(Second in a series.)
The Register quotes security guru Bruce Schneier saying: “Facebook is the worst [privacy] offender – not because it’s evil but because its market is selling user data to its commercial partners.”
Facebook’s business model is to guide advertisements on its site toward users based on their interests as revealed by data about them. It is not to sell data about users. Selling data about users would undercut its advertising business.
It’s easy to misspeak in extemporaneous comments, and
The Register is not your most careful media outlet. But we’ve almost got enough data points to show a consistent practice of misrepresentation on Bruce Schneier’s part. Perhaps that should be actionable as an unfair or deceptive practice under section five of the FTC Act.
I’ve just released a new PFF white paper looking at the hysteria that has often accompanied major media mergers and then taking a look at the marketplace reality years after the fact. Here‘s the PDF, but I have also pasted the entire thing down below.
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A Brief History of Media Merger Hysteria:
From AOL-Time Warner to Comcast-NBC
by Adam Thierer
Although the pending union of Comcast and NBC Universal has not yet made it to the altar, Chicken Little-esque wails about the marriage have already begun in earnest. For example, the pro-regulatory media organization Free Press has already set up a website to complain about the deal.[1] And Jeff Chester, executive director of the Center for Digital Democracy, has called it “an unholy marriage.”[2] The fever only promises to spread once the deal is formally announced, and a lengthy fight over the deal is expected at the Federal Communications Commission (FCC) and whichever antitrust agency reviews the deal.[3]
But reality tends to play out somewhat less dramatically than the script penned by the media worrywarts. It’s worth looking back at some of the more prominent examples of media merger hysteria in recent years to understand why such panic is unwarranted, and why a deal between Comcast and NBC Universal is unlikely to lead to the sort of problems that the pessimists suggest.[4] Continue reading →
Somewhere between Nick Carr’s “Typology of Network Strategies” and Chris Anderson’s “Four Kinds of Free” is the secret to understanding our new economy:
Carr’s “Typology of Network Strategies”:
- Network effect
- Data mining
- Digital sharecropping, or “user-generated content”
- Complements
- Two-sided markets
- Economies of scale, economies of scope, and experience
Anderson’s “Four Kinds of Free”:
- Direct cross-subsidy (get one thing free, pay for another)
- Ad-supported (third-party subsidizes second party)
- “Freemium” (a few people subsidize everyone else)
- “Gift economy” (people give away things for non-monetary rewards)
Of course, both Carr and Anderson are building on theories and business models previously articulated by many others. A few that come to mind:
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