The Great Facebook Bubble is set to expand to Rabelaisian proportions with the social media giant’s IPO, which is expected to come early February. In the process, Facebook has been courted by investment banks Goldman Sachs (which invested $450 million in early 2011) and Morgan Stanley, with the latter apparently trumpeting that they now have the edge in the Facebook sweepstakes.
For those who are a little confused as to why Facebook would go public, it usually comes down to the fact that initial investors want to cash out (sell stock), the company wants to get a massive infusion of investment capital, and, once the 500 shareholders threshold has been reached, a company is forced to file papers with the Securities & Exchange Commission (SEC). All of this is currently happening with Facebook.
The IPO will only be made available to top-flight investors, so don’t think for a minute that you, in your modest ranch home in Arizona, will be able to buy stock in Facebook. A nice racket is just about to get launched, and all we can do is watch.
But there is something that we can expect to get from the Facebook IPO: a massive increase in user data mining. In other words, expect Facebook, with both new and old investors to please, to devise increasingly more innovative means of collecting user data to sell to advertisers and, a bit more ominously, to share with the government.
It’s not for nothing that WikiLeaks’ Julian Assange called Facebook “the most appalling spy machine that has ever been created.”
As with any large company, and more particularly with publicly traded companies, there is an incentive (some might call it a psychotic incentive since it’s rather divorced from the realities of this world) to grow companies to immense proportions so that investors can sell stock and cash out, thus allowing others to come in and repeat the process ad infinitum. This will most certainly hold true for Facebook.
And the only way that Facebook can grow is to more effectively gather user data to sell to advertisers. Facebook does not deny that this is their business model, so this is not hyperbole. And since Google announced last week that it was distilling the privacy policies of 60 of its services into a single policy—an information exchange to build detailed internet user profiles—Facebook will be forced to compete with its Silicon Valley rival.
The last few years have seen the opening salvos in this escalating data mining arms race between Facebook and Google. It will only get more intense, resulting in incredible amounts of internet user espionage from both tech giants.
Be sure to empty your browser caches, folks, and investigate more ways of limiting the degree to which Facebook and Google can follow you around the internet.
[Image via Charis Tsevis, Creative Commons license]
January 30, 2012 at 4:14 pm, Guest said:
Wait – how could Facebook or Google read your browser cache? Google will have it’s own search history which can’t be erased, of course.
January 30, 2012 at 4:45 pm, D. J. said:
Yes, but if you don’t clear your history and cache Facebook can follow your movements around the web even if you leave the site.
The idea is to clear everything out of your browser so there’s no cookies, which Google needs, of course.
I don’t know about all the other more effective ways of doing this—I’m not an internet expert; which is way I urged readers to do the investigating themselves.D. J.
January 30, 2012 at 6:37 pm, Guest said:
OK, doing some research on the security of the browser history/cache.
Chrome promises that “none of your history data is ever shared or send outside of your browser or your computer without your permission.” (That, of course, is separate from the tracking Google does with your search history)
But there is an attack using Javascript which uses guessing about your past behavior which Firefox is working to fix:
http://blog.mozilla.com/security/2010/03/31/plugging-the-css-history-leak/
Presumably Facebook or Google are not using this attack, because it would be easily detectable and a very visible PR problem.
Bottom line – I think I will look into some of the smaller search companies, but I will not worry too much about my browser history.
January 31, 2012 at 10:21 am, Liza Aanor said:
You can also invest in a free “shell” and run a proxy through Turkey I believe it is. It will show everything as coming from that country with a dummy ip addy. BUT you would have to clear your history and run cc cleaner before and after surfing or going to FB . Also you souuld have a dedicated browser ONLY for that purpose. Hope that helps.
February 08, 2012 at 2:06 pm, A Company Grows Up: Facebook Goes Public (ContributorNetwork) | News Bulletins said:
[...] to some, including JD Pangburn, this change means that Facebook will be selling more of its users’ information to [...]
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February 14, 2012 at 8:21 pm, Facebook Goes Public « Kyle Keith said:
[...] before you think that you’re going to make a nice little investment in the social media behemoth, Death and Taxes magazine says that you’d probably have to be a member at Zuckerberg’s country club to get in on [...]