Saturday, August 15, 2015

Facebook Should Pay All of Us - The New Yorker

From a Facebook reality check by Tim Wu (I ran across the article on Facebook...)

"Since the late eighteenth century or so, there have been three main business models in the entertainment and media business: selling content, selling advertisements, or both. Some media are predominantly driven by payment (books, movies, and Netflix), others by advertisements (Google and broadcast television); while some rely on both (cable, newspapers, and magazines). Along with the classic models, since the nineteen-nineties or so there has been a fourth way: giving your customers stuff in exchange for their personal data, which you then use to make money. Facebook is not the only company that operates this way but it is the champion, widely assumed to have more data than anyone else. That data is useful for advertising, which is Facebook’s main source of revenue. But the data is also an asset. The two-hundred-and-seventy-billion-dollar valuation of Facebook, which made a profit of three billion dollars last year, is based on some faith that piling up all of that data has value in and of itself. It’s like a virtual Fort Knox—with a gold mine attached to it. One reason Mark Zuckerberg is so rich is that the stock market assumes that, at some point, he’ll figure out a new way to extract profit from all the data he’s accumulated about us."
Facebook Should Pay All of Us - The New Yorker
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