I guess time will tell if Facebook can deliver everything it promises.

Lots of discussions lately about online privacy lately, fueled in great part to missteps by Facebook and what they’ve been doing with user data. People are getting worried about what happens with their data and really, if it’s even still their data. And with more and more data being put into the cloud, we’re certainly be asking this question for a while. To be clear, I’m talking about information about adults. Once you start talking about kids, you need a very clear privacy policy in place.

Do people not realize that companies have been gathering information about them and selling that information to other companies this for years? When I worked for the Arts Council back in Orlando in the mid-80’s, I would call a list broker and tell them what I was looking for and they would get it for me. If I needed people making over $100K/year, who lived in a certain zip code and who attended the symphony and I’d get a list.

I wrote this in 2001 piece called "The Real Privacy Issue:"

See, I think we’re dealing with the wrong question. While we certainly need to protect privacy online, I think that we should be focusing our efforts on how can we bring a value to the consumer that translates into a better online experience? What will make the consumer feel as though everyone just called their name when they walked in? How can we create an experience where the owner comes out to greet each visitor and thanks them for being there, while pointing out that they know what the consumer likes?

Right now, we all know that the focus of gathering information from the consumer online is for our value, not their’s. Sure, we pretend it’s for them, but everyone knows better. Is it really a consumer value proposition that we can give them targeted ads? Is getting unsolicited e-mails about products that are similar to something they’ve purchased a value proposition for the consumer? No, of course not. It’s a value proposition for us. If you look at how we generate revenue online, how much of it comes from the gathering, use and sale of consumer information?

For decades credit card companies and others have been tracking and compiling information about where we go and what we buy. Use your loyalty card when you shop and there’s another level of information that’s collected and compiled about you. And maybe it’s just been happening so long that we don’t think about it any more, but they’ve been selling that information for years. Remember, I was buying it back in the mid-80’s. What’s really interesting about this issue is that we actually pay for the service of credit cards and yet we still allow them to sell our data. Not hearing many calls to boycott Mastercard or Visa. Well, not for selling our data at any rate.

And I know that we’ve gotten really used to be business model of free, but I don’t think it’s sustainable. Eventually, the business model of free runs up against the business model of I have to pay my rent. Things have to be paid for. So, either sites like Facebook will need to move to a subscription model or they’re going to need to make money by selling advertising. They can’t support themselves by giving away a service to 400 million people for free.

There certainly seems to be a generational divide on the issue of privacy. During a presentation at my daughters school about school supplied computers, one of the 6th graders remarked that there really wasn’t privacy any more, so why worry about it. Had a great discussion 2 years ago at SXSW about whether it was a generational thing or where you were in life. The same 6th grader who says privacy doesn’t matter today might be a 40 year old in the future who is concerned.

To a great extent, this free issue was created probably 15 – 20 years ago, when the internet was in its infancy and frankly most content providers didn’t see the internet as a viable delivery tool. They were thinking was what the hell, for the 10 people who use the internet, sure, we’ll give our stuff away for free. They didn’t have the foresight to see what the future could hold and once you start to give things away for free, it’s pretty hard to stop.

There’s an old expression that there’s no such things as a free lunch and that’s still true today. Are you willing to pay for Facebook? Can we really keep expecting online companies to give away their product forever? Eventually, someone has to pay for that lunch.

So I’m torn right now. I’m not willing to pay for Facebook and that means I have to be willing to give them a revenue path somewhere else. If Facebook offered a paid version where all of your data was kept away from advertisers, would you do that? If so, how much would you pay for that?

I’m not really sure we can continue to complain about lack of privacy when we’re unwilling to pay for the service. So maybe that’s the solution for Facebook. Give people the option of paying and see how people react then.

Ponderings” href=”http://blog.polinchock.com/2009/09/the-real-privacy-issue–pool-summer-2001.html?p=2″>The Real Privacy Issue- Pool Summer 2001 – Polinchock’s Ponderings.

Image source: Archie McPhee Seattle