Facebook is the social platform that allows people to connect with anyone around the world through this social media platform (Laudon, 2017, pg 159). The users create their profile where they can share their photos, videos, interest and other information that represents them (Laudon, 2017, pg 159). However, Facebook actually collects all the users’ information and shares it to advertisers and thus it benefits the social networking site (Laudon, 2017, pg 159). The advertisers attract the users based on the information they shared for example age, education, or specific interests (Laudon, 2017, pg 159). The CEO of Facebook, Mark Zuckerberg, repeatedly mentions that individuals want to be more open to the world but it is uncertain if this is the true case. Facebook requires the world to be open and connected to increase the revenues (Laudon, 2017, pg 159).
Facebook’s business model is completely based on aggregation and how it distributes the users’ information. The social platform is free and therefore it convinces people to create an account where they share all their information. Since Facebook can gather, save and analyze the data which allows it to sell targeted advertising (Laudon, 2017, pg 160-161). In other words, Facebook’s business model is privacy.
Facebook has encountered many controversies while developing into a successful company. Unfortunately, it did not warn the users that they could manage the information they shared with external parties. For the people, Facebook hypothesized that they had the users’ consent to gather their information through Beacon, the company’s advertising service only if they did not utilize the “opt-out” feature (Facebook Beacon, 2019). The service established the “opt-in” feature available where the users could completely disable it but surely the company did not control the extend at which the service violated the privacy of the users (CBC News, 2009).
When Facebook introduced the Sponsored Stories feature, the same chaos occurred (Laudon, 2017, pg 160). For the organization, a considerable weakness is that Facebook users do not feel safe sharing their information but the advertisers rely on that information. Many users have tried to delete their accounts however they had to get help from watchdog groups (Laudon, 2017, pg 160). For the technology, Facebook underestimated the users’ privacy needs when it introduced Beacon, because it shared data about the users they had not voluntary agreed to share (Facebook Beacon, 2019). This service originally had the “opt-out” feature and although users used the feature, the service still sent data to Facebook nonetheless the users’ activity on their account (Laudon, 2017, pg 160). Even though users deactivated their accounts, Facebook does keep the information of the users (Laudon, 2017, pg 160).
In my opinion, Facebook cannot have a successful business model without invading privacy. Facebook is a social network website which allows its users to communicate with others. It is one of the largest and growing social networking sites in the world. They have the opportunity to find their friends, communicate with them and use different applications on it. The main focus of the business model is to generate revenues and profits so as more people register, the brand image grows. High schools, colleges and universities have used Facebook as a way to communicate with the students about school activities and other useful information therefore, more students join it. The effectiveness of the collection of data is what determines Facebook’s growth potential because the more data it collects, the more advertisers it attracts. It is clear that Facebook depends on advertisement because it the principal source of revenue.
- CBC News. (2009). Facebook shuts down Beacon marketing tool. Retrieved from https://www.cbc.ca/news/technology/facebook-shuts-down-beacon-marketing-tool-1.832698
- Facebook Beacon. (2019, February 04). Retrieved from https://en.wikipedia.org/wiki/Facebook_Beacon
- Laudon, K. C., & Laudon, J. P. (2017). Management Information Systems: Managing the Digital Firm (15th ed.). Pearson