Today, Time ran an article claiming that Facebook Inc (NASDAQ:FB) should be paying users for their information, rather than being able to sell that info on to advertisers. The article focused on the current model of online commerce, where services are free and users’ information is theirs for the taking.
The author of the piece, Jaron Larnier, a computer scientist who has risen to prominence by writing works such as You Are Not A Gadget, which questions the assumptions built into the online world as it currently manifests, offers a different model for online companies that would see them have more respect for users’ data.
Larnier wants social networks like Facebook to pay users for their information. He proposes a system of micro-transactions that would see Facebook Inc (NASDAQ:FB) pay for every piece of data that a user gives it. The idea is an interesting one, but there is no offer of a path toward its consummation.
Right now information isn’t valuable to people, but it is incredibly valuable to companies like Facebook Inc (NASDAQ:FB). That’s because information isn’t economically valuable in small amounts. You can’t make money from most personal data unless you have a huge amount of it. A single user, by definition, only has a tiny amount, almost useless to advertisers like Facebook Inc (NASDAQ:FB).
Facebook Inc (NASDAQ:FB) and its competitors like Google Inc (NASDAQ:GOOG) are paying customers, and Larnier is well aware of that. The problem is that most users assume that the services they get from these companies is free. It is patently clear that there’s no such thing as free when dealing with multinational corporations.
Users sell their data to Facebook Inc (NASDAQ:FB) in order to use the company’s services. That’s how the internet works from the consumer perspective. Larnier wants to make information worth something, and that is certainly a noble goal, but it would seem to require an entire bottom up rebuild of the entire web. The vested interests don’t want to see that happen.
Consumers don’t seem to have any problem parting with information if they are receiving a service in return. The internet didn’t start this business, it’s been around since newspapers at least. The internet has improved its efficacy thousands of times however, and that has resulted in huge checks for those at the top. Facebook Inc (NASDAQ:FB) has little reason to change, something will have to push it.