For years, people wondered how Facebook was going to make money. Sarah Lacy grilled Zuckerberg about it at SxSWi. Now no one can decide if they deserve a $12 billion valuation or $100 billion. Some suspect that with today’s data breach, the business model is opening up our private data.
Think about it this way: imagine you have an ever expanding nightclub. Right now, over 500 million people come to your club, and 250 million of them come to your club every single day. One of the hottest startups, Groupon, has spread the word about their service almost exclusively by advertising in your club.
Not only do 250 million people come to your club everyday, 70 percent of them engage in some sort of game or act of commerce with others. If they pay money to do so, you get 1/3 of all of it. One of these game makers is Zynga, and they just so happen to make 50 freaking million dollars at your club. Each. Month.
I bring up these points not to say that Facebook’s privacy settings aren’t a bit creepy and worth noting, but to suggest that perhaps they have other means for making money and that it is very much in their own self interest to protect private data to keep users happy and dumping money into FarmVille. I’ll even go so far to say that today’s breach of data pulled from third party apps was an accident.
What do you think? Is Facebook opening up third party apps to sell our data to the highest bidder?