100 GlobeAsia November 2012

Technology By Jason Fernandes

acebook, a company that didn’t even exist a decade ago, just crossed the one billion user mark. With over a billion users posting

pictures, commenting, messaging and sharing web pages, the site could well represent a profound evolution in the human experience.

Over 140.3 billion friendships have been made or cemented in digital space, signaling a fundamental and irreversible shift in how society communicates in the 21st century. Whether these changes are positive or negative is still hotly debated. The fact remains however that people no longer expect the kind of privacy and anonymity they enjoyed just a few short years ago. Today, well into the age of Facebook, the question is worth asking: is privacy obsolete?

People who use the service have realized that it is for all intents and purposes a living organism that self-perpetuates and evolves as more people interact with it. While previously one would meet a person at a party and vaguely recall having met them before, in the age of Facebook a digital meeting will simultaneously result in a list of mutual friends, allowing both individuals to immediately place where they met, and through whom.

What was previously a vague human experience that involved fading memories and facial recognition is now instant and measurable in the digital world. A quintessentially human interaction is thus digitized and where advertisers relied on word of mouth they now rely on Facebook ‘likes’.

Because these digital interactions all take place on Facebook, the massive accumulation of data is a boon to businesses. Advertisers have learned that a recommendation from a friend or even acquaintance carries much more weight than most ads ever could. This does bring up some controversial questions however, with privacy advocates asking: At what point does Facebook’s sharing of its users’ data become intrusive? The Facebook model itself is inevitably at odds with information privacy.

In the recent past, Facebook has attempted to monetize its massive user base by introducing ad programs such as ‘sponsored stories’. The program ran afoul of California law as it used the names and likeness of users without compensation and without providing them a way to opt out of the program. On October 8 Facebook proposed a $20 million settlement to users affected by the ‘sponsored stories’ fiasco and offered users a way to refuse participation in the program.

The sharing of information and pictures between friends increases the value of the site to other users, resulting in more frequent visits to the site and a correspondingly greater audience for advertisers.

Advertising relevance Another ad product from Facebook, Social Ads, consists of brand-created messages appended with unique user information that serve to make the ad more effective. While Facebook doesn’t provide this personal information to advertisers, both advertisers and Facebook clearly benefit when users choose to engage with the network more often and/or on a deeper level, foregoing their privacy concerns along the way.

While Facebook is free for users, its ad-supported model means that advertisers are wholly dependent on user data to target their ads to the right people. This isn’t necessarily a bad thing for the average user because not only are ads based on their interests more likely to result in a sale for the advertiser, they also improve the experience for the end users who are not bombarded by irrelevant or out-of-context ads.

Companies realize that while the number of ‘likes’ their page receives is a good metric of brand recognition, it does not exactly give them data on how those ‘likes’ or ad views translate to sales. To address this issue, Facebook recently announced a partnership with Datalogix aimed at quantifying how often Facebook users view an advertisement on the website and then go on to buy the advertised item in a brick and mortar store. The plan involves tracking the purchases of over 100 million households at over 1,200 retailers.

If this all seems a little Orwellian to you, you’re not alone. Predictably both the Center for Digital Democracy as well as the Electronic Privacy Information Center have m

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Did Facebook kill privacy?

102 GlobeAsia November 2012

Technology

already requested the Federal Trade Commission investigate whether this is permitted in light of a settlement recently finalized by Facebook.

There seems to be a perennial tug of war between privacy advocates and Facebook. Facebook is constantly experimenting with new revenue streams and seems to be always running into criticism for privacy violations. The problem for the company is that it’s so popular that everything it does is minutely scrutinized. How does it continue to maintain its explosive growth and justify its huge valuation without alienating the very users it depends on to maintain its popularity?

For the folks at Facebook, there seems to be no easy answer to this question. Ultimately in order to survive, the task before them is nothing less than a complete change in the way society views privacy in the 21st century. Fortunately for Facebook, there is some evidence that this is already happening.

Concept of privacy is evolvingA 2011 study conducted by the Ponemon Institute for msnbc.com revealed that people’s views regarding privacy have been polarized just over the past few years. While five years ago most respondents felt that privacy was slipping way, and that it bothered them, today 36% said that privacy was less important. Surprisingly, the exact same number responded that it had grown more important. Why has the last few years resulted in such a binary view of privacy?

The interesting part of the findings was that the differentiator between the two groups was social media. The people who used social media were less bothered about the possible loss of privacy. The study indicated that these respondents had a lower expectation of privacy and views held by the other

36% might actually seem antiquated to denizens of the digital age.

We are entering a new era where given our fast-paced and increasingly globalized world, the only way for people to stay connected is through social media and users realize that social media is only as useful as they make it.

Of course it’s the very existence of the ads on the website that allow Facebook to exist at all. Most users know all this, and their continued use certainly indicates that they feel like this is an acceptable trade-off.

Founder Mark Zuckerberg appears to be well aware of these changing values. Indeed in an interview with Michael Arrington of TechCrunch a whole year before the msnbc study, Zuckerberg said “People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more and more people. That social norm is just something that has evolved over time.” Citing the popularity of blogs and “different services that have people sharing all this information,” he suggests that Facebook is simply going with the changing tide as opposed to making the waves.

A fair tradeThe idea of trading control for convenience is not a novel concept. Having a bank account or registering your bank account with a utility company for example has always required a certain degree of trust that the information will not be misused.

Like it or not, we depend on an intricate network of people including customer service reps, bank and company employees, essentially hoping for an unbroken chain of custody for our confidential information. Even given the safeguards, we are nonetheless aware that certain individuals are going to have access to financial information.

We relinquish our right to absolute

control in favor of the convenience of a bank account or automatic bill payment. In the digital world, things aren’t much different. People relinquish their right to privacy for the convenience of easily staying connected with their friends and family.

This is tumultuous new territory and everyday it seems like there is a new controversy regarding some possible new privacy violation. Eventually people will develop a more laissez-fair attitude towards non-crucial informational privacy while realizing they need to be more vigilant about more sensitive information they may want to avoid posting on social networking websites.

A delicate balance will have to be maintained wherein users are mindful that the value of Facebook is in how they interact with it. Similarly and by the same token, Facebook will have to learn how to maintain user privacy and not betray their trust while still maintaining a sustainable business model.

Privacy as we know it could well be an antiquated concept. We live in a world with a 24/7 news cycle and we are increasingly aware that nothing we release into the world is ever really private. Celebrities and non-celebrities alike constantly come across embarrassing photos and videos posted online by former friends and romantic partners.

Life in the internet age is a life lived under a microscope and the sooner society comes to grips with that, the sooner a new equilibrium can develop. Things will eventually settle and the boundary between what’s acceptable and what’s not will be more clearly drawn. Until we reach this ‘new normal’ however, we ought to strap in tight, because it’s going to be a long and bumpy ride.

Jason Fernandes is a tech commentator

and founder of SmartKlock.