Privacy Wars - Are you really a customer?

Note


I'm resurrecting this old Blogger account to post entries for my CS 280 class (Risk and Reward in the Information Society) at the University of Regina. This will include posts that don't fit on my business site (http://www.reginavirtualhelpdesk.com). Any posts from there that apply here will be copied and pasted for the benefit of my classmates and professor.

Now on with the show....


Many of the students in my class are very concerned about privacy in today's information age, and I while I find that concern valid, I believe that it's overblown. When I post, I don't post anything that I wouldn't want others to find. For instance, you won't see me swearing, complaining about clients, or posting pictures of me getting plastered (even if it wasn't for the fact I'm severely allergic to alcohol). I try to maintain a professional appearance because my clients could read what I have to say.

What is the deal?


For this post, I will focus on Facebook. People often complain that their data is being breached by Facebook and being made available to others without permission. However, at no time has Facebook ever held a gun to anybody's head and forced them to post anything. It was you who posted the pics from the Beer Pong tournament, it was you who posted that status that said exactly what you thought about your boss (and it was you who friended him so he could read it), and it was you who invited all your friends to play Farmville. If you don't want the information up there - don't post it.

Are you a customer?


Chances are you are NOT a Facebook customer. Yup, you are not a customer of Facebook, even if you have an account and use it. Facebook has customers, and lots of them, but it isn't you. Mark Zuckerberg has made a lot of money from Facebook, and it remains a very profitable company, yet despite all the rumours about it, they will not charge for accounts (and posting a status won't change that).

Facebook's customers are the advertisers. Zynga's (Farmville) customers are advertisers. "Which Lord of the Ring's Character are you"'s customers are advertisers. They are the ones who pay Facebook, not you. You are an expense, a vendor. Facebook sells the advertising space to their customers in exchange for real cash money. In order to make the advertising space valuable, they need eyeballs and lots of them. Yet eyeballs are not the only factor in what makes advertising space valuable.

As a local business owner, advertising to 6 million people living in New York City would be a waste of time and money. However, Facebook allows me to target my market as specifically as I want. I could  limit my ads to only appear to Business owners,  40 - 50 years old, living in Regina who have Post-Secondary education. That would be more valuable to me, and I would pay more for that ad space. How does Facebook target that specifically? Easy, you, as a vendor, gave them that information to help others find you.

It's like going to Walmart and grabbing a shirt of the rack. You wouldn't walk out of the store without paying for it would you? Of course not, you hand the cashier some money, and you walk out with the shirt. Most people, who aren't business owners or have taken Economics courses, only think in terms of being consumers, customers.

With Facebook, instead of giving them cash money you give them information about you (demographics, your friends, and your interests) which allows them to charge their customers more money. In exchange you get a "Social Network" however you wish to define it. The "Social Network" is the shirt from Walmart, your information is your money.

So when it comes to Privacy rules, Facebook has a conflict. Their real customers need that information from you, and the customers are paying the bills. You are a vendor, an expense. If I had to choose between upsetting one of my customers, and upsetting one of my vendors, who am I going to choose? I will always side with my customer - they pay the bills. Since you aren't a customer of Facebook, Facebook isn't going to give you the benefit of the doubt. And nor should they. You are getting a service for "free", but you still have to pay for it - just remember, there's no need to post something you don't want your (future) boss to see.

TANSTAAFL always applies. There ain't no such thing as a free lunch.