How Facebook Inc (FB) Is Getting Rich Using Your Personal Data


A Sherbit Blog posted on April 14th takes a closer look at Facebook’s personal data collection policy, and more importantly, what happens to your data after the social networker collects it.

How Facebook Inc (FB) Is Getting Rich Using Your Personal Data

Developing a “monetization engine” for Facebook Inc (FB)

Facebook Inc (NASDAQ:FB) has made some big moves to develop its web advertising business over the last couple of years. The firm bought Atlas, a large internet ad server that hosts around 10-15% of all internet ads. Google’s DoubleClick is by the far the biggest player, but the acquisition made Facebook Inc (NASDAQ:FB) the second biggest global web advertiser.

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Mark Zuckerberg gave his take on the Atlas deal: “We believe the Atlas platform will help us demonstrate even more clearly the connection between ad impressions and purchases. We could help marketers measure the effectiveness of their ad impressions better not just on Facebook, but across the entire internet.”

Of note, the Sherbit blog highlights that Facebook Inc (NASDAQ:FB) can use Atlas to correlate purchases with browsing behavior on non-Facebook sites. This also means that advertisers who are already working with Facebook can pay to get a more holistic view of their marketing campaigns across the internet. As the blog notes: “The goal is to develop an effective “monetization engine” for the social network: a smooth track between monitoring browsing behavior, delivering pertinent advertisements, and securing purchases.”

Facebook works closely with “data brokers”

The Sherbit Blog highlights that Facebook Inc (NASDAQ:FB) works closely with a group of companies called data brokers. According to data security expert Bruce Schneier, these data brokers: “collect demographic information: names, addresses, telephone numbers, e-mail addresses, gender, age, marital status, presence and ages of children in household, education level, profession, income level, political affiliation, cars driven, and information about homes and other property. They collect lists of things you’ve purchased, when you’ve purchased them, and how you paid for them. They keep track of deaths, divorces, and diseases in your family. They collect everything about what you do on the Internet.”

Opting out is often not a viable option

Representatives for Facebook Inc (NASDAQ:FB) and the data brokers often claim that they have policies in place where individuals can opt out from data collection. However, according to the Sherbit Blog, the process of opting out is frequently cumbersome and often really accomplishes nothing anyway.

Moreover, given the necessities of modern life, opting out of these services completely to protect your privacy has problematic consequences. It’s hard to get a job these days without an e-mail address, and very difficult to keep up with childhood friends without social media.

Last but not least, it’s not clear how much opting out actually protects your privacy, especially given opting out of data brokers such as Acxiom doesn’t change the fact that your data has already been sold. The blog also notes that data brokers often buy or license data from one another—which as a Ars Technica points out, “This would effectively allow them to serve as each other’s backups… If a consumer requests deletion from one, the broker can comply and then re-request what it has already shared to its fellow brokers.”

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