Why Facebook Will Emerge a Winner in Battle Over Privacy

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Within the last few years, advertisers have rapidly reformed the web into a hunter's paradise, turning people into targets as marketers eagerly track down the specific reader groups (by demography and geography and willingness to buy) that companies are continuously appealing to online. In response, privacy advocates and government regulators have made digital privacy ripe for legislation with President Obama and congressional legislators recently calling for a privacy bill. Whether or not a law comes to pass, advertisers, publishers and e-commerce merchants will certainly have to alter how they conduct business in this newly sensitive digital age.

LAST ONE LAUGHING: Facebook CEO Mark Zuckerberg
LAST ONE LAUGHING: Facebook CEO Mark Zuckerberg Credit: Tony Avelar

The winner in all this, strangely, will be Facebook, and to a lesser extent, Foursquare and every other social service that provides value to consumers in proportion to the amount of personal information users freely give them. Both or these companies are based on a plain premise: People like sharing their every thought, whereabouts and want, and the social network's 600 million registered users and Foursquare's rapid growth suggest that that hypothesis is largely true. We've been transformed to a society of data-sharers and no one even had to ask.

And while it was never anyone's intent, this will save Facebook -- the richest trove of data outside Google -- from regulation.

Publicity, exposure, openness are the central tenets of the social network's mastermind Mark Zuckerberg, who famously stated his belief that privacy is outmoded, that there's little purpose to being online if you're not going to divulge who you are and what you like. No one presumes Mr. Zuckerberg's conceit is about upholding the virtues of candor; he merely believes life online will be less noisy, more material if you simply state what you want. The patent irony here is that the executive who does not believe in the value of online privacy stands to gain the most from any forthcoming privacy rules. But that's only because he's created a space that encourages the exact opposite, and people have responded.

That proposition requires you to use real names and enter (Mr. Zuckerberg hopes) accurate information. The particular genius of Facebook's registration process is that it asks you for your real name, or a real name, at least, which, in many ways, is still a novel concept online. Until Facebook came along, the web was a playground of playful anonymity, populated by mock usernames, from CuteGrrl123 to IHaveWhatYouWant, and that anyone who would willingly offer up authentic details was mocked by the internet's early adherents as naive or simply stupid.

Wael Ghonim, the Google executive who turned Facebook into a digital bullhorn for Egypt's unrest, used the pseudonym El Shaheed (The Martyr) as a handle on the social service when he began his campaign -- an underground movement where anonymity was crucial, especially in an environment where the authorities were hunting down the protesters. Amazingly, once Mr. Ghonim admitted to being the person behind the Facebook page that helped foment Egypt's recent revolution (and after he was released from prison), he was forced to resign the account and re-register on Facebook with his real name. That is the degree to which the Palo Alto, Calif., company believes in full disclosure.

Foursquare is still an experimental network for many, but it is quickly gaining adoption as another fact of everyday life online. Of course you're going to check in with however many others present -- that digital signature (I'm at ...) seems to mark your existence in a place more and more these days than your actual presence. Location-based marketing is the most tantalizing object on marketing's horizon, but it is also the scariest and most fraught with obvious privacy issues. Like it or not, your phone is checking you in every where you are to someone -- the question is who can use that information and how. My bet? It will be the companies to whom you've already volunteered that information, like Foursquare, or maybe Twitter, which has been geolocating tweets from the start.

When online marketers peek into your surfing habits and presume some basic information, such as your age and gender, it doesn't feel creepy so much as it feels unnecessary when Facebook has all that information upfront, provided by the user herself.

The most likely form of regulation will be of third-party data collectors. Facebook is a third-party data collector on millions of sites via "like" buttons and Facebook Connect. The difference is you've already given Facebook permission to collect the data by signing up.

The truth is, the internet has always been a hunter's paradise, a terrain full of trace elements, of tags and cookies and headers and invisible .gifs, of so many convenient downdrifts. Its very design has forever precluded it from promising the kind of real anonymity that many of its early adherents proselytized. It is, instead, a land composed of trillions of reactive bits, bits witness to our every presence. You have always been tracked -- it's just that no one ever bothered to look, or cared where you had been or where you were headed.

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Edmund Lee covers digital news at Ad Age.

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