The Profits of Social Networking: The Internet’s Private Enterprise

Source: The Guardian Unlimited

On the internet, as elsewhere, information is money, and information is power. So why have we given it away so lightly?

Something extraordinary has taken place over the last few years. Voluntarily, and without coercion or, indeed, payment, internet users have handed over vast amounts of highly personal data – their preferences, where they live, who their friends are and what they do – to private companies, whose primary goal is to profit from that data. And every day, we hand over more, willingly.

On Facebook, we think we are sharing only with our friends the information – the news, the messages, the photos – that we place on “our” pages. But thanks to Facebook’s confusing privacy settings, users are propelled to default and “recommended” settings that make public almost everything – and in so doing, also permit Facebook to make use of your information. Yet more obscure are the complicated and multi-caveated user and privacy agreements most never bother to read. It is only here that Facebook admits that the content (your “intellectual property”) belongs to the company. They own it; once it’s on the site, you don’t.

Google’s professed aim, apart from its famous motto to “do no evil”, is to organise and share all the world’s information. Less loudly avowed is its parallel objective: to make large amounts of money from that venture. This is not a cynical view: profit is – and must be – the goal of all share-held enterprises. If Google did not promise good returns to its shareholders, its share price would collapse and it would cease to exist. (Facebook has not yet been floated on the stock market; it is widely assumed that it soon will be, for perhaps $50bn.)

Both Google and Facebook offer their services to users apparently for free. But the services are not of course free. Both companies sell the information that users provide – in search data, or personal profiles. In Google’s case, this takes the form of information about individual and collective preferences as revealed by people’s searches. Apparently, these companies mostly sell their (your) information to advertisers who mine the data in order to target consumers more effectively. But, despite fervent declarations about transparency, in fact, it’s very hard to find out exactly to whom they sell the data or what the “data miners” do with it. McDonald’s or the CIA? We’re not told, even though it is information about us that they are trading.

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