Why is it advantageous for companies to channel their business through Facebook?
ElectricAye
Posts: 4,561
Quoting this: http://seattletimes.nwsource.com/html/opinion/2017469501_harrop10.html
...Stock analysts are valuing Facebook as high as $100 billion. That would make your social media company worth more than Caterpillar, Ford or Kraft Foods. The interesting part is that you have absolutely nothing to sell except information about your members....
Okay, so I can understand why individuals might be dumb enough to get sucked into the Facebook frenzy. It's fun, it's sorta new, and it's the herd effect in full force. The average person has no idea how all their activities are being tracked by Facebook even when they are not logged onto Facebook. And some people don't really care that they are being branded and toe-tagged as they move through this friendly-looking cattle chute of social media. But I'm really baffled that companies, corporations, institutions of all kinds are allowing big chunks of their business to be channeled through Facebook, thus in effect allowing Facebook to observe their customers, analyze their business activities, amass tons of data on their business practices that could easily be sold to competitors, financial predators, even foreign governments, etc. So I can't understand what these companies are thinking.
Can somebody please explain to me why businesses would so blissfully allow another company (Facebook) to amass so much valuable information about their business?
...Stock analysts are valuing Facebook as high as $100 billion. That would make your social media company worth more than Caterpillar, Ford or Kraft Foods. The interesting part is that you have absolutely nothing to sell except information about your members....
Okay, so I can understand why individuals might be dumb enough to get sucked into the Facebook frenzy. It's fun, it's sorta new, and it's the herd effect in full force. The average person has no idea how all their activities are being tracked by Facebook even when they are not logged onto Facebook. And some people don't really care that they are being branded and toe-tagged as they move through this friendly-looking cattle chute of social media. But I'm really baffled that companies, corporations, institutions of all kinds are allowing big chunks of their business to be channeled through Facebook, thus in effect allowing Facebook to observe their customers, analyze their business activities, amass tons of data on their business practices that could easily be sold to competitors, financial predators, even foreign governments, etc. So I can't understand what these companies are thinking.
Can somebody please explain to me why businesses would so blissfully allow another company (Facebook) to amass so much valuable information about their business?
Comments
OBC
Obviously, if FriendFace abused the information it collected, some of that $100 billion is going to the lawyers who are sure to seize on such a great opportunity to plunder Mark's riches. Since there are always plenty of lawyers, you can bet that once the IPO completes, Facebook (oops, FriendFace) will modify their privacy provisions. That will also make them a bit less attractive as a marketing vehicle.
-- Gordon
But, Facebook will go public regardless - after all, it makes Zuckerwhatsit a very rich man. Buyer beware, this is not another leap forward as Google brought to the internet - it is closer to an endgame.
Advertisers love the face that Facebook users offer up so much information about themselves - thus it is getting 20% of the internet advertizing buys at this point. But the real question is whether this is sustainable and growable.
Yes. I was discussing this issue with the director of the company I work for recently. He told how his teenage children and friends DO NOT USE FaceBook. They have already moved on to something else. When he asked them what that was they would not say.
What's all that about?
Well, young kids are not so dumb, they don't want all their information "out there". As an example those teenagers said "we have face book so that granny can be happy that we are OK. But for doing our own stuff we need a lower profile".
So there you go. Another bubble about to burst:)
Personally, there are so many channels through which people can try to reach you these days that I have limited mine to the two or three that really serve me well.
The primary point here is whether Facebook is hyping its IPO so that the insiders can liquidate with a tidy profit or whether there is a real potential for the price to march off into the stars. With a difficult global economy, an aging of the world's wealth economies, and all the other factors - it seems that the advertising revenue for such has limitations. Facebook is already reported to lead the pack with 20% of the advertiser dollars on the internet, beyond Google at 15% share.
But, you can expect the IPO buzz to deny such realities as we move toward the actual event and maybe even beyond.
Of course I see nothing wrong with having a Facebook page for your business as being "just another billboard" standing out there by the information highway, but what puzzles me most, for example, is how so many companies are showing ads on TV and then, rather than displaying their own website dot com, they display the address for their Facebook page, as though their Facebook page matters more than their own direct link to the public via the internet. By actively channeling chumps through Facebook, it seems to me that companies are handing over important private business information to a third party (Facebook) which can do with that information anything it well pleases.
I've heard people are finally getting a sense that their "friends" on social media really don't give that much of a darn about the minutiae of their lives, etc. and so the latest big challenge for Facebook, etc. is trying to "automate caring," something that turns out to be a very big technical challenge and something into which Facebook, etc. is pouring a lot of research money. Facebook, etc. are afraid that once people wake up to the fact nobody really cares about what music they're listening to or what diet plan they're on, then the general public will stop eagerly volunteering that information, which means less advertising dollars, which is the only single thing the Wall Street wizards really care about.
Quoting from this article: http://www.technologyreview.com/web/39321/
Facebook's impending problem is that even if the company enables future pacemakers to share our every heartbeat, the company cannot automate caring - the most important part of the feedback loop that has driven the social Web's ascent....No matter how cleverly our friends' social output is summarized and highlighted for us, there are only so many hours in the day for us to express that we care.
I'm going to guess the kids have discovered this new thing called "email" or perhaps even "the internet", which is rumored to be a trillion-lane information highway that isn't a cattle chute owned by one or two companies - yet.
Ah, very interesting! Being a non-Facebook user, I was not aware of that lens you speak of, but I can see your point: businesses are trying to capitalize on the perceived intimacy of the situation. So I suppose another possible failure mode for Facebook might be that this lens gets more and more oily thanks to advertising. Could it be like the Thanksgiving dinner with friends that gets transformed into a Tupperware party? Will people keep coming to the family reunion if it starts to feel like an Amway convention?
Possibly but I doubt it. But what about this. Youngsters whilst being very sociable among themselves have always had "closed groups", sub-cultures, in the extreme gangs. Since the dawn of time they have had a way of getting on with their own thing in some semblance of secrecy. Think about the way raves were/are organized in such a way that everyone who needs to know knows but the police and authorities do not know in time to do anything about it.
They are not stupid either. Perhaps they already have their own social network servers responding to some Android, iPhone apps in a slick and convenient manner. It need not be a huge global facebook size operation if your subculture is local.
As for me, I don't know how the world has time to dick with all that stuff, I have a hard time keeping up with all the interesting things people are doing on this forum alone:)
I'm sure you're right about that. I've heard lots of parents tell me that they don't mind if their kids are on Faceborg, etc. so long as they can watch what their kids are doing there, so of course the kids are setting up other channels that their parents are not monitoring and probably can not monitor. I tell my kids that, in the future, privacy will be like a commodity, and the more of it you have, the more it will be worth to you. I know a business recruiter who routinely gives talks to high school students and one of the first things she tells them is to get their lives off of the social media: nobody wants to hire somebody who has posted pictures of themselves at a wet T-shirt contest. And nobody wants to hire somebody who has friends who have posted pictures of themselves at a wet T-shirt contest.
Tracking software is really stupid, anyway. My interests are so far removed from the norm that the results are comical. For example I use laboratory furnaces that employ molybdenum disilicide heating elements and thorium oxide refractories to fuse ceramic eutectics at thousands of degrees. So I get barraged by HVAC ads. It's maddening.
@ElectricAye, this is how you handle your kids and facebook http://www.smh.com.au/technology/technology-news/father-shoots-daughters-laptop-after-facebook-chores-complaint-20120213-1t0c6.html
[somewhat ironic that I got that link from a friend on facebook]
That's so funny. I pity the poor kid who dates his daughter.