The China Vortex

There has been a lot of talk lately about valuing social networks and Facebook's management knows that, which is why they try to track everyones' activities across the Internet with Facebook Beacon.

There has been a lot of discussion
if/how/when/who Facebook will acquire a social network company in China. As usual, I will jump out to offer my often contrarian views on social networking.

Let me put it this way, I don’t think that there is a way to value social networks, even though this is what advertisers would very much like to see happen. And the reason that social networks cannot be valued in a top-down/corporate/advertising way is because they are entirely subjective and dynamic according to each individual at any given moment in time.

That’s why it makes much more sense for each individual to assign a value for _access_ to his network, and anyone who wants to access it has to pay an access fee. If you don’t like the access fee, then don’t pay. If you like the fee, pay, and you will get access.

It’s that simple. Nobody owns the network except me. Not Facebook, LinkedIn, Google or anyone else. I own my relationships, just as you own your relationships. They only exist on Facebook insomuch as I’m active on Facebook now, but that is no guarantee that I will be there tomorrow.

That is why it doesn’t matter if Facebook owns all my data; if I no longer go there, it’s dead, out-of-date data. My data is only valuable as long as I’m active there.

I talked about the idea before, let me fill it out some more.

Here is my problem with Facebook’s Beacon:

1. If Facebook wants to track my activities across the Internet, they should explicity ask me first, and give me an opt-out option.
2. If I say “Yes”, they should ask me how much I want to be paid for access to my network activities on a 24-hour basis
3. I go in and set my fee for 24 hour access beginning immediately and click submit.
4. Facebook’s servers churn and return “yes” or “no”. If “yes”, they will be directed to my payment gateway. After confirmation, Facebook will say something like “Thank you for giving Facebook access to your network activities for 24 hours. After 24 hours, the cookie installed in your browser will automatically expire. (More blahblahblah from corporate and legal departments.)

In this model, each user has control over his/her activities, and is paid for access to their data by each social network.

Now wouldn’t this be a much better world than the current free-for-all where everybody is playing “Let’s screw the users and see how much we can get for free?” The current valuations on social networks are based on not paying users for access to their data.

How would you value social networks if they had to pay users for access to their data?

And since the Internet is all about pushing power to the edge, then why shouldn’t users have the power to earn money from having their activities and relationships tracked?

It would be great to hear what Seth Godin, Dare Obasanjo, Dave Winer and Robert Scoble have to say about the idea.

UPDATE: It’s been three hours since I posted this article, and I wanted to see if Facebook had imported this article into Facebook Notes so that I could tell my Facebook friends about it. (I have set Facebook to automatically import my posts here.)

Guess what? Facebook has not imported this article. Now what have I done to get that kind of treatment? I seem to have some recollection about “empowering users” and all that stuff.

Charming. Did their PR and marketing people go to the “Khmer Rouge Charm School of How to Win Friends and Influence People”. I guess I should be so grateful to Facebook and their management where they can watch all our moves and try to monetize it without passing anything down to us dumb users who haven’t figured out the shill yet.

I’m a great believer that if you fail, you should fail fast. In this respect, Mark Zuckerberg and his flaks have done a great job in record time. Mark, what are your chances now that you will hit that 15B valuation?

Scott Karp has written a great piece “Facebook’s Crisis Demonstrates That People Matter More Than Technology”. Be sure to read it.

Technorati Tags: , advertising, beacon, China, corporate, dareobasanjo, davewiner, facebook, management, robertscoble

Scott Karp had an excellent article about how Facebook’s Beacon messed up and created such a reaction from Facebook users.

My explanation for Facebook’s policy re Beacon is that all the press, plus a 15B valuation on a company which does not have significant cash flow will get management to adopt all kinds of dumb user-privacy violating tactics to justify the valuation in the hope that the company can garner significant ad revenue.

In short, Facebook’s Beacon policy of spying on users’ activity across the Internet was a panic move…

Some hokey marketers get so wrapped up in the data that they can garner that they forget a lof the information is, frankly, useless.

“Look! We can target albino 16-year old Chinese boys who play more than 20 hours on the PS3 in Nome, Alaska during the winter and who had the Nintendo Wii recommended to them on Overstock by a friend in Wichita, Kansas!”

Now, many have put forward basically a Bill of Rights for users, and user control of their own data. Dave Winer has said that the user should be able to control how his/her data is used, right down to being able to to keep a copy for him/herself.

Giving the user control over his data? What a revolutionary idea! (There I go again…)

I think that there is a simple and elegant solution which will take some hard work and years to perfect.

Here it is: Why do consumers have to give their data for free to advertisers and be only consumers? Why can’t consumers be advertisers too? And why can’t they be credited or paid for advertising products/services they like? In return for being paid/tracked, they would give up their anonymity. Should they want to become anonymous again, they can do so, and they would not be tracked. But they would not be paid. If they wanted to become tracked/paid again, they could do so. Anytime. Anywhere.

In this scenario, the user would control what ads he wanted to receive in his user profile in real-time; this could be done with a system of checks or tags or something else. To opt out of “auto ads”, just to use an example, all he would have to do is uncheck it.

Basically, the user is selling his attention information to the advertisers. I look at it another way; the user is selling his time to advertisers to get data; relevant advertising data will be deemed useful and passed on, while irrelevant data will not be used and will not be passed on, and will be treated by the user as spam. In return for passing meaningful data to another prospect or customer, the first consumer should be reimbursed with money for exposing his data, and making a meaningful referral which eventually results in a sale.

And so on and so forth. Here is the trade: Give us your name, identity and user info, and let us follow your activities, and we will pay you. You can opt out anytime, and you will not be paid.

Simple.

I have always wondered why consumers are always treated by advertisers as consumers, when in real life, people have multiple roles such as father, husband, son and manager, or mother, wife, daughter and VP, just to use a few examples. So why should people only be consumers? Ask people for their data, then pay them for it.

That’s what I call a fair trade.

Now, if Facebook did that, that would be really something. And if Facebook doesn’t, then I hope that someone else does.

If they do, they’ll have my business.

Whatever Facebook does, let’s cut the spyware bullshit. That’s a real business killer. Those guys just dug themselves a big one with Beacon, and I’m wondering how they’ll get out.

Technorati Tags: , advertising, attention, beacon, consumer, davewiner, facebook, profile, user