Why Facebook Inc (FB) Is Shifting Control Of Ads To Users

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June 16, 2014 10:58am NASDAQ:SOCL

facebookOver the last few months, Facebook Inc (NASDAQ:FB) rolled out several new features, many of which were aimed at giving users more control over their personal settings.

On Thursday, June 12, 2014, the social media giant announced that it was going to allow users to alter their advertising profiles, the goal of which is to let Facebook users decide whether to remove a certain type of ad from their profile.

A report in the New York Times that same day went on to explain that Facebook doesn’t just track user information on its own site; it tracks what users do on other websites, the types of apps they download for smartphones, and cookie crumbs users leave when visiting websites, or after downloading programs to their computers or apps to their smartphones.

Once again, this is a reminder to all Internet users, that it’s almost impossible to do anything online without leaving a digital footprint – something that lets companies like Facebook, who have the resources to buy or get that information, track their every move.

The clincher, however, is that people who want to opt out of advertising have to visit another website and go through a list of companies, many of whose names are unfamiliar – making it hard for Facebook users to know exactly what they’re opting out from when they click on the boxes next to a company’s name.

The announcement, not surprisingly, raised eyebrows among privacy advocates, who have pressured the government to step up measures to prevent Facebook from finding ways to sidetrack the settlement the network made with the FCC about upholding privacy promises back in 2012.

The story, were it to stand alone, without any mention of how Facebook intends to find alternative ways to track Internet users’ online activity, might sound like a sincere move from Facebook, to give users a genuine chance to control the extent to which the social media super power can track their activity on the site.

As Jeff Chester, director of the Center for Digital Democracy was quoted as saying in The New York Times, “The privacy announcements today are a political smokescreen to enable Facebook to engage in more data gathering.”

He went on to explain that while Facebook claims to be dedicated to protecting user privacy, this admission is proof that the site is doing exactly the opposite.

Considering the wrath the site has incurred from the FCC for not upholding privacy promises, it’s hard to see this move as anything other than an attempt by Facebook, to find legal loopholes that let the site track user behavior (albeit off site,) analyze their search preferences, and use this to their advantage with advertisers.

Tracking Internet users’ behavior is nothing new.

Search engines from Google to Yahoo and sites of all sizes do similar things to find out about user preferences and search behaviors.

The problem with this type of tracking, at least from Internet users’ standpoint, is that you can’t escape being subject to data collection when you use the Internet – regardless of the purpose for which you use it.

While Facebook claims that this move is designed to give users greater control over the nature of advertising they see, it is a small gesture in the grand scheme of things, especially when the stakes at play here could result in a major increase in advertising revenue for Facebook.

Neither the White House or the FCC have commented on the Facebook announcement.

At the close of trading on Friday, June 13, 2014, Facebook (NASDAQ:FB) dropped about a point from the rate at which it closed the day before.

Activity on the Global X Social Media Index (NASDAQ:SOCL) was consistent with Facebook, indicating that the most likely reason there wasn’t more movement, is that people don’t yet know what to make of this gesture on the part of Facebook, or whether it will turn out to be nothing more than an effective way the social media super power can continue to do the things it does, carefully avoiding the wrath of the government as they do it.

By Diana Primavera, ETF Daily News


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