Photo Credit: picjumbo
Just think about everything that Facebook knows about you – it knows your basic demographic information (age, gender, geographic location), where you went to school, where you work, what you like, and who your friends are. It also knows what you like to see in your news feed, how often you go online, and what types of events in your life you consider to be important.
That’s just the beginning of what Facebook knows about you, since it is constantly creating platforms – such as Facebook Messenger released in 2011 – to keep you safe within the Facebook world at all times. If anything, the rise of mobile means that Facebook has even greater influence on your daily life. Just as Google owns the desktop, Facebook owns the mobile device.
Can Facebook be trusted?
Of course, Facebook’s unprecedented access to the details of our daily lives has led to increasing concerns that it might have negative implications for personal privacy. Facebook knows more about us than just about anyone else – including the federal government. Every time Facebook makes a change to its privacy policy, people go bonkers, convinced that the company has finally gone too far.
In any dystopian scenario, Facebook would become the perfect mechanism for keeping track of a nation’s citizens – simply enable the feds to have backdoor access to Facebook, and they would know an uncomfortable amount about you and your friends.
Of course, it’s hard to think of Facebook as some kind of Orwellian Big Brother because, well, Mark Zuckerberg still seems like a little brother who just dropped out of Harvard. He’s now part of the Silicon Valley crowd that’s trying to empower people and break up Big Business and Big Government, right? That’s what Facebook wants you to think, of course.
OK, but do you trust Wall Street?
At the end of the day, though, Facebook is a publicly-traded corporation with shareholders who want a return on their investment. Like it or not, Facebook has to pay attention to Wall Street. And that means consistently delivering results, quarter after quarter. Not just a profit – but a consistent pattern of growth on a non-stop basis.
And that’s where things get interesting, because have you ever thought about how Facebook makes money? Think about it – do you pay Facebook anything for the privilege of using the app daily? Do you pay any kind of service fee for sending out endless Facebook messages? Do you pay a tax for blasting out live video?
No, the way Facebook makes money is via advertising, and the way it makes this money is by monetizing its users. The more Facebook knows about you, the more effective its ads are. And that means the more willing advertisers are to buy those ads. It’s easy to argue that Facebook has built the world’s greatest advertising platform, and it’s just getting better over time, as more and more pieces start to fit into the broader Facebook platform.
However, over time, Wall Street is going to place more and more pressure on Facebook to squeeze out even more advertising dollars. And that’s going to make things harder on Facebook, and perhaps force it to make some uncomfortable choices. It’s easy to grow at 10% per year when you have 1 million users, but what about when you have 2.89 billion users? No wonder Facebook is trying to expand to the developing world – where else is it going to find that annual 10% growth?
As media theorist Douglas Rushkoff once suggested back in 2011: “Ask yourself who is paying for Facebook… We are not the customers of Facebook, we are the product.” That’s even more true today. So the question is not whether we trust Facebook, it’s really a question of whether or not we trust Wall Street. And that, unfortunately, is a much easier question to answer.
