Facebook has worked every angle to make money off its current 300 million non-paying users. Every possible bit of information on anyone on the site is fair game to be commercialized by some company, advertiser or application developer.
Anyone’s profile photo, for instance, can be used in advertisements that aren’t even generated by Facebook. A particularly disturbing ad shows you several of your online friend’s photos, gives them bogus IQ scores and dishonestly claims that they’ve all asked you to take an online intelligence test. Facebook seems rooted in an ideology of social openness, especially when it comes to sharing with marketers.
Has this privacy-invasive strategy worked? On Tuesday, Mark Zuckerberg announced on the Facebook blog that the company had become profitable, which wasn’t expected until 2010. In July, Reuters reported that Facebook would make about $500 million in revenue this year — approximately $2 per user at the time. It’s unclear what the estimate is now.
In 2006, MySpace made about $200 million for about 100 million users.
Every online business needs time to grow before “turning on the revenue” — Twitter is maybe the hottest product in the world and for now, it makes no money.
Turning a profit from a free Web site is notoriously difficult. But it seems that Facebook’s sometimes sneaky ways of avoiding privacy restrictions might be responsible for its better-than-expected financial success.
Almost any feature on Facebook is designed, with great business sense, to keep users online for as long as possible — more time online equals more ad revenue. Every single new profile on Facebook with a stated age over 18 is mostly public by default.
Photo albums on Facebook are viewable by everyone, unless you change the settings manually. Even with some privacy settings, a photo album with a few dozen people tagged could almost certainly be viewed by several thousand people. Do you have any photo albums without maximum privacy?
It’s likely that perhaps 100 to 1,000 strangers would recognize your name and face, or maybe a few personal details if your page isn’t private.
With the recently-added “highlights” feature, it only takes one friend to give feedback on something — a photo album, for instance — for the post to become visible to every single one of his or her friends.
For instance, a few of my Facebook friends are friends with my previous bosses, professors and other authority figures. One comment, “like” or tag from those friends, and almost anything I’ve uploaded can be viewable. Multiply the number of comments and tags by the number of unique friends, and one album can be seen by thousands of people.
Of course, this feature can be sidestepped with maximum privacy settings, though many opt out of those to share with their friends’ friends.
Facebook’s possibly money-driven decisions to limit our profile privacy are ones we can immediately feel the effect of — and maybe it will one day be socially acceptable to tell a new acquaintance that you already know of them through Facebook.
Facebook’s success endorses targeted marketing and limited personal privacy as a serious online moneymaker.
Facebook uses up insane bandwidth — more than 850 million photos and eight million videos are uploaded daily.
But the site’s privacy-invasive strategy works. In place of user fees, detailed user information is enough to make a profit. Which is a bigger cost to you?
Reach Matt at matt.culbertson@asu.edu.
