Tuesday, April 23, 2024

In Your Face: Recession and The Rise of the Anti-Social Web

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The rise of the social Web has been greeted by the same kind of hallelujah chorus that proclaims the advent of all new technology-meets-business trends: breathless and unerringly positive. The coverage is quick to point out the infinite virtues of the latest and greatest while forgetting – or leaving for much later – the mundane task of building a real business case.

In other words, social Web was cool, so cool that it was excused from the requirement for having such things as a viable business plan, inherent value, or ironically, a genuine sense of socially redeeming purpose. Fine – the optimists say, that will all come later. Look at Google, look at the World Wide Web, look at email….

Well, later is about to be now in the world of the social Web, thanks to the global economic meltdown, and a lot of sacred cows are going to be slaughtered on the way to the bank, or bankruptcy court.

Here’s the problem: it was fine and dandy to be Twitter or Facebook or LinkedIn when times were good and cash was cheap. But now that times are horrid and cash is non-existent, the investors are going to be pushing hard on their social Web start-ups to start generating cash, and God forbid, profits. Or else.

And that means that social Web companies, whose only true asset is that personal information you generously gave them (and don’t think you didn’t give it to them, or did you forget to look at the terms of use agreement before you clicked “I agree”?), are going to have to monetize those data. And that means your privacy, your social network, and your very control over what is actually done by these companies with your data, is going to disappear in a cloud of hoped-for black ink.

Welcome to the Anti-social Web, churning your personal data into corporate profits, privacy and propriety be damned.

We had an inkling of this recently with the announcement, now rescinded, that Facebook was going to hang on to your data even if you chose to leave the site. The company rapidly took back its decision in response to a massive storm of criticism inside and outside the Facebook community, but the scrawl is on the wall: We need profits, and your data is the key to profitability.

And while that doesn’t necessarily mean “anything goes,” don’t be so sure. Companies desperate for money and being pressured by Silicon Valley VCs are likely to do anything legal, or even quasi-legal, to make a dime. And personal information of the kind you’ve voluntarily placed into Facebook, LinkedIn, Twitter, and the like is extremely valuable: those names and, in particular their interconnections, are a marketers dream.

And it’s not just the names: you have built a complex social graph about yourself too, which includes your preferences, likes and dislikes, your preferred leisure activities and those of your friends, your birthday, favorite foods, etc. etc. That’s some valuable data in the hands of someone with something to sell.

And don’t think these companies wouldn’t dare to start selling that info to the highest bidder and risk alienating fans and users. In good times, that would be suicide. But in bad times, it’s called survival. And, in case you hadn’t noticed, these are pretty bad times.

I was reminded of how low a desperate company can go recently when I received the umpteenth pitch on my cell phone for an extended warranty on my four-year old Toyota Sienna. Based on the information in the pitch, and the fact that it came to my cell phone, it appears that my local Toyota dealer was the one who sold the information needed to find me and pitch me.

A pretty desperate move, in my opinion: nothing inspires ill-will more than a commercial pitch on your cell phone at 7 PM. What was even more desperate about my local dealership selling the data is that they obviously sold the data to a real low-life, fly-by-night scam artist, as evidenced by the fact that call center agents hang up on you if you dare to ask what company they work for.

Next Page: Only two possible outcomes

So in my mind the question is not whether your personal information is safe, but when will social Web companies start getting as desperate as auto dealerships and start selling their only asset to whomever has the cash.

This dim view of the future of the social web extends even to profit-poster boy LinkedIn, which threw itself a “profitability party” a couple of years ago and is now sagging under the weight of the global recession. The company laid off ten percent of its workforce last November, despite its self-avowed (as a private company, we have only their word for it) status as one of the few profitable social Web companies.

And, as its main VC firm started telling the tech world in October that the good times are over (and that was when the Dow was at 9000 and NASDAQ at 1700. Ahh, those were the good old days) you can be pretty sure there’s a lot of pressure to find new ways to generate cash at LinkedIn. And about the only way to do that is with your data.

Same for Facebook, which is facing the fact that its former $15 billion evaluation is now considered an order of magnitude too high, and that, in my opinion, is being charitable. Then there’s Twitter, which gained a massive cluster hug from the social Web recently following a New York Times article that cited (finally) a real world use for Twitter – as a means to locate some apparently delicious but geographically elusive food. Take that to the bank, you Tweets!

There really are only two ways that this will all end. One way is a massive loss of privacy and control, and which will probably result in the disintegration of many of the social networks (aided and abetted by the facility for social organizing inherent in the social Web: witness the size and rapidity of the protest against Facebook’s data policies last month.)

Or, there will be an attempt to start charging for these services, an almost heretical notion that nonetheless has the following point going for it. We need to realize that we’ve all been slopping at the social Web trough for years on the assumption that the oldest and most sacred maxim in economic theory – there is no such thing as a free lunch – had somehow been magically suspended when the social Web was created.

Well it wasn’t and now we have a choice: pay for our privacy, or pay for our loss of privacy. What’s it going to be?

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