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On 18th May 2012, Facebook Inc. went public with an IPO (Initial Public Offering) of about $US100 billion. There was a lot of fanfare and hoo-ha and writing in the press. Comedians had a field day, the Twittersphere resembled a flock of Red-Billed Quelias foraging for food, and the rest of us just went about our normal lives. But did you give a thought to what the Facebook IPO means to you, the Facebook user?

When you are a super-large, global, public corporation, your financial imperative is to be profitable and to make your shareholders money. How does Facebook make money? After all, it’s free to all of us, to use when and how and where we like (well, not everywhere we like it seems), so the profits are not coming from us, right? Well actually, they are, kind of.

Facebook makes money by selling us, its users, to marketers and advertisers and data collectors. They want to know what we like, where we go, whom we see, and what we think of ‘stuff’. And we all readily give this information to the great Facebook machine. We Like a great variety of different things on Facebook, and clicking that <Like> button doesn’t just tell your favourite Paris restaurant that you like them, it also tells Facebook, and Facebook then sells that information to its clients.

But aren’t we Facebook’s clients? When it comes to Facebook, if you aren’t paying, then you are the product, not the client.

Facebook follows you not only when you are logged in to Facebook, but everywhere else you go on the web too, gathering information about where you go, what you look at, and where you check into. You can minimize Facebook’s ability to track you by[1]:

  • Opening Facebook in a separate browser window to the one you use to browse the web with.
  • By logging out of Facebook before browsing the web.
  • By not checking the Keep me Logged In box on the Facebook Log In screen.
  • By using the Safari browser rather than the Internet Explorer browser.

It collates all this data about you and it sells it to people who want to sell you something via adverts on Facebook.

If an advertiser of say, top of the line lingerie wants to advertise on Facebook, they know that not all of Facebook’s 900 million+ users are going to be part of their target market. Using the information that Facebook has about its user’s demographics and preferences, an advertiser can pinpoint the users that are most likely to respond to its advert.

Have you noticed those ads on the right-hand side of your Facebook page? Have you noticed how, if you have mentioned a certain holiday destination a lot in your status updates, or if you have Liked pages pertaining to holiday travel or places, or services, that those banner ads feature a lot of adverts for holiday related businesses?

Notice how some of the ads on the right-hand side feature the word “Dive”.

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This is called Predictive Marketing, and whilst it seems kind of cool and efficient (after all, it means you don’t have to see ads for things you would never use, and you do see ads for things that interest you), Facebook takes it to a whole new level with the whole of web data it collects on you, and is going to have to do so more ferociously now it has to feed the hungry wallets of its demanding shareholders.

Facebook has to keep its advertisers happy and stop them from jumping ship like General Motors (GM) did.[2] In order to achieve this, it’s going to have to make its ads more effective, and to make its ads more effective it’s got to gather more information on you, and to do that it has to get you to give out more information. And Facebook is the master at getting you to give up your data, often, without you even knowing you’re doing it. It’s sneakier than a New York gossip columnist.

One of Facebook’s disquieting new features is frictionless sharing. This means that applications can post status items to your Facebook timeline without your intervention, or opt in. The privacy danger of this is that you may accidentally share a page or an event that you did not intend others to see. Examples of these types of applications currently making the rounds on Facebook are video applications like Viddy and Chill. You may have seen posts in your Newsfeed saying something like “John Doe just watched a video “Three-headed zebra born in Japanese zoo”.” Now imagine if the topic of the video you watched was something you didn’t actually want all your Facebook friends to see? By just clicking on the video, the application can publish your activity on your news feed.

Also, I noticed recently when I looking at a page I had Liked – Sea Shepherd Conservation Society – that the right hand panel showed activity from one of my Friends who had posted something about Sea Shepherd. Every time I go back to the Sea Shepherd page, there is a different post from one of my Friends, or from me, in this panel.

We can see in the right-hand panel that my Friend posted about Sea Shepherd on the 6th January. This panel changes every time I come to the Sea Shepherd page.

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What Facebook is doing here is encouraging you to look at what your Friends are posting and become more interactive on Facebook. Which means that Facebook can gather more data about you. An inactive or non-interactive user is useless to Facebook. We can only guess what Facebook will come up with in the future to encourage us to give up more and more information about ourselves, our likes, wants, tendencies etc. Given Facebook’s somewhat shady history with respecting its user’s privacy, and its tendency to change privacy controls without notifying its users, we need to be more conscious of our actions on Facebook, and more informed about setting our privacy controls.