Follow the Money (part 1 of 3): Social Media and the Big Spenders
Like a repeated news ticker, once again Facebook is in the news. As a high player in the social media marketplace, it comes as no surprise that Facebook would lead headlines, but unlike Twitter , who caught media attention for reaching a record of 5 billion tweets last week, Facebook's latest news round is not so glamorous. It does boil down, however, to the fact that social media is a marketplace.
Public Radio International suspects that Facebook holds control over or, or access to, depending on one's viewpoint, to the largest photo collection in the world not to mention the private information of 400 million active users. That is a lot of capital- 400 million people. In the world of social media where no tangible product is produced to fill market shelves for purchase, the money that does exchange hands does so over a new form of commerce, digital in form but just as real: social information.
Despite utopian dreams, information is rarely free. Someone is footing the bill for someone else to make money and in turn those footing the bill also hope to make money. It is a monetary loop. This loop doesn't run on electricity but the bits and bytes of information gathered from users who flock to such sites as Facebook because they think it is free.
Take Facebook, it is not an altruistic aggregator of people for the sole purpose of joining in conversations and sharing information. Facebook is in the social media world to make money, more money than it takes to cover the cost of software development, servers, and staff. So not only does Facebook spend money for users to interact for free, but it wants to bring in more money than it costs to provide the beloved service.
So where is Facebook getting all the money to make the CEO, Zuckerberg, the youngest self-made millionaire at the ripe old age of 23? Just as important is what is Zuckerberg selling? The answer is you of course. Zuckerberg is selling access to you and all the others who have made Facebook the potential biggest consumer database in the world. The other end of the question is who is buying? The answer again is simple- advertisers.
With so many users, Facebook can promise wide viewership as each profile page comes with a side bar of advertisements that users are forced to see. From the advertiser’s point of view, a trapped audience is ideal when the numbers are so high, but again advertisers need to make money which can only be done if viewers purchase their wares. The better an ad is paired with an interested viewer, the more likely a purchase is made, and there is the catch. Facebook sells access to your interests and likes so that companies can target you as part of a dedicated mass mailing.
If you follow the money, it all makes sense. So play sensibly. The next time Facebook is in the news, take the sensation as a reminder that learning to share safely and sensibly is important in the digital age. Also remember that there is only so much safety that can be had, too, when playing in a volatile marketplace where you are at the mercy of big players out to make a monetary killing. You are the prey after all.
Read up on Internet Safety with books from the library or ask your local librarian for suggestions:
Cyberdanger and Internet safety: a hot issue by Jennifer Lawler
MySpace unraveled : a parent's guide to teen social networking from the directors of BlogSafety.com by Larry Magid and Anne Collier
The rough guide to MySpace by Peter Buckley
Using the Internet safely for seniors for dummies by Linda Criddle and Nancy Muir
What in the world are your kids doing online? : how to understand the electronic world your children live in by Barbara Melton and Susan Shankle