It’s still unraveling, but the story of facebook and data sharing has captured the attention of its users and Wall Street alike. It seems that personal data was shared in many ways which violated facebook’s own policies and privacy laws in some states and nations.
Step back for a minute, however, and we can all see how much worse the problem is. From the Clinton hacked email scandal through this to even more revelations to come, it is very clear that every single thing online has to be treated as if it is public knowledge. There is no privacy.
One of the great attraction of social media and other internet companies as an investment is that they seem to be magic money machines. There is very little capital required to start one, and all the equipment or storage space can be rented. They are highly scalable. They can attract incredible numbers of people who provide their own data in a handy form which often allows direct targeting.
They are, however, nothing more than advertising media. In that sense, they still appear brilliant because production costs are very low compared to, say, broadcast television. There is no news hole to fill. Very little staff is required to keep them going, meaning that operating costs are also very low.
That’s how it seems, at least.
Consider the early days of any new industry. Oil rigs in the ground, building cars, television – pick an industry that was created by advances in technology and started out shiny and new one day. They all seem like money machines. The opportunities are unlimited when something is new.
Then, the customers demand more. It can no longer be janky and crude. Liabilities come in as workers or customers are hurt. All kinds of costs start rising as the industry loses the veneer of “newness” and has to conform to highly professional standards all around. It can no longer be fast and loose.
Facebook, as a company, is famously impossible to get in touch with by a small advertiser. Their staff is highly overworked and cannot substantially review any complaints about content. Any other advertising medium would never get away with any of this.
They are also woefully unaware of what happens on their own platform. A recent investigation by CNBC found another company, CubeYou, was doing pretty much the same thing as Cambridge Analytica. When presented with the results of CNBC’s investigation, Facebook shut them down. But they appeared to either not know a thing about it or were entirely complicit in the operation.
It was probably ignorance. Ignorance is how facebook makes money.
Jennifer Brown, aka Redhead Ranting, wrote a must-read piece regarding how her client information was clearly shared by facebook. More importantly, she only discovered it when it was used in a way that she never would have allowed, sold to another company with a product to sell. Confidentiality is critical in the writing world, but not to facebook. They have no problem selling everything, regardless.
How big is the problem with any and all social media? We see email hacks every day, so the logical conclusion is that everything online is not protected in any way at all. And if that bothers you, then we have to write laws and enforce them or boycott facebook until it achieves a much higher standard for protection of personal information.
Either way, it all gets more expensive. Social media companies will not be fly-by-night operations. They will have more staff that will spend more time holding hands and complying with either regulations or requests. They will no longer be a magic money machine.
The progress of this is like absolutely every new industry defined by technology that you can name. And if you think that the oil industry or television are boring that is precisely where social media companies need to go. Rock solid, reliable, professional, stuffy, and boring.
Barataria has said for over ten years that banking should be boring, and for at least five that insurance should be boring. Social media should be boring, too, it seems. But ask the kids under 18 and they’ll tell you – cat videos are already really, really boring.