The cover story in the latest Technology Review, “What Facebook Knows,” provides a glimpse into the work of Facebook’s “Data Science Team,” a crack group of software and social science experts who are mining the enormous pool of data that the service has collected, in search of “insights that they hope will advance Facebook’s business and social science at large.” Even though the article focuses on the science side of Facebook, it can’t escape the business side, returning at the end to the challenge the company faces to generate “new sources of income to meet investors’ expectations.”
If current analyses are correct, Facebook won’t be able to generate the profits it needs from advertising alone. The ad business is constrained by members using Facebook from mobile devices. They have less patience to be interrupted by ads and less space on which to see them. The business may also be constrained by regulators (and members) who see Facebook’s need for more personal data as an invasion of privacy.
The Tech Review article, however, hints at another business model that could offer a way around these constraints:
[Greylock Partners scientist DJ] Patil points out that Facebook could become a data source in its own right, selling access to information compiled from the actions of its users. Such information, he says, could be the basis for almost any kind of business, such as online dating or charts of popular music. Assuming Facebook can take this step without upsetting users and regulators, it could be lucrative.
Traditional consumer surveys are expensive, and as the Pew Research Center found, becoming more difficult to conduct, leading to even more expense and less accurate results. It makes perfect sense for Facebook to offer their data as a better (and cheaper?) alternative to telephone polls and other traditional methods.
But what to do about the users and regulators? Here’s a suggestion: if you want to sell my data, give me a piece of the action. Facebook already treats its members as “the product being sold,” so why not take the next logical step and include us in the value chain? Facebook annoys members and regulators, I think, because of its secrecy and unclear policies, and not the data collection and sharing itself. Here’s a chance for Facebook to come clean, and present a clear commercial proposition to members: you give us permission to sell your info, and we’ll give you cash.
This idea is not really new. Consumer research companies already pay people in the US and other industrialized countries to participate in focus groups and other studies. Jana recruits thousands of consumers with mobile phones in developing countries to participate in surveys and marketing campaigns, in exchange for mobile minutes and coupons. Why should Facebook be any different?
What do you think? Would you agree to share more on Facebook and get paid for it? Or could this turn you off to the service completely?