Facebook's $5 billion IPO is banked on your private data -- and you get nothing
A look at how Facebook used your data to make big profits - and how you can take some of that power (if not money) back
Published: Friday, February 3, 2012, 10:00 AM
BY MEENA HART DUERSON / NEW YORK DAILY NEWS
Updated: Friday, February 3, 2012, 10:29 PM
Facebook founder and CEO Mark Zuckerberg is taking his company public in a $5 billion initial public offering, all possible thanks to your generous sharing of private data.
Facebook’s $5 billion IPO filing means Mark Zuckerberg and his team stand to become some of the richest people in the world by cashing in on your personal information - and there's not much you can do about it.
The social network boasts more than 800 million monthly active users who happily share everything about themselves on the site – from their age, gender and location to their taste in movies, music, clothes, games and news, not to mention personal photos, videos, and messages.
Facebook’s trove of data on its users is what makes it so attractive to advertisers – which is how the company brings in 85% of its revenue, a whopping $3.7 billion in 2011. That percentage used to be even higher – 98% in 2009 - before Facebook figured out how to make money from social gaming. The site now charges a fee for all transactions that take place on the Facebook platform, and revealed that 12% of the company’s revenue is attributable to Zynga, the leading platform for social games.
But it’s the personal preferences you express on Facebook – whether by clicking a “like” button, browsing a brand page, or changing your relationship status – that are the site’s bread and butter, and they’re incredibly valuable to advertisers because they are tied to your real identity.
Facebook touts its ability to help companies hit a more relevant slice of potential customers by mining its incredibly deep data records, citing a deodorant campaign that got a 9% bump in sales after targeting women to receive its ads, and a wedding photography business that saw success when it focused ads at women in its geographic area who had changed their relationship status to “engaged.”
"We offer advertisers a unique combination of reach, relevance, social context and engagement to enhance the value of their ads,” the company said in the filing, pointing to its integration of advertising into its users’ daily routines so that ads are harder to ignore.
According to Facebook’s IPO, users now generate an average of 2.7 billion “likes” and “comments” per day, a huge trail of information that can be used to create marketing campaigns with a laser focus for maximum advertiser benefit.
Users have already seen this in the News Feed and with targeted ads, where the postings and campaigns you see when you log in have clearly been customized based on the Internet profile you’ve created through your choices. What you and your best friend see when you log in is completely different depending on what your Internet behavior is like.
Though users agree when they join Facebook that the site can store their data, it’s striking to realize just how much is being recorded.
Facebook gathers information about you every time you leave a status update, upload a photo, write a comment on a friend's post, search for a page or a profile, click on an ad, or use an application. If you are tagged in a post your location is indexed, as is the time, date and place of any photos or videos you upload.
The site can also track what kind of device you are on and what browser you use to access it, as well as the other web pages you visit if they are enabled with a social plugin such as a “like” button – which over 40 million sites have installed, according to the Telegraph. So even if you’re not on Facebook, you’re feeding it data.
The social network has taken heat in the past for its privacy policies – its motto of "move fast and break things" means it hasn’t always gotten changes right the first time, and has been slammed for site redesigns that made private information public without user consent.
Yet Zuckerberg insists his goal is to get the world to share more data, and in a personal letter included in the IPO filing, he stated that Facebook’s goal is “to make the world more open and connected.”
That’s confirmation of what many Facebook users have come to realize– you’re not the only one looking at your data, and your information is only becoming more public.
So what can you do to limit your exposure?
Check your privacy settings to limit who can see what you post and share on Facebook.
Keep your involvement on Facebook to a minimum - don't "like" things unless you want advertisers to know that information, and don’t log in to other websites through Facebook unless you want your every move recorded. Log out of your Facebook account when you are browsing the web, and clear your cache and browser history regularly so the profile you leave across the Internet is less complete.
And ultimately, get used to it – or get ready to quit Facebook.
Read more: http://www.nydailynews.com/news/fac...-private-data-article-1.1016946#ixzz1lPRS94AC
A look at how Facebook used your data to make big profits - and how you can take some of that power (if not money) back
Published: Friday, February 3, 2012, 10:00 AM
BY MEENA HART DUERSON / NEW YORK DAILY NEWS
Updated: Friday, February 3, 2012, 10:29 PM
Facebook founder and CEO Mark Zuckerberg is taking his company public in a $5 billion initial public offering, all possible thanks to your generous sharing of private data.
Facebook’s $5 billion IPO filing means Mark Zuckerberg and his team stand to become some of the richest people in the world by cashing in on your personal information - and there's not much you can do about it.
The social network boasts more than 800 million monthly active users who happily share everything about themselves on the site – from their age, gender and location to their taste in movies, music, clothes, games and news, not to mention personal photos, videos, and messages.
Facebook’s trove of data on its users is what makes it so attractive to advertisers – which is how the company brings in 85% of its revenue, a whopping $3.7 billion in 2011. That percentage used to be even higher – 98% in 2009 - before Facebook figured out how to make money from social gaming. The site now charges a fee for all transactions that take place on the Facebook platform, and revealed that 12% of the company’s revenue is attributable to Zynga, the leading platform for social games.
But it’s the personal preferences you express on Facebook – whether by clicking a “like” button, browsing a brand page, or changing your relationship status – that are the site’s bread and butter, and they’re incredibly valuable to advertisers because they are tied to your real identity.
Facebook touts its ability to help companies hit a more relevant slice of potential customers by mining its incredibly deep data records, citing a deodorant campaign that got a 9% bump in sales after targeting women to receive its ads, and a wedding photography business that saw success when it focused ads at women in its geographic area who had changed their relationship status to “engaged.”
"We offer advertisers a unique combination of reach, relevance, social context and engagement to enhance the value of their ads,” the company said in the filing, pointing to its integration of advertising into its users’ daily routines so that ads are harder to ignore.
According to Facebook’s IPO, users now generate an average of 2.7 billion “likes” and “comments” per day, a huge trail of information that can be used to create marketing campaigns with a laser focus for maximum advertiser benefit.
Users have already seen this in the News Feed and with targeted ads, where the postings and campaigns you see when you log in have clearly been customized based on the Internet profile you’ve created through your choices. What you and your best friend see when you log in is completely different depending on what your Internet behavior is like.
Though users agree when they join Facebook that the site can store their data, it’s striking to realize just how much is being recorded.
Facebook gathers information about you every time you leave a status update, upload a photo, write a comment on a friend's post, search for a page or a profile, click on an ad, or use an application. If you are tagged in a post your location is indexed, as is the time, date and place of any photos or videos you upload.
The site can also track what kind of device you are on and what browser you use to access it, as well as the other web pages you visit if they are enabled with a social plugin such as a “like” button – which over 40 million sites have installed, according to the Telegraph. So even if you’re not on Facebook, you’re feeding it data.
The social network has taken heat in the past for its privacy policies – its motto of "move fast and break things" means it hasn’t always gotten changes right the first time, and has been slammed for site redesigns that made private information public without user consent.
Yet Zuckerberg insists his goal is to get the world to share more data, and in a personal letter included in the IPO filing, he stated that Facebook’s goal is “to make the world more open and connected.”
That’s confirmation of what many Facebook users have come to realize– you’re not the only one looking at your data, and your information is only becoming more public.
So what can you do to limit your exposure?
Check your privacy settings to limit who can see what you post and share on Facebook.
Keep your involvement on Facebook to a minimum - don't "like" things unless you want advertisers to know that information, and don’t log in to other websites through Facebook unless you want your every move recorded. Log out of your Facebook account when you are browsing the web, and clear your cache and browser history regularly so the profile you leave across the Internet is less complete.
And ultimately, get used to it – or get ready to quit Facebook.
Read more: http://www.nydailynews.com/news/fac...-private-data-article-1.1016946#ixzz1lPRS94AC
