Chances are you have a Facebook account and spend most of your online time posting banal status updates and sharing pictures of yourself in a pile of your own vomit, organizing your social life or discussing your cat’s sleeping habits. Harmless fun, you might think. But let’s face it: Facebook feverishly collects data about you and all your friends… and makes a lot of money with it.
Germany, with its unique experience of two totalitarian Big Brother regimes in the last century, is especially vigilant when it comes to keeping an eye on the Googles and Facebooks of this world. Last spring, Consumer Protection Minister Ilse Aigner publicly announced she was deleting her account to protest Facebook’s dodgy privacy policies.
In his new book Phänomen Facebook (“The Facebook Phenomenon”; Verlag Carl Ueberreuter), Austrian journalist Jakob Steinschaden takes an in-depth look at the economic and social effects of the social media Goliath.
What’s your main criticism of Facebook?
My main criticism is that users, more or less without realizing it, disclose a lot of data about themselves, and that Facebook does big business with this information, whether it’s who your friends are or your political views.
What kind of information, exactly?
Everything from demographic information – your level of education, for example – to political or religious views to opinions about certain brands. A lot of brands have their own Facebook platforms now.
How does Facebook make money from this information?
Through targeted advertising. On Facebook, you can target your ad so specifically; you can tighten the noose so much. If you know a person well, you can create an ad that is tailor-made for that person. Here’s a well-known case: some students were discussing their upcoming trip to Finland on Facebook, and suddenly they started getting Finnair ads in their profiles. You feel pretty monitored when that happens.
Doesn’t Gmail work the same way?
The Google email system works a little differently. Google ads are based on keywords, whereas Facebook is based on personal data and preferences: what my favourite country is, where my relatives live, how much I earn and so on.
But don’t you think most people are aware of all this?
Companies that offer services for free have to make money somehow… I wouldn’t say that the masses really understand what’s happening to their personal information. They might notice that there’s an ad banner… Interestingly, Facebook ads don’t actually work that well. At least in the German-speaking world, where they appear on the right side of the page: most people’s attention is focused on the news feed, so the advertising doesn’t really get noticed.
So I don’t think Facebook will be able to survive just on advertising revenue – Google is still advertising king. I predict that they’ll be making more money from Facebook credits, which you can currently use to buy virtual goods. It’s likely that in the future Facebook and developers will offer all kinds of online services that will be paid for using these credits.
Your book also addresses the societal consequences of Facebook and other forms of social media – the case of Megan Meier, for example, who committed suicide after being cyberbullied. On a more psychological level, don’t they also turn us all into narcissists?
Californian social psychologists Jean Twenge and Keith Campbell found that the number of people exhibiting narcissistic behaviour in western societies rose from about 15 percent in 1982 to 25 percent in 2006 – these are people who post a lot more photos online, write more updates, publish their opinions publicly. It’s a problem for them, because they become more vulnerable, and they’re a problem for other people, as well. Facebook users often want to get as many friends as possible, to get as many “Likes” as possible, so there’s social pressure there, too.
So how does the future look? Will Facebook become more and more dominant, possibly even replacing email? A lot of people don’t use any other websites, because they have everything they need there: they have their social contacts, they have their news links, their events listings.
You could call Facebook the “internet within the internet”. Now a lot of companies don’t even have their own websites, they only have a Facebook page. There’s also a chat function. In the end you don’t really need email any more, because you can send messages. If Facebook gets a billion users [right now it has 500 million], I’d say it will become more important than email, which is currently the most important online communication tool. The main difference is that email is an open platform; it’s offered by many different providers. Fifteen years ago we thought the internet would offer us the great diversity of the world. But with Facebook, I don’t have to get my information somewhere else. So I’m primarily in contact with people who share the same interests and opinions as me…
Does Facebook have any serious competition? What about Diaspora, the open-source social network programmed by hackers in New York that is supposed to launch any day now?
I think Diaspora will probably remain something for insiders, bloggers and so on. But maybe in a few years, Facebook will get boring, because everybody’s in it, and something like Diaspora might become more attractive…
When users are logged in, doesn’t Facebook share their profile data with other sites they visit?
That’s Facebook Personalization. So far, it only works for three websites: Pandora Radio, Yelp.com and Microsoft Docs. If you’re logged into Facebook and visit these sites, a lot of data is automatically forwarded to them: demographic data, your friend list and so on. So on Yelp, you can instantly see the restaurants recommended by your Facebook friends.
What about Facebook’s new localization service, Facebook Places, which has so far been launched in the US, the UK and Japan?
The way it works is that, if you’re logged in from your smartphone, you can allow yourself to be located. This location is then entered into your Facebook profile, and not just all Facebook users, but all 1.8 billion internet users can see your location. And what I find most worrying is not that you can publish your own location, but that you can publish other people’s as well. For example, if I go to a club and see three of my Facebook contacts there, I can, once they have given me permission once, publish their position without having to ask them again. This is going to be a really sensitive issue once Facebook Places launches in Germany because the issue of privacy is far more sensitive there than it is in the US. Facebook knows it’s playing with fire.
Many people in their twenties don’t really care about data privacy.
Nobody reads Facebook’s terms and conditions. Especially a teenager. You can always just say, “Nothing’s going to happen to me.”
So where is it all going? Are we heading towards total surveillance?
A service like Facebook Places is already more or less a virtual time clock. But let’s see what happens: people might end up having enough of it, once they see they might become a victim of it… I think it’s good that German politicians are addressing the issue. ‘Internet’ should be a subject taught in schools.
FACEBOOK AT A GLANCE
Active users Circa 500 million
Users in Germany Circa 10 million
Average number of friends per user 130
Minutes per month (all users) Over 700 billion
Minutes per day (average user) 55
Estimated revenues in 2010 $1.1 billion