Facebook’s fundamental business model is about selling people’s information: Gerry Baker


MARK ZUCKERBERG, ANSWERING CRITICS THIS MORNING IN NEW OP-ED, FACEBOOK CEO WRITING OP-ED IN THE JOURNAL, THE FACTS ABOUT FACEBOOK WRITING, QUOTE, WE DON’T SELL PEOPLE’S DATA, IN FACT, SELLING PEOPLE’S INFORMATION TO ADVERTISERS WOULD BE COUNTER TO BUSINESS INTEREST. WE HAVE STRONG INCENTIVES TO PROTECT PEOPLE’S INFORMATION FROM BEING ACCESSED BY ANYONE ELSE. JOINING ME JERRY BAKER, GOOD TO SEE YOU.>>GOOD MORNING, MARIA. MARIA: YOUR REACTION?>>FACEBOOK HAS BEEN UNDER TREMENDOUS PRESSURE, THEY HAVE BEEN CALLED OUT IN A NUMBER OF WAYS THAT HAVE BEEN EMBARRASSING, THE STOCK IS DOWN HUGELY, EVERYTHING THEY DO TO TRY TO REPAIR THIS SEEMS TO MAKE IT WORSE, WHAT HE’S TRYING TO DO, HE’S CRYING TO RESET AND SAY, LOOK, HERE ARE BASIC FACTS ABOUT THE COMPANY, ALL OF WHICH ARE TRUE, NOT NECESSARILY ALL OF WHICH ARE THE MOST RELEVANT FACTS, YOU KNOW, WE DON’T SELL DATA, WE DO OUR BEST, TAKE PRIVACY SERIOUSLY, THE REALITY IS BUSINESS MODEL IS REVENUE GENERATING MODEL THAT DEPENDS ON THE ABILITY OF ADVERTISERS TO REACH THE PEOPLE WHO USE FACEBOOK. MARIA: ALL THE DETAILS ABOUT YOU. NOT SELLING THE DATA?>>THEY DON’T HAVE TO KNOW EVERYTHING. THE UNIQUE ABILITY OF FACEBOOK IS THAT IT IS SO LARGE, THE SCALE OF IT REACHES SO LARGE, THE NUMBER OF USERS, IF YOU’RE ADVERTISER AND YOU’RE TRYING TO REACH PARTICULAR SEGMENT OF AUDIENCE, YOU DO IT THROUGH FACEBOOK, FACEBOOK IS DOING ADVERTISERS ACCESS, THERE’S NO WAY AROUND THAT. THEY CAN PUT PRIVACY PROTECTIONS IN. THEY CAN ENCOURAGE USERS IF THEY WANT TO PROTECT THEMSELVES BY OPTING OUT OF CERTAIN SERVICE THAT IS THEY USE, BUT THE FUNDAMENTAL BUSINESS MODEL IS ABOUT SELLING PEOPLE’S INFORMATION, SELLING ACCESS TO PEOPLE’S INFORMATION TO ADVERTISERS WHO ARE WILLING TO PAY A LOT OF MONEY. MARIA: HOW CAN YOU SAY YOU’RE NOT SELLING DATA WHEN IN FACT, THAT’S WHAT ADVERTISERS ARE PAYING FOR?>>THEY DON’T ACTUALLY TAKE THE DATA AND SELL IT TO THIRD PARTY, WHAT THEY ARE DOING IS SELLING ACCESS TO THE PEOPLE TO THE USERS THEMSELVES TO THE ADVERTISERS, SO THEY ARE NOT ACTUALLY TAKING THE DATA AND SELLING IT BUT THEY ARE GIVING PROFILES ESSENTIALLY THEY ARE — BECAUSE THEY HAVE SO MANY USERS, ADVERTISERS WILL CHOOSE TO ADVERTISE TO PARTICULAR GROUPS AND THEY CAN DO THAT THROUGH FACEBOOK BECAUSE THEY HAVE SO MANY PEOPLE. MARIA: LADIES IN NEW YORK, THAT’S THE BUSINESS, SELLING DATA. IS THAT SELLING DATA?>>WHAT THE DEFINITION IS IS. YOU CAN — MARIA: EXACTLY.>>YOU CAN SAY YOU’RE NOT SELLING THE DATA, THE REALITY IS YOU’RE SELLING THE ACCESS. FACEBOOK’S PROBLEM IS NOT PEOPLE RECOGNIZE THEY’RE SELLING THE DATA, IT IS ALSO WON THE WHOLE ARGUMENT ABOUT CENSORSHIP AND SOCIAL CONTROL TRYING TO DECIDE WHAT’S PERMITTED SPEECH BECAUSE IT FITS POLITICAL AGENDA VERSUS A VERY DOUBLE STANDARD IF YOU’RE A CONSERVATIVE AND WHEN YOU START SEEING WHAT’S GOING ON IN COUNTRIES LIKE CHINA WHERE IT WAS RECENTLY REPORTED, FOR EXAMPLE THAT IF YOU DON’T HAVE ENOUGH FIT BIT STEPS YOU DON’T IMPROVE SOCIAL STANDING AND GETS DETERMINED BY THE GOVERNMENT AND WHAT YOU’RE NOT ABILITY TO ACCESS SOCIAL MEDIA BUT ALSO TO TRAVEL, TO HAVE CERTAIN JOBS, PEOPLE ARE STARTING TO REALIZE THAT THERE IS A PRICE TO ALL OF THIS DATA BEING ACQUIRED IN TERMS OF WHERE THEY ARE, WHAT THEY ARE DOING, YOUR PHONE IS NO LONGER A PHONE, IT’S A TRACKING DEVICE, WE ARE USING WAYS — MARIA: BY THE WAY, EVERYTHING YOU’RE SAYING, EVERYTHING YOU’RE SAYING IS MAKING ME THINK ABOUT CHINA BECAUSE THAT’S EXACTLY WHAT THEY DO IN CHINA, YOU’VE GOT YOUR OWN SCORE AND WHEN YOU BEHAVE EITHER INCREASE THE SCORE OR DECREASE THE SCORE AND DICTATE WHETHER OR NOT YOU CAN GET ON A TRAIN OR ANYTHING.>>A BIT OF A LEAP — WHEN YOU SIGN UP FACEBOOK YOU’RE SIGNING UP VOLUNTARILY. FACEBOOK DOESN’T PUNISH YOU. BUT, YEAH, IF ANYBODY — IF ANYBODY HAS A DIGITAL PROFILE THEY ARE AMASSING DATA ABOUT THEMSELVES AND HANDING DATA ESSENTIALLY OVER TO POWERFUL ORGANIZATIONS, COMPANIES AND OTHER THINGS. THAT IS A FUNDAMENTAL PROBLEM. YOU KNOW, WE ARE ALL GRAPPLING WITH THIS, EUROPEAN UNION INTRODUCED THIS THING, GDPR WHICH WE ARE FAMILIAR WITH, THEY HAVE TO HAVE CERTAIN RIGHTS AND THEY ARE ABLE TO PROTECT THOSE RIGHTS WHENEVER THEY ARE USING, WHENEVER THEY ARE ACCESSING WEBSITES OR OTHER — OR OTHER FORMS OF CONTENT, BUT IT IS A HUGE — THIS IS A MASSIVE PROBLEM, WE ARE ALL ESSENTIALLY NOW, ALL OF OUR INFORMATION, EVERY TIME — ALL OF THE INFORMATION THAT WE PUT OUT THERE IS COLLECTED, IS AVAILABLE AND IT’S — AND PRESUMABLY SOME DAY BE ACCESSED.>>THE OTHER THING THAT FACEBOOK CEO ZUCKERBERG IS RESPONDING TO COLLEAGUES TO COME OUT AGGRESSIVELY AGAINST THIS, YOU HAVE EVERYBODY FROM TIM COOK TO JIMMY, WE DO NOT SAVE YOUR DATA, WE DON’T DO ANY OF THIS, POINTING THE FINGER BASICALLY SUGGESTING THAT FACEBOOK DOES IN FACT, DO THIS AND SELL ACCESS.>>THERE’S NO QUESTION.>>THIS IS THEIR BUSINESS MODEL.

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