Facebook chief executive Mark Zuckerberg is said to have passed satisfactorily two days of intense grilling by US lawmakers, who invited him to shed light on the data privacy scandal that has beset his global social network.
But the US congressional hearings were also able to touch on the vulnerability of the business model that his company has been using to earn billions of dollars from advertisements that run alongside our News Feeds and are aimed specifically at each of us who has a Facebook account.
Of course, we all know that Facebook is using our personal data to inform its advertisers who to target with their sales pitches. For example, when Facebook, through its use of algorithms and artificial intelligence, learns that we love shoes and clothes, rest assured that our Facebook page will be peppered with advertisements about shoes and clothes.
So information as simple as where we live, where we usually go, and what we do to have fun – as well as the websites we visit – can be used by companies to their advantage, either to sell us their products and services, try to convince us to support their causes, or for any other purpose.
That is why it was shocking to learn that a political consultancy, Cambridge Analytica, was able to gain access to the personal data of some 87 million people – including Zuckerberg himself by his admission – and used it without their consent to serve its business, which included working for the presidential campaign of Donald Trump in the 2016 election.
During his testimony on Capitol Hill this week, Zuckerberg, in answer to a senator’s query, said: “Yes, there will always be a version of Facebook that is free.”
His statement has been taken to suggest that his company has considered a paid version of its social network.
The senator who was asking him said Facebook’s chief operating officer, Sheryl Sandberg, had told CNBC that those who do not want their personal data to be used for advertising might have to pay for their protection.
But Zuckerberg said Facebook users have always had the option to prevent the use of their personal information.
However, the 33-year-old tech executive suggested that receiving non-targeted ads on their Facebook pages may be a worse, if more irritating, experience for Facebook users because that would mean they would be bombarded with irrelevant ads.
He also stressed that Facebook has always been a free service since it was launched because the company’s mission is to connect people all over the world.
So to maintain its service, Facebook has chosen to generate revenue by running targeted ads based on the users’ personal information and browsing habits.
In an ideal world, that is the best arrangement: Facebook users can chat with their friends, advertisers can target those most likely to buy their products and services, and Facebook can earn money by running their ads.
But that business model, which allowed Facebook to earn US$40 billion in advertising revenue last year, is now being questioned in the wake of the Cambridge Analytica scandal.
And as concerns have grown over the business of data collection, many users have expressed interest in a paid, ad-free version of the social network.
But tweaking Facebook’s business model is certain to have an impact on the company’s business outlook, and Zuckerberg, along with the other managers of his group, will have to carefully consider how it would affect its business and operations.
Facebook, of course, is not the only social media platform that Zuckerberg’s group is operating. Facebook also owns Instagram and WhatsApp.
So far Instagram users don’t have much to complain about ads, distribution of content, and data privacy.
One of the key differences between Facebook and Instagram is the sharing feature. Facebook users are able to share all kinds of content on the platform, while Instagram users can only post their own pictures and like those posted by others.
The absence of a sharing function may be one reason why Instagram could be a better social media platform, as sharing is a tool used by the company to tap advertising dollars.
Facebook users naturally want to have control of their personal data, but a paid version of Facebook may take some time before it becomes a reality, if ever it does.
In fact, Facebook does have a paid service called Workplace, which provides a communications platform for company staff. It is actually an outsourced version of a company’s internal email, an intranet platform.
Workplace is a communication hub for organizations to communicate and collaborate, a platform which can replace internal emails and distribution lists as well as intranet, messaging and visual communication tools.
Probably its most important feature is the fact that Workplace is completely independent of Facebook platform. So its users will not be pestered by advertisements and they need not worry about their data falling into the wrong hands.
Currently, more than 30,000 companies are using Workplace, making it an ideal communication tool for multinational corporations with staff all over the world.
Workplace is more like a closed-door version of Facebook. Access is limited to friends verified by the users; data cannot go to people outside the verified friends’ list.
The question, however, is whether users are willing to pay around US$3 a month to enjoy all of its features.
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