Users beware: Facebook is big business for a reason
Oct. 5, 2010 at 5:05 a.m.
"The Social Network," a movie that recently premiered, offers an interpretation of the history of Facebook.
Normally, a movie would not be of much interest in a business column. However, this one is different, or at least Facebook is different.
Thousands of people in the Crossroads, and millions worldwide, have Facebook accounts - and the number grows each day.
I knew Facebook had the potential to be truly different when my 78-year-old father got a Facebook page.
The manner with which this idea has transcended generations has been impressive, if not unbelievable.
On a global scale, Facebook has become a portal by which people nationwide and worldwide share every minute detail about their lives. We can catch up with old friends from high school or college. We see pictures of grandchildren at their first birthday. We immediately know of the successes and failures of friends and family worldwide.
And unfortunately, some people tell us about every boring aspect of what they just ate and the gastrointestinal problems they encounter with digestion. The only limitation of what is on Facebook is based upon your typing abilities.
So what does this have to do with business?
Recently, Forbes magazine listed Mark Zuckerberg, Facebook's founder, as having a net worth of $6.9 billion (yes, with a "b"), an increase of $4.9 billion just in the last year!
I'm a bit confused. When I set up a Facebook page I didn't pay anything. When I post something on Facebook I don't pay anything. How is it then that Zuckerburg could possibly be worth this much money?
Someone is obviously paying Facebook - but who and for what?
If you follow the money you will quickly determine that Facebook is not some kindly charity helping us reconnect with old friends. Facebook is all about making money. At its heart, Facebook has morphed into a data mining company. And once they have data, they turn around and sell it.
Most of us know that if we go to a search engine such as Google to research "big screen TVs" the world now knows we might want a new TV. Amazingly, we start getting ads on our computer for TVs. This is how search engines make their money. They sell information about our searches.
Facebook is no different except that the amount and type of information people share is much more personal and detailed. We think nothing about telling people where we are traveling to and how long we will be gone. We tell about romances, post pictures and names of children and share some of our most intimate thoughts.
Just remember, when you do this, Facebook will sell your information. Every posting or random comment you make will be sorted, categorized, analyzed and sold to a variety of people and organizations. Some of them just want to sell you something. Others may not be nearly as up front or honorable in their intentions. Consider the safety and security of your home and family.
So the next time you think about posting something on Facebook, remember that, based upon Zuckerberg's net worth, your information translates into big dollars for others.
Buyer beware. When you post, you are being watched by the world - not just your "friends" on Facebook.
Dave Sather is a Victoria Certified Financial Planner and owner of Sather Financial Group. His column, Money Matters, publishes every other Wednesday.