Facebook Cashing In On User Data? What Do You, the User, Think?

“Facebook knows…”

“Mother lode of personal information…”

“For Facebook users, the free ride is over.”

Facebook is reportedly ready to cash in on the likes, dislikes, personal information, friends, hobbies and more that it knows about you, the user.

Concerned yet?  Should you be?

“Facebook looks to cash in on user data: Status updates and profiles are a potential trove for advertisers, raising privacy alarms,” screamed the front-page headline of this weekend’s Los Angeles Times.

After seven years of working with the single focus of making the social network the biggest and baddest there is, Facebook is finally ready to cash in, on the backs of the 600 million users that single focus achieved.

The social networking giant is starting to mine its massive database to match users to advertisers like never before, the Times found.

“[T]he Palo Alto company is looking to cash in on this mother lode of personal information by helping advertisers pinpoint exactly whom they want to reach. This is no idle boast. Facebook doesn’t have to guess who its users are or what they like. Facebook KNOWS, because members volunteer this information freely – and frequently – in their profiles, status updates, wall posts, messages and ‘likes.’

It’s now tracking this activity, shooting online ads to users based on their demographics, interests, even what they say to friends on the site – sometimes within minutes of them typing a key word or phrase. For example, women who have changed their relationship status to ‘engaged’ on their Facebook profiles shouldn’t be surprised to see ads from local wedding planners and caterers pop up when they log in.”

Privacy advocates, of course, aren’t thrilled, with one even calling Facebook’s actions “stealth digital surveillance.”

Likely scaring privacy advocates even more are the enormous, high-money revenues at stake that make it hard to foresee where, or how far, Facebook’s data matching efforts could go.

“Facebook’s unique trove of consumer behavior could transform it into one of the most powerful marketing tools ever invented, some analysts believe. And that could translate into a financial bonanza for investors in the 7-year-old company as it prepares for a public offering, perhaps as soon as next year.”

Facebook’s ad revenue reportedly doubled last year to $2 billion, and analysts expect it to double again in 2011.  In just one month, this past February, more than one-third of U.S. online display ads appeared on Facebook alone.

So the question is, should Facebook users be as outraged, and concerned, as privacy advocates currently are when it comes to Facebook’s actions, and reported intentions?  Are they already?

Facebook responded to the Times that it gives users control over whether their names can be shared with friends to promote products, and it does not disclose personally-identifiable user information to advertisers.

But the company does concede that, as the Times reports, “any information users post on the site — hobbies, status updates, wall posts — is fair game for ad targeting.”

So what do you, the user, think?  Is Facebook playing with your privacy, or is the information you willingly enter on the site fair game?  Would you rather have a little less privacy in order to streamline the ads that hit your Facebook wall?

Tell us what you think.  After all, you gave Facebook the information, and it’s your privacy at risk, or convenience.

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