Let Facebook be a data hog. User centric thinking will win in the end

Facebook is under fire, this time over data portability. A lot of debate is going on right now, but few address, in my opinion, what is the real issue. More on that further down the post, first a short overview and some comments.

Jason Calacanis has given Facebook a final warning this weekend and is now preparing for a (tech blogging) war. In his post called “The wonderful horrible life of Facebook users and their data (or, ‘data hogs get slaughtered’)” he lashes out to Facebook.

He starts with:

All of this comes up because Facebook has done three things that are at once extremely innovative, extremely rude, extremely helpful, and extremely disconcerting:

1. They are collecting and republishing user data on a level not before seen by users.
2. They are allowing advertisers to use this data to reach these users.
3. They are not giving this information–information that has put their value at $15 billion–back to their users.

He goes on and focuses the rest of his post mainly on the problem of Facebook collecting data, but not giving it back to the user:

Facebook is pushing themselves into a position of being viewed as ungrateful data hogs: amassing tons of information, selling it under false pretense, and not sharing it with the folks who gave it to them.

Not good.

You can get away with this kind of behavior for a short period of time, but not for the long run. There are just too many folks out there like Doc, Dave Winer, Marc Canter, Robert Scoble, Steve Gillmor, and Leo Laporte out there today who will call you on it.

Again it comes back to bloggers and their influence of the marketplace… I love it. 🙂

The message from bloggers to Facebook is clear: if you’re a hog you’ll be slaughtered. 

His post, triggered by Doc Searl, started a series of responses making the topic end up high on the TechMeme list. Jason addresses some valid points, but Frederic, from the Last Posdcast, downsizes the rawl noting that Facebook users don’t seem to care about data portability or Facebook trying to monetize that data.

FactoryJoe has written an excellent post on the subject of data portability. He writes about the Citizen centric web (he has written about it before, look it up on his blog):

This notion is what I think is, and should, going to drive much of thinking in 2008 about how to build better citizen-centric web services, where individuals identify themselves to services, rather than recreating themselves and their so-called social-graph; where they can push and pull their data at their whim and fancy, and where such data is essentially “leased” out to various service providers on an as-needed basis, rather than on a once-and-for-all status using OAuth tokens and proxied delegation to trusted data providers

In response to the commotion Nick O’Neill from AllFacebook writes:

If I choose to use someone else’s service and enter data into it, they own it. That’s why I call it “someone else’s service.” If you want to own a bunch of data, go create your own service and get people to use it. Suggesting that Facebook let a user export all of their data in XML or CSV format as Jason Calacanis suggests, is slightly ridiculous. I can understand having ownership of my own social graph but that’s where it ends. Even that would be a huge step for Facebook.

……

In theory this makes a lot of sense but personal user data is a competitive advantage for many services. If a user invests hundreds of hours rating movies, books or anything else, they aren’t going to want to go somewhere else. Letting users own their data will force competing sites to compete on services alone. This could be a good thing but it also could be a bad thing when the technologies developed by many of these sites are ultimately commodities. Letting users own their data could be the downfall of many web 2.0 sites.

Oh boy, Neil, either you don’t get it, or your defending a lost cause. You feel threatened by customers that want to own their own data? I wonder what Neil would do if he knew an insurance company is sponsering his local supermarket and analyzing all his buying behavior to see if Neil has the optimal insurance package. And when Neil finally decides to go for a new health plan he gets the “What’s up with the unhealthy food you bought last weekend…..?” treatment. Fear is a lousy motive for defending a flawed business model. Who cares f it is the downfall of many web 2.0 businesses. They probably aren’t providing true value, otherwise there wouldn’t be a downfall.

I think that data ownership, portability and privacy are all sub problems of one main issue. The one issue that doesn’t seem to get addressed as much as I would hope it to be. The issue is not data, the issue is Facebook’s faulty business model.  If you are going to provide a “web 2.0” service for free you need other ways to earn revenues. Someone has got to pay for all those servers zooming and that data being transferred. The current web 2.0 free (but ad-ased) business model is the easy way out. But I have noted before that it is fuelled from the wrong side. It isn’t based upon user value. It is based upon network and ad monetisation. And although this can be a perfectly legitimate business model in some cases it doesn’t work in social networking. It has a few major flaws that make it a terrible business model:

1. It enforces walled gardens because ad revenues must be protected. If you are “on” the network, Facebook makes a living, if you are “off” they don’t
2. It enforces network value thinking (or social graph if you prefer a more sophisticated term) not user value thinking
3. It provides the user no value, and it provides the advertiser an illusion of value
4. It spoils the user, thinking everything comes for free, thus making business models that are based upon value creation hard to implement

I could make this list longer if needed, but the point is that the fundaments of the business model are not based upon user value or user centric thinking.  I don’t agree with the idea that the user doesn’t care. Of course he cares. But right now there aren’t serious alternatives for Facebook or MySpace. And because they protect their data so fiercely the user is trapped into a $ 16 Bln advertisement trap and is unable to get out. I have called out for a revolution before, to get out of this trap, but I wonder if that is really needed now.

What we need now is people that think user centric. People that build and invest in user value business models. Models in which the user pays for value, thus ruling out the need for a flawed advertisement business model.  You know it is the right business model, because it inherently solves the”who owns the data” problem. Data portability would be a standard asset of the business model, as would be privacy controls, and user value services.I’m not against advertisement, there are $20 Bln reasons to get advertisement right. 

I say we leave Facebook alone to do its thing. Let them exploit the user and make a living out of advertisement. If the user doesn’t care? Fine, let them be. Let us then work on a new web, a user centric web in which the user gets value, controls his data and privacy, and in which he is willing to pay for it. Let’s see how long any walled garden can survive once the user finds out there are much better alternatives around!

Maybe Howard Linzon predicts it right when he says:

But, we can count on this ‘who owns my data issue ‘ to be resolved much quicker now that Facebook has to monetize. Tempers will continue to flare and something is going to give.