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Facebook Reaps Billions from Your Data: It’s Time to Unplug

By: Yaël Ossowski - @YaelOss - May 20, 2014, 9:43 am

Español On May 18, 2012, Facebook, the world’s most popular social networking website, was taken from the hands of the programmers and innovative entrepreneurs and thrust into the world of Wall Street.

Facebook en Nasdaq
Facebook’s 2012 IPO was valued at $104 billion. Source: ProducerMatthew

The small technology start-up turned massive Internet property debuted on the New York Stock Exchange valued at $104 billion, the largest amount ever for a new public company.

Two years later, Facebook is one of the most valuable brands of our time. And why not?

It connects you with friends you’ve made across the globe and loved ones from afar. It’s become a dominant and intricate part of practically every web user’s online life, serving as a primary organ for written communication, sharing photos and articles, and outreach for so many companies and organizations.

It’s useful for hundreds of millions of users, and the market has rewarded its founders generously for their ingenuity.

But while such a feat may be commendable — especially for a small company created in the dorm rooms of Harvard University not more than 10 years ago — the time has come for users to unplug from Facebook.

Facebook advertising
Facebook made over US$2.27 billion in revenue in the first quarter of 2014 from advertising alone. Source: YouTube.

Actually, “user” is probably the wrong word. Data subject volunteer may be more accurate. Because, let’s face it, that’s Facebook’s business model.

It sells you, your information, your connections, your likes, your photos, your surfing habits, and all the intimate information you think is just between you and your Facebook crush in the chat box.

Facebook’s entire business is based upon selling the “largest database of people ever built” to potential advertisers. It’s how the site reaped US$2.27 billion of the total $2.5 billion of its total profit in the first three months of 2014, according to its latest public report.

It’s why, according to an analysis by Mashable and Statista, each global average user now has the value of $2 per quarter. A US American or Canadian is worth a bit more, at $5.85 per user. Europeans about $2.44. The individual user is the product.

Facebook average revenue per user
(Statista)

While some have banked on the site’s megaphone to draw in interested users, smaller pages haven’t been able to reap all the rewards.

A tweak of the newsfeed algorithm in December of 2013 limited smaller companies’ reach by as much as 88 percent, according to several analyses. Only pages actively posting paid advertisements were favored, while small pages lost their edge. Considering the lucrative partnerships in the works, it’s safe to say Facebook is leaving the little guys in the dust.

In February of 2013, Facebook teamed up with a host of powerful data aggregating agencies to match data “gathered through shopper loyalty programs to individual Facebook profiles,” according to Advertising Age magazine. This means Facebook has access your shopping cart in the local grocery store or drug store as much as the one online. Did you read that in the Terms of Service? Probably not.

Ever notice how recent Google searches magically show up as ads on your newsfeed just minutes later? Thank Facebook’s budding collaboration with companies invested in a new level of “targeted advertising,” crawling your custom searches and purchasing habits online and offline.

Top that off with location data logged from smartphones, by which 59 percent of Facebookers receive their personalized ads, and the reach of history’s most colossal collector of data is virtually unrivaled. But the story doesn’t end there.

Mark Zuckerberg
Facebook’s unique position to collect untold amounts of data has long generated the interest of governments worldwide. Source: Reddit.

Fortunately, advertisers just want to bombard you with ads. Zealous government officials, on the other hand, have more severe methods for getting your attention — whether you like it or not.

In the last half of 2013, law enforcement made 12, 598 requests for Facebook data for over 18,000 users, according to Facebook’s government requests report. Over 80 percent of them were granted.

The most startling development surrounding the Edward Snowden leaks is not that governments have been seeking all types of digital information on individual citizens. It’s that private companies have voluntarily submitted untold amounts of data of individual users to the state, and perhaps even “direct access” to primary servers, as revealed by the alleged PRISIM program.

When The Onion put together a satirical news report in 2011 about Facebook as the “CIA’s most successful project,” it truly was stranger than fiction.

Thankfully, however, the Internet remains free. Users can unplug from Facebook whenever they like.

The social costs of this transition, as expected, are most likely very high. Most digital natives have migrated their social lives to Facebook. It’s where parties are planned, photos are shared, and knowledge is presented and discussed.

But while that’s the reality today, there’s only so long it can survive. As the transgressions mount and more people become aware of better alternatives to Facebook, which better safeguard their privacy, they’ll unplug as well. But why wait?

You can decentralize your online services immediately. There are alternatives such as TOR, BitTorrent Sync, and RSS feeds for readers to find and share information, far from the reaches of Facebook’s central servers. Digital currencies like Bitcoin use peer-to-peer networks in the same way to decentralize money and payments.

Early Internet-pioneer Dave Winer created Fargo outlines, which easily allow users to host and write their own blogs on a single web page. Similarly, the Freedom Controller, developed by Dave Jones and Adam Curry, combines the ease of reading news feeds with publishing your own thoughts and links in a simple format. No Big Brother involved.

The technology to replace Facebook and unplug completely is already here. We just need the curiosity to encourage it.

Yaël Ossowski Yaël Ossowski

Yaël Ossowski is a journalist, informational entrepreneur, and Senior Development Officer for Students For Liberty. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria. Follow @YaelOss and on his website Yael.ca. Read his featured PanAm Post column, "Question the Narrative."