Zuckerberg responds to "you are the product"
Mark Zuckerberg was recently profiled in Time magazine, this time for his efforts to get internet (and, arguably, more importantly, Facebook) to every corner of the world. It’s all very interesting stuff, but tech sites are really latching on to Zuckerberg’s comments about and towards Ello, Apple, and others:
I asked him about Ello, an upstart for-pay social network built on the premise that it doesn’t show you ads and doesn’t harvest your personal information. When a social network does those things, Ello’s manifesto argues, “You’re the product that’s being bought and sold.” Zuckerberg’s take was, as usual, practical: whatever ethical merits it might have, the business model won’t scale. “Our mission is to connect every person in the world. You don’t do that by having a service people pay for.” I suggest that Facebook’s users are paying, just with their attention and their personal information instead of with cash. A publicist changes the subject.
Contrast this passage from earlier in the piece:
But the hardest part is persuading the cell-phone companies to offer the content for free. The idea is that they should make the app available as a loss leader, and once customers see it (inside Facebook they talk about people being “exposed to data”), they’ll want more and be willing to pay for it. In other words, data is addictive, so you make the first taste free.
This part is crucial. It’s not enough for the app to work—the scheme has to replicate itself virally, driven by cell-phone companies acting in their own self-interest. It’s a business hack as much as it is a technical one. Before Zambia, Facebook tried a limited run in the Philippines with a service provider called Globe, which reported nearly doubling its registered mobile data-service users over three months. There’s your proof of concept.
The more test cases Facebook can show off, the easier it will be to persuade telcos to sign on. The more telcos that sign on, the more data Facebook compiles and the stronger its case gets. Eventually the model begins to spread by itself, region by region, country by country, and as it replicates it draws more and more people online. “Each time we do the integration, we tune different things with the operator and it gets better and better and better,” Zuckerberg says. “The thing that we haven’t proven definitely yet is that it’s valuable for them to offer those basic services for free indefinitely, rather than just as a trial. Once we have that, we feel like we’ll be ready to go around to all the other operators in the world and say, This is definitely a good model for you. You should do this.” (There’s a quiet arrogance to it, as there is to a lot of what Facebook does. Facebook is basically saying, Hey, third-world cell-phone operators, by the way, your business model? Let us optimize it for you.)
So Zuckerberg’s case is that internet service is free…for now. People will somehow find a way to pay for it later as the internet opens more opportunities for people over time. Eventually, Facebook will be the only thing that’s free, and it will operate in the same way it does in industrialized world with all of it’s pitfalls and criticisms.
Apple creates products and sells them to customers all over the world. You pay money, you get an Apple product. That’s it. Some of those profits help even fight AIDS. Back in 2011, Tim Cook detailed a program to make products last longer, so they can be traded-in an utilized for third world countries. The plan was rumored to have gained traction last year.
That’s an honest relationship with the customer. For as long as Facebook gives away a service in exchange for information that’s handed over to advertisers, I can’t help but question their intentions.