The Truth About Facebook: Follow the money

by Evelyn Castillo-Bach
No need to worry about Facebook going broke any time soon. The Wall Street Journal reports that the social network doubled its revenue to $1.6 billion in the first half of 2011. Recent reports by TBG Digital along with data compiled by eMarketer show how Facebook makes its billions.

Games on Facebook generated about $500 million in revenue, while ads account for the rest. The numbers are so huge that for most people its hard to put your head around it.

So what is Facebook selling? One thing is certain. Facebook did not make billions by keeping private -- information belonging to its 750 million users. Those billions derive directly from making user information available. The only question is how much of your private information is shared and who gets to keep it.

Facebook's terms and privacy policy are so full of caveats and convoluted ambiguity that it makes them essentially worthless to an ordinary person. You need a legal team and an investigation unit the size of the pentagon to keep track of all the companies within Facebook that have access to your information. Neither that legal team or investigative body exist. It's essentially a free for all. Anyone who can make an app or game can enter into your world. And even if you never use a game or app yourself, it won't help. If any of the people you are connected to do use one of those games or apps, your information gets sucked up to.

The more sophisticated the developer the more information can be collected. When you consider that every app and game is a distinct and stand alone company too, with its own privacy policy and terms, you begin to understand how everything you do on Facebook is for sale -- every photo, every sentiment shared, everything you look at, everything.

Periodically, one of the large media organizations or privacy groups reports on violations they uncover within the apps and games in Facebook. Despite the best efforts of many ethical journalists, it's nearly impossible to really keep track of the thousands of companies within Facebook who may be wrongfully collecting and storing user data.

It does not take too much imagination to consider how easily a game or app can be created and used as front for a data collection company, a data broker, or organized crime.

If you ever doubted that your information has value, dismiss that thought. In the hands of the right people, it's worth billions.

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Posted by UmeNow

on Tue, September 13, 2011