, if Facebook is willing to risk alienating its users in this rather overt way to increase revenues, this suggests some desperation on the company's part.  Here is a link to a Wired article which discusses the settlement and links to a copy of the papers filed in support of the settlement, should you care to delve deeper.

http://www.wired.com/threatlevel/2012/07/groups-get-facebook-millions/

Facebook: How Soon Will My Prediction Come True?

In one of my first posts on this blog, I predicted that in 5 years' time, Facebook would lose half of its value.  That may happen much quicker than I thought based on the recent IPO (my prediction was pre-IPO).  I noticed an interesting stat from a recent Pew Foundation study, however.  The average age of a Facebook user in 2010 was 38.  I would have guessed much younger.  Given this average age, one might think that Facebook's appeal will not be as tied to a young, "cool" factor as MySpace was -- and thus will not bleed users once the next generation of fickle youth want to choose their own defiing network rather than their parents' or older siblings' social media of choice.  The average age cuts both ways, however.  Consumption and gullibility generally decline with age.  This would seem to make Facebook's goal of monetizing its user base harder.  All in all, I'll stick with my prediction. 

Facebook; 5 years; 50%

In five years, Facebook will be worth no more than 50% of what it is now. Why? Because the people who use it now will grow tired of it or they will have more competition for their time from new sources. The people who don't use it yet will want something new (remember MySpace?) that helps them form their own online identities. As an example of both of these phenomena, check out Like a Little (http://likealittle.com/home). With internet sites like Facebook, you're not competing for dollars but for time (or attention, if you will). There is a finite amount of time (24 hours times number of people with internet connection). Ultimately, Facebook will fall to this unalterable law, as have so many others already. See also Ebay auction numbers for the quickly dwindling appeal of what seemed like the hottest concept ever less than a decade ago.