Facebook is not your friend: a word to the wise

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In which Ashish Kundra, bringer of news from around the net, passes on a friendly warning.

facebookA few months ago, Microsoft handed Facebook a $240 million wad of cash. Microsoft’s new equity boosted Facebook’s estimated value to $15 billion (by comparison, that’s three times Monster.com’s market cap of $4.8 billion). At the moment, Facebook’s ad revenues don’t come close to a $15 billion dollar value, so there’s something up their sleeves that we probably don’t know about. We do know that they will be racing to justify that ambitious valuation by doing some more edgy—and profitable—stuff  Here are a few things I’ve noticed or heard of unfolding on Facebook.

Newsfeed Owns You: The newsfeed was designed to increase the time of the average visit. Clearly, increasing this number means is directly increasing ad revenue. And guess what? Just weeks after launching, Newsfeed doubled the average visit time for Facebook users. Hot damn. Makes you wonder how they do it?

The content that shows up on your Newsfeed is selected to keep you on the site. That means, either you have found these people interesting in the past, or other people have found this stuff really interesting. Think about it next time you login. The people you stalk will probably show up more often than not.

Gifts are for charity. For now. Facebook invented the notion of a virtual gift and has done extremely well with it. For the time being, it seems to be all for charity, but Facebook’s intentions are far from philanthropic.

When you buy a gift for a dollar (or buy an ad), you have the option of saving your credit card info with your account info. This is a BIG DEAL. Heard of Amazon’s One Click Checkout? I am sure we will one day see Facebook-sponsored stores like GAP complete with a One Click Checkout. Gotta stay fly.

Skimming off the top
: Speaking of Amazon, Facebook got in bed with the company on its Marketplace Book Exchange. When you fill in the ISBN of whatever book you are looking for, Facebook readily points you towards a link to Amazon. This is because they see anywhere from 4% to 10% in referrals from that book you purchase.

Targeted Advertising:
Every 10 or 20 times I log in, I see the same Facebook ad for Union Square Ventures – a venture capital firm based in New York. A technology VC firm would probably be smart enough not to waste time advertising to all the kids at Columbia. But this is the perfect example of Facebook’s recently-launched advertising platform: in my profile, “start ups” is listed as one of my interests. And since Facebook is getting paid per click, they allow advertisers to target their ads with user’s personal profile content. It’s kind of like Adwords–but we’re talking about our personal information here.

What are these applications about? Be careful when you install an application. It is too easy to install an application, you’re giving away a lot of information, and the application developer can pull all of your personal data from your profile. They can also pull a ton of data from your friends’ profiles. And here’s the real danger: anyone can develop a Facebook application and launch it. There are sites that will even do it for you. So with a decent application name and a cute picture, a developer could compile a lot of personal data very quickly, which can be used for all kinds of identity theft. And since it’s an open platform, Facebook cannot place any technological constraints on this data (they do place legal constraints on it, however).

I think we will eventually see a lot of really useful applications developed. For the time being, a lot of cheesy applications aim to gain tons of users and sell their adspace. Others want to make money through less legitimate ways—this one gets paid every time they get you to download a worm that will then send information from your desktop to advertisers.

Takeaway point: as much as Facebook “friends” aren’t necessarily real friends, Facebook itself is no pal either. Treat it like the acquaintance you enjoy once in a while, and watch out for its tricks.

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  1. this

    is good advice.

    a bit paranoid, but totally right on.

  2. Very well done

    Kudos to you, Ashish.

    Now, let's wait and watch what the trolls have to say about this.

  3. wtf

    What is "c.r.e.a.m.," why is it a tag, how does it reference anything in this article??

  4. why is this  

    article's author frequently stoned?

    he's been smoking a wee bit too much ashish!

  5. you see ads?  

    sucker. use adblock.

  6. C.R.E.A.M.

    is Cash Rules Everything Around Me.

    and it is relevant to everything, all the time.

    Listen to the Wu, fool!

  7. Ashish,  

    well done man, well done.

  8. this

    is why i have no facebook applications. It's scary how much info you can grab with only a rudimentary knowledge of programming.

  9. shocked

    facebook's newsfeed works to show me the stories that i'll probably be interested in?!?!? and it advertises things to me that i'm probably interested in too?!?!? this is awful!!!! I hate it when a website uses information that I give it to direct my attention towards things that I've told it I like...what assholes.

  10. annoyed

    oh great job bwog! such investigative reporting!

  11. you guys

    comments 10-12, are idiots. people are selling your private information without your knowledge and using it to sell you even more things. that's not cool! why would you criticize someone for pointing that out to your dumb ass? you clearly don't understand how important this is to know.

  12. Fuck

    Facebook. Deactivate your profiles and keep in touch through phones and e-mail. I feel free.

  13. ...

    ashish is for hashish ;)

    just messin with you buddy haha

    • ...

      but a follow up for people who don't know the author...... he's a fucking genius who is eventually going to have one of his business ideas take off after which you will all be working for him... the dude runs marathons

      • meh  

        "he's a fucking genius who is eventually going to have one of his business ideas take off"

        If he does, will he try to make a profit?
        running marathons =/= success in business. A lot of unsuccessful people run marathons.

  14. fyi

    the "gifts" were only for charity during the first month (when the $$ went to the Susan B. Komen foundation). Now I believe they're for profit.

  15. Cool Man

    when does school start again? the 22nd?

  16. i see it like this  

    yeah sure, the beacon stuff is really kinda creepy. but beyond that, the targeting stuff is no more evil than what gmail does. same level of privacy invasion, just more data and perhaps a bit more sophistication.

    do i really care what is done in with my data in _aggregate_ form? not really. this sort of data collection and analysis has been going on for decades. do i care if they use my personal data as an input for an algorithm for selecting ads and or personalizing stuff? no, not really.

    the only time i'd care would be if they started selling off my data with personal information attached. i really don't think they think they could get away with that. they'd be caught and humiliated in the court of public opinion in no time flat.

    also, i don't see why you care about credit card numbers. if you're worried about facebook using credit cards as a personal identifier of sorts for exchanging data with third parties, don't be. visa, mastercard and amex all have very strict rules as to what credit card numbers can be used for. sharing credit card transaction data and using card numbers as unique identifiers across merchants is expressly prohibited.

    that said, i do agree with the general sentiment of your article. while facebook may appear to be friendly, they are indeed a business. and a business run by a self centered egotistical jackass from harvard at that (putting your name at the bottom of every webpage... come on now.). it's unfortunate, zuckerberg is such a tool he's giving west coast tech entrepreneurs a bad name.

    ps. my profile has no mention of startups, but i see that vc firm ad all the time.

  17. interesting

    This piece is very informative, but what about the REAL Facebook problems??

    1. Getting invited to events by friends at schools that are absolutely nowehere near where you are.
    2. Invitations to be a virtual zombie, vampire, werewolf, pirate, or any other sort of mystical being.
    3. That Facebook allows the creation of groups such as "Columbia [Newest Freshman Class Here] is ready to party!!!!" Yes, they are highly amusing, but at what cost?!
    4. Gifts of eggs that hatch things that do not normally come from eggs. And most other gifts. Why would you send me a crescent roll?? If you were really my friend, you would get me a real crescent roll. Now that's charity. Just sayin.

    Most of these have more to do with bad friend etiquette than with Facebook itself. Still, it would be nice if Facebook took a stand against bad friend etiquette someday, because sometimes defriending people is not an option.

  18. meh

    don't have a facebook. when is this internet fad going to end?

    • It'll end

      when the cell phone and bottled water fads end

      • damn


        anyway, you can always take this article further into the creepy by posting excerpts from facebook's terms of service:

        "By posting User Content to any part of the Site, you automatically grant… worldwide license (with the right to sublicense) to use, copy… and distribute such User Content for any purpose…. You may remove your User Content from the Site at any time...If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content."

  19. "Anonymous"  

    "And since Facebook is getting paid per click, they allow advertisers to target their ads with user's personal profile content. It's kind of like Adwords--but we're talking about our personal information here."

    Umm... nothing is personal or private when you share it will 300 of your closest "friends" on the Internet. If you don't want the ads, unplug your computer.

  20. wow

    i actually didn't know a lot of that information, especially about the newsfeed targeting. neat story.

  21. chyea

    no wonder the person i've been stalking shows up so much on my homepage?!
    article was sick. thanks

  22. Anonymous

    This article definitely brings up a good point, but as many other commenters have noted, this is certainly not limited to facebook. Google has long been controversial for targeting its users, but it provides a much better user experience. I appreciate that the news feed adapts to my stalking habits, just as I am constantly impressed at the ads I get in my gmail. As for the Amazon thing, that's pretty standard as well- you can't get mad at facebook for what has now become standard practice.

    Really, when it comes down to it, any information you put on a web page is not safe. Even if you don't share it with others, somebody else can.

  23. Paul Knegten

    Nice post!

    Regarding the application that lets you make Facebook apps; just to clarify: it allows you to make an app that brings content or functionality from an external website into Facebook, not the other way around. Developers using the Dapper Facebook AppMaker have no access to any information about the users installing their apps (and nor do we, for that matter).

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