Big Data, Big Insights, Big Issues, and Facebook: Part 1
As everyone probably already knows (but just in case you have been living off the grid for an extended period of time), Facebook is considered to be the largest aggregator of private individuals’ data in the world. In fact, they don’t just index the “habits” and personal information of each Facebook user, but at an aggregate level the habits and personal information of entire communities.
Everyone—the PatternBuilders’ team, analysts, social scientists, economists, statisticians, the list goes on—would like to get their “hands” on that data to aggregate it and cross-reference it with other data sets to produce unknown insights about “all of us.” And Facebook has been pretty miserly about sharing. Facebook has also been under fire about its seemingly cavalier attitude about users’ privacy, touting that transparency and openness is the way to go.
Paradoxically, the company operates as a black box. They make money (reportedly more than $2 billion a year) by selling ad space and marketing information about their users through the application of sophisticated analytics that provides extremely targeted information about buying behavior. Since they’re private, they don’t have to share any of this information (financial reports, etc.) with you or me.
And now the news that Facebook raised $500 million from investment bank Goldman Sachs and Russian Internet investment firm Digital Sky Technologies. This deal now puts the value of the company at $50 billion. (Really—go here for analysis on why you shouldn’t try and buy a share anytime soon.)
Now, the most interesting part of this story is how the deal is structured and a certain foreign investor. I have been thinking about this all day, trying to figure out how I was going to work this into my original post (which has become Part 1 of two posts on this topic) and then I came across this “most excellent” article from Robert X. Cringely. If you haven’t already, you should read it and once you have, you might be asking yourself the following:
- Since Facebook’s $50 billion valuation is based on your data, shouldn’t you be making some money too?
- Just how “private” is your Facebook data?
- Why doesn’t Facebook provide aggregate versions of its data set to help “the greater good?”
- Who owns your Facebook data and what are they doing with it?