Law in the Internet Society

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Facebook: Big Brother is Watching

-- By MatthewGriffinCashia - 11 Nov 2012


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Facebook: Big Brother is Watching

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“Big Brother is watching you.” This quote from George Orwell’s Nineteen Eighty-Four ("1984") novel strikes fear into the hearts and minds of readers. In 1984, Orwell describes a society where everyone is under complete surveillance by a totalitarian state. Readers of Orwell’s novel were provided a portrayal of the dangers that this constant monitoring of citizens by a government entity can pose. In fact, just last year Justice Breyer referenced this novel when questioning the validity of the government’s argument that it should be able to use GPS tracking of U.S. citizens without seeking a warrant.
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1984 highlights the dangers that a government may pose, but the question remains as to whether these concerns are mitigated when the same activity is engaged in by a private entity? Today, although various companies have the ability to compile vast amounts of data on individuals, perhaps no company is currently receiving as much attention as Facebook. Although much of Facebook’s publicity surrounds its recent IPO, less attention has been given to how Facebook operates. That is, who holds its data, who sells it, who reprocesses it, and in what manner these activities are performed. Rather than being concerned with Facebook’s stock price, a more important concern is whether Facebook is watching you and what implications this may have on you, the user, and the public at large.
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Though many comprehend the dangers that government monitoring can pose, scholars and individuals today fail to see that these same dangers and risks will be imposed when such monitoring is engaged in by a private entity. Specifically, the data aggregation and storage engaged in by Facebook, and other entities like it, can and will inflict the same risks to the population. To support this statement, let us first begin by examining Facebook's operations. That is, who holds its data, who sells it, who reprocesses it, and in what manner these activities are performed.
 Facebook learns about you not just from your own activity on Facebook, but also from information others share about you. Though Facebook knows what pages you view, what links you click, among other factors, a more troubling aspect of Facebook is that it is able to determine your location. With the increased use of Facebook on mobile devices, this means that not only does Facebook know everything you choose to share and everything your “friends” share about you, it also knows where you are almost every waking (and un-waking) minute. Highlighting Facebook’s grasp on your life, it is even able to scan the faces of people in posted pictures and compare the faces with its data to determine who is in the picture. Though Facebook states the purpose of this technology is simply to suggest that the individual innocently tag you in the picture, the combination of Facebook’s capabilities with its access to your information makes you wonder "who could be watching."
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 Though clear that Facebook represents an opportunity for abuse of individuals' right to privacy, it must be noted that Facebook is not unique. Many other companies, such as Google, pose a threat. Additionally, the threat is not limited to internet based companies. For example, Microsoft's Kinect, which is a motion capturing camera used by individuals in conjunction with the X-Box 360, allows Microsoft to view your activity in your own home (reminiscent of the cameras placed in each citizens' home in 1984). Microsoft subsequently sells that data, albeit only in numerical, and not video, form, to third parties, most of whom are advertisers.
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Although some may argue that the odds of such privacy abuses are low, they are overlooking the gravity of the situation if such concerns were to become a reality. The correct inquiry is not just an examination into the abuses that monitoring has caused, but rather we must examine if the risks posed by such monitoring are so great as to make the monitoring itself unjustifiable. Look out my friends, “Big Brother could be watching.”

This is a capable and forcefully-written summary of available information, structured by a metaphor, which comes from Orwell. What is the idea you want to contribute to the discussion? The sentences that supposedly bear your meaning are tentative, subjunctive in mood where they aren't "some may argue" slippery in content. What the next draft needs is your point, made clearly to start with, developed, and then offered to the reader in conclusion, for further exploration.

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Skeptics argue that the odds of such privacy abuses are low, but they are overlooking the gravity of the situation if such concerns were to become a reality. The correct inquiry is not just an examination into the abuses that monitoring has caused, but rather we must examine if the risks posed by such monitoring are so great as to make the monitoring itself unjustifiable. For the reasons discussed above, I believe the harm to outweigh the benefit, and I urge readers to reflect upon the risks and dangers that Facebook poses not just to themselves, but to society as a whole. Look out my friends, “Big Brother could be watching.”
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Facebook: Big Brother is Watching

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 Though clear that Facebook represents an opportunity for abuse of individuals' right to privacy, it must be noted that Facebook is not unique. Many other companies, such as Google, pose a threat. Additionally, the threat is not limited to internet based companies. For example, Microsoft's Kinect, which is a motion capturing camera used by individuals in conjunction with the X-Box 360, allows Microsoft to view your activity in your own home (reminiscent of the cameras placed in each citizens' home in 1984). Microsoft subsequently sells that data, albeit only in numerical, and not video, form, to third parties, most of whom are advertisers.

Although some may argue that the odds of such privacy abuses are low, they are overlooking the gravity of the situation if such concerns were to become a reality. The correct inquiry is not just an examination into the abuses that monitoring has caused, but rather we must examine if the risks posed by such monitoring are so great as to make the monitoring itself unjustifiable. Look out my friends, “Big Brother could be watching.”

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This is a capable and forcefully-written summary of available information, structured by a metaphor, which comes from Orwell. What is the idea you want to contribute to the discussion? The sentences that supposedly bear your meaning are tentative, subjunctive in mood where they aren't "some may argue" slippery in content. What the next draft needs is your point, made clearly to start with, developed, and then offered to the reader in conclusion, for further exploration.

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Facebook: $38/share, $117/user

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Facebook: Big Brother is Watching

 
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-- By MatthewGriffinCashia - 14 Oct 2012
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-- By MatthewGriffinCashia - 11 Nov 2012
 
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At the time of its IPO, Facebook was valued at $100 billion. This resulted in an offering price of $38/share. After building financial models and compiling comparable company analyses I was unable to come anywhere close to such a valuation. Nor has management – i.e. Zuckerberg – made any satisfactory projections as to where growth will come from. So why have the gurus of Wall Street deemed this medium for social interaction to be of such worth?
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“Big Brother is watching you.” This quote from George Orwell’s Nineteen Eighty-Four ("1984") novel strikes fear into the hearts and minds of readers. In 1984, Orwell describes a society where everyone is under complete surveillance by a totalitarian state. Readers of Orwell’s novel were provided a portrayal of the dangers that this constant monitoring of citizens by a government entity can pose. In fact, just last year Justice Breyer referenced this novel when questioning the validity of the government’s argument that it should be able to use GPS tracking of U.S. citizens without seeking a warrant.
 
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Why are we assuming that share prices under these circumstances have something to do with fundamental value?

Let’s take a quick look at the facts. According to its S-1, Facebook had 850 million monthly active users at the end of 2011. With annual revenue of $3.7 billion, this equates to an average revenue per user (ARPU) of $4.35. ARPU and Facebook’s IPO price are constantly being flaunted and discussed by Zuckerberg and the media; however, neither Zuckerberg nor the media ever mention an even more important number: $117. What does this $117 represent? Well, based on Facebook’s valuation, Zuckerberg effectively sold each Facebook user – i.e. you – for $117.

That look at the facts is too quick. It doesn't provide context and it isn't thorough. With a revenue one tenth that of Google, what did it earn, not take in, per customer? That princely $4.35, as you could have heard me pointing out in my classroom and on the net last spring, represents real profit on operations of about $0.36/user or so. And this on the basis of a display advertising business which does not transfer well to the mobile screen, as everyone began realizing the minute after the big sell was over, but which once again you could have heard in my classroom last spring for free.

According to its S-1, Facebook derived 85% of its 2011 revenue from advertising. Big deal, right? All Facebook does is let advertisers pay to post ads on its site. Wrong. Facebook’s data gold mine allows it to divide its user base into numerous demographic and preference packages which it then offers to advertisers. Everything you “like” or view is now going to be packaged and sold; however, this doesn’t just affect your experience. This information gathered and sold to advertisers will also in turn grant them more information about your “friends,” thus filling up their screens with more ads.

You are overlooking the whole story, which is data-mining. These "demographic and preference packages" you are talking about are primitive history now.

For a site that was built to make the world more open and connected, it feels like Facebook has sold out. Rather than a contact list of friends, families, and communities, it has become a marketplace where Zuckerberg and advertisers plot on how to extract value and commercial gain from selling and buying you.

Why are you confusing an advertising slogan with a business entity's intentions? Facebook was always what it is now, since it attracted the attention of the gang running it along with Mr Zuckerberg.

Even comical is the fact that while Facebook lists as one of its risk factors the possibility that hackers could steal the information it has, it fails to identify that it is in the same business of the hackers: stealing information and profiting from its obtainment. The privacy and security measures Facebook has taken are merely a tool to safeguard its profits by reducing competitors’ ability to obtain your information, and not to safeguard you, the user.

No. Facebook's security serves far more important purposes. They may not be germane to your analysis, but that doesn't excuse you from thinking about them and refraining from misleading statements.

Zuckerberg has attempted to portray himself as the carefree Gen Y type, and attempted to portray his book of your information as nothing more than an innocent medium to connect with others.

"Has been portrayed." Neither the image of Mr Zuckerberg nor the image of Facebook has been or is being managed by him. Why do you perform financial modeling in order to find out what something is worth, but resort to simplifying personalization in order to explain the behavior of a complex social organism?

This is an image he has attempted to maintain while he made billions by selling your information.

Are you sure that's what has happened? Despite Facebook's denials? On what evidence?

Zuckerberg made billions, the Wall Street fat cats got fatter, and businesses worldwide now have the ability to know your life as well as you know yourself.

That's not a very good way to summarize what big data and the data-mining of personal information accomplishes.

It seems like the only group not getting a cut of this $117 is the people who provide, and by right own, the very material being sold.

Are you now satisfied to reduce the issues you have raised yourself to the question of whether people are getting paid?

I propose that Facebook’s worth is derived from its user base. Why then should they not share in the wealth that is being reaped from it? As the owners and contributors of the information sold, Facebook users should share in the benefit produced by their exploitation, and not just by receiving more narrowly tailored advertisements.

You think the proper discussion is about the users' share of the $0.36/year the owners of Facebook are making on each one of them?

So how do we get it? We could petition Facebook, but seeing as how Zuckerberg is the majority shareholder no action can be taken by Facebook without his approval. And I don’t see him as being interested in giving anything back to the people he took it from, since it was Zuckerberg who eventually decided to sell out to the capitalist ideology and tarnish the at once potentially pure medium of exchange and expression that Facebook represented.

Bollocks. What evidence have you that Facebook was ever anything other than what it is now? What betrayal are you talking about?

But wait, don’t we have privacy laws? Of course, that must be the way. However, because of the fine print you acknowledged when signing up for Facebook, you have no rights to stop them from any of this. In fact, you explicitly approved the sale of your information and have effectively sold yourself, or at least your digital self, into slavery.

This is not true. Didn't you check any of this?

You are a slave to Facebook. You toil in the digital data mines adding further value to them through your posts and likes, and Facebook, your master, reaps the benefits without paying you any wage. Maybe next time you see one of those agreements you should read it. You might be surprised by what you find.

Did you read it? Where did you find what you claim is there? Wouldn't it have been a good idea to link to this language? You didn't just plain make it up, did you?

What about a boycott of Facebook? Maybe we could just go back to using MySpace? . This time let’s just refuse to authorize the new site to steal our information? Sure, this is at least hypothetically possible. Of course, it doesn’t address the injustice that Zuckerberg has inflicted on users for his own pecuniary gain.

Sadly, it seems that there are currently no adequate routes to address the crimes being committed by Zuckerberg.

What crime are you now talking about? The crime of giving you the lousy end of a bad bargain? Even if the bargain were what you say it is, which it isn't, why would that be a crime?

In fact, the very entity we constructed to protect us from injustices such as this – the government – has explicitly allowed Facebook and other companies set up to launder money derived from sales of stolen information to go forward with these acts unpunished.

What stolen information? What money laundering? You're studying to be a lawyer. You have to be responsible in your use of legal language to describe public actors and actions.

So back to our question: how did the wizards of Wall Street reach a $100 billion valuation? They reached such a valuation through the realization of what Facebook is: a theft. And theft has pretty good margins. Wall Street, being familiar with such improper shifts of wealth, saw the value that this scheme represented. Further, having the government in their pocket, Wall Street realized that this was a scheme that could be perpetuated indefinitely with little resistance from the users who were too blind or too unconcerned to rise up against such an injustice.

The only problem with this whole explanation, apart from its wild irresponsibility and broad departure from fact, is that Facebook doesn't make any serious money. So the "it's worth what it's worth because it's the proceeds of theft" position is unfortunately ridiculous: really good theft is much more profitable than Facebook. You've made a story of stock promotion, which isn't important, obscure the story of how Facebook's business and other institutional relations really work.

So will we, the users, the victims of Facebook, ever be made whole from the theft and exploitation of our personal lives and activities? Let’s just say I wouldn’t keep checking your mailbox for any checks.

Let's just say that doesn't seem to me to be a very important statement, because it doesn't capture any idea about Facebook that people can use to understand the issues of privacy for them in their daily lives. You haven't analyzed Facebook correctly, because you haven't made either the financial inquiry or the legal inquiry that the situation called for: you have given up too early on both counts, and in some cases seriously mislead both yourself and your readers. Nor have you explained anything about privacy as people in their lives really encounter the threats. You haven't identified who holds data, who sells, trades in, or reprocesses data, or even what the Internet contribution to the personal data industry is, beyond Facebook, which is just one firm. You haven't explained what is done with the data, or why individuals might or should care. You've thrown words like slavery around, but you haven't made the slightest attempt to justify them in any but metaphorical terms. You have linked nothing, acquainted no reader with any materials or thinkers that would help them to evaluate your ideas. You've conveyed the impression that Facebook is a unique problem, and that if it were paying people some tiny sliver of its infinitesimal profits that even this unique problem would magically not matter anymore.

It seems to me that no effort of self-criticism has gone into this version. Too many issues are left untouched for a really scrupulous and hard-eyed self-evaluation to have occurred. One doesn't have to be an outside reader to see where claims are made that need checking, where legal terms of art are applied to conduct that in no way is shown to fall within the relevant legal categories, where inflammatory characterizations are applied to the behavior of a single business entity that is not yet successfully distinguished from entities in closely-equivalent or interoperating businesses.

The route to improvement is that exacting assessment of every word in every sentence of the existing draft. Factual claims should be tracked down and carefully-selected evaluated sources linked or cited. Legal conclusions or terms of art indicating legal conclusions should be offered with a reasonable basis for factual belief and legal assertion. I was taught when a young man that a lawyer's public statements on professional subjects should meet Rule 11 standards, and I think that's sound advice. That process will, I think, surface most of the issues with the analysis I have indicated in my questions, along with others I needn't be so tedious as to suggest.

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1984 highlights the dangers that a government may pose, but the question remains as to whether these concerns are mitigated when the same activity is engaged in by a private entity? Today, although various companies have the ability to compile vast amounts of data on individuals, perhaps no company is currently receiving as much attention as Facebook. Although much of Facebook’s publicity surrounds its recent IPO, less attention has been given to how Facebook operates. That is, who holds its data, who sells it, who reprocesses it, and in what manner these activities are performed. Rather than being concerned with Facebook’s stock price, a more important concern is whether Facebook is watching you and what implications this may have on you, the user, and the public at large.
 
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Facebook learns about you not just from your own activity on Facebook, but also from information others share about you. Though Facebook knows what pages you view, what links you click, among other factors, a more troubling aspect of Facebook is that it is able to determine your location. With the increased use of Facebook on mobile devices, this means that not only does Facebook know everything you choose to share and everything your “friends” share about you, it also knows where you are almost every waking (and un-waking) minute. Highlighting Facebook’s grasp on your life, it is even able to scan the faces of people in posted pictures and compare the faces with its data to determine who is in the picture. Though Facebook states the purpose of this technology is simply to suggest that the individual innocently tag you in the picture, the combination of Facebook’s capabilities with its access to your information makes you wonder "who could be watching."

Facebook uses the information it compiles to further a number of activities, including those in relation to advertising and other revenue generating operations. And though Facebook acknowledges that the user owns all of the information it receives about you, it need only comply with one of the following rules in order to share it: (1) receive your permission, (2) give you notice, or (3) remove personally identifying information. Regardless, Facebook states that it provides your information to a number of vendors who must agree to use your information only in a manner consistent with Facebook’s Data Use Policy. Nonetheless, concerns arise as to the oversight of these third parties, as well as the security and technological protection afforded by these parties.

So what implications does this series of events have for you, the user? First, let’s start with some examples that we know of. Facebook is currently using scanning software that monitors users’ chats for criminal activity and notifies police if any suspicious behavior is detected. Additionally, Facebook has also complied with subpoenas to provide data on users’ wall posts, photos, and login/IP data (such data can provide the location of a user). Other examples exist. But you may ask of what concern is this to me? I am not a criminal. In fact, many may view this aspect as appealing, since it merely seeks to reduce harm to individuals through criminal or otherwise undesirable acts.

Though arguable whether this assistance to government entities by Facebook is desirable, or if it makes Facebook a vigilante increasing danger rather than reducing it, a more pressing concern is not what we know Facebook can do or does, but rather what Facebook represents. That is, can this monitoring of individuals' daily lives ever be used in a manner reminiscent of 1984?

The answer seems clearly to be in the affirmative. Not only can Facebook track your location, it can do so without a warrant. Not only can Facebook know everything about you (that you choose to share), it can obtain this information easily as it is freely provided to it by its user base. Not only can Facebook begin studying you now, it can also use its information to track you for so long as you have been a user, as all of its information is typically stored until an account is deleted. These capabilities make Facebook a dangerous entity, regardless of whether or not Facebook chooses to share the information with a government, either as a result of its own acts or through theft of its information by hackers or other third parties.

Though clear that Facebook represents an opportunity for abuse of individuals' right to privacy, it must be noted that Facebook is not unique. Many other companies, such as Google, pose a threat. Additionally, the threat is not limited to internet based companies. For example, Microsoft's Kinect, which is a motion capturing camera used by individuals in conjunction with the X-Box 360, allows Microsoft to view your activity in your own home (reminiscent of the cameras placed in each citizens' home in 1984). Microsoft subsequently sells that data, albeit only in numerical, and not video, form, to third parties, most of whom are advertisers.

Although some may argue that the odds of such privacy abuses are low, they are overlooking the gravity of the situation if such concerns were to become a reality. The correct inquiry is not just an examination into the abuses that monitoring has caused, but rather we must examine if the risks posed by such monitoring are so great as to make the monitoring itself unjustifiable. Look out my friends, “Big Brother could be watching.”


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Facebook: $38/share, $117/user


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Facebook: $38/share, $117/user

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At the time of its IPO, Facebook was valued at $100 billion. This resulted in an offering price of $38/share. After building financial models and compiling comparable company analyses I was unable to come anywhere close to such a valuation. Nor has management – i.e. Zuckerberg – made any satisfactory projections as to where growth will come from. So why have the gurus of Wall Street deemed this medium for social interaction to be of such worth?
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Why are we assuming that share prices under these circumstances have something to do with fundamental value?
 Let’s take a quick look at the facts. According to its S-1, Facebook had 850 million monthly active users at the end of 2011. With annual revenue of $3.7 billion, this equates to an average revenue per user (ARPU) of $4.35. ARPU and Facebook’s IPO price are constantly being flaunted and discussed by Zuckerberg and the media; however, neither Zuckerberg nor the media ever mention an even more important number: $117. What does this $117 represent? Well, based on Facebook’s valuation, Zuckerberg effectively sold each Facebook user – i.e. you – for $117.
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That look at the facts is too quick. It doesn't provide context and it isn't thorough. With a revenue one tenth that of Google, what did it earn, not take in, per customer? That princely $4.35, as you could have heard me pointing out in my classroom and on the net last spring, represents real profit on operations of about $0.36/user or so. And this on the basis of a display advertising business which does not transfer well to the mobile screen, as everyone began realizing the minute after the big sell was over, but which once again you could have heard in my classroom last spring for free.
 According to its S-1, Facebook derived 85% of its 2011 revenue from advertising. Big deal, right? All Facebook does is let advertisers pay to post ads on its site. Wrong. Facebook’s data gold mine allows it to divide its user base into numerous demographic and preference packages which it then offers to advertisers. Everything you “like” or view is now going to be packaged and sold; however, this doesn’t just affect your experience. This information gathered and sold to advertisers will also in turn grant them more information about your “friends,” thus filling up their screens with more ads.
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For a site that was built to make the world more open and connected, it feels like Facebook has sold out. Rather than a contact list of friends, families, and communities, it has become a marketplace where Zuckerberg and advertisers plot on how to extract value and commercial gain from selling and buying you. Even comical is the fact that while Facebook lists as one of its risk factors the possibility that hackers could steal the information it has, it fails to identify that it is in the same business of the hackers: stealing information and profiting from its obtainment. The privacy and security measures Facebook has taken are merely a tool to safeguard its profits by reducing competitors’ ability to obtain your information, and not to safeguard you, the user.
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You are overlooking the whole story, which is data-mining. These "demographic and preference packages" you are talking about are primitive history now.

For a site that was built to make the world more open and connected, it feels like Facebook has sold out. Rather than a contact list of friends, families, and communities, it has become a marketplace where Zuckerberg and advertisers plot on how to extract value and commercial gain from selling and buying you.

Why are you confusing an advertising slogan with a business entity's intentions? Facebook was always what it is now, since it attracted the attention of the gang running it along with Mr Zuckerberg.

Even comical is the fact that while Facebook lists as one of its risk factors the possibility that hackers could steal the information it has, it fails to identify that it is in the same business of the hackers: stealing information and profiting from its obtainment. The privacy and security measures Facebook has taken are merely a tool to safeguard its profits by reducing competitors’ ability to obtain your information, and not to safeguard you, the user.

No. Facebook's security serves far more important purposes. They may not be germane to your analysis, but that doesn't excuse you from thinking about them and refraining from misleading statements.

Zuckerberg has attempted to portray himself as the carefree Gen Y type, and attempted to portray his book of your information as nothing more than an innocent medium to connect with others.

"Has been portrayed." Neither the image of Mr Zuckerberg nor the image of Facebook has been or is being managed by him. Why do you perform financial modeling in order to find out what something is worth, but resort to simplifying personalization in order to explain the behavior of a complex social organism?

This is an image he has attempted to maintain while he made billions by selling your information.

 
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Zuckerberg has attempted to portray himself as the carefree Gen Y type, and attempted to portray his book of your information as nothing more than an innocent medium to connect with others. This is an image he has attempted to maintain while he made billions by selling your information. Zuckerberg made billions, the Wall Street fat cats got fatter, and businesses worldwide now have the ability to know your life as well as you know yourself. It seems like the only group not getting a cut of this $117 is the people who provide, and by right own, the very material being sold.
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Are you sure that's what has happened? Despite Facebook's denials? On what evidence?

Zuckerberg made billions, the Wall Street fat cats got fatter, and businesses worldwide now have the ability to know your life as well as you know yourself.

That's not a very good way to summarize what big data and the data-mining of personal information accomplishes.

It seems like the only group not getting a cut of this $117 is the people who provide, and by right own, the very material being sold.

Are you now satisfied to reduce the issues you have raised yourself to the question of whether people are getting paid?
 I propose that Facebook’s worth is derived from its user base. Why then should they not share in the wealth that is being reaped from it? As the owners and contributors of the information sold, Facebook users should share in the benefit produced by their exploitation, and not just by receiving more narrowly tailored advertisements.
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You think the proper discussion is about the users' share of the $0.36/year the owners of Facebook are making on each one of them?
 So how do we get it? We could petition Facebook, but seeing as how Zuckerberg is the majority shareholder no action can be taken by Facebook without his approval. And I don’t see him as being interested in giving anything back to the people he took it from, since it was Zuckerberg who eventually decided to sell out to the capitalist ideology and tarnish the at once potentially pure medium of exchange and expression that Facebook represented.
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But wait, don’t we have privacy laws? Of course, that must be the way. However, because of the fine print you acknowledged when signing up for Facebook, you have no rights to stop them from any of this. In fact, you explicitly approved the sale of your information and have effectively sold yourself, or at least your digital self, into slavery. You are a slave to Facebook. You toil in the digital data mines adding further value to them through your posts and likes, and Facebook, your master, reaps the benefits without paying you any wage. Maybe next time you see one of those agreements you should read it. You might be surprised by what you find.
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Bollocks. What evidence have you that Facebook was ever anything other than what it is now? What betrayal are you talking about?

But wait, don’t we have privacy laws? Of course, that must be the way. However, because of the fine print you acknowledged when signing up for Facebook, you have no rights to stop them from any of this. In fact, you explicitly approved the sale of your information and have effectively sold yourself, or at least your digital self, into slavery.

This is not true. Didn't you check any of this?

You are a slave to Facebook. You toil in the digital data mines adding further value to them through your posts and likes, and Facebook, your master, reaps the benefits without paying you any wage. Maybe next time you see one of those agreements you should read it. You might be surprised by what you find.

Did you read it? Where did you find what you claim is there? Wouldn't it have been a good idea to link to this language? You didn't just plain make it up, did you?
 What about a boycott of Facebook? Maybe we could just go back to using MySpace? . This time let’s just refuse to authorize the new site to steal our information? Sure, this is at least hypothetically possible. Of course, it doesn’t address the injustice that Zuckerberg has inflicted on users for his own pecuniary gain.
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Sadly, it seems that there are currently no adequate routes to address the crimes being committed by Zuckerberg. In fact, the very entity we constructed to protect us from injustices such as this – the government – has explicitly allowed Facebook and other companies set up to launder money derived from sales of stolen information to go forward with these acts unpunished.
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Sadly, it seems that there are currently no adequate routes to address the crimes being committed by Zuckerberg.

What crime are you now talking about? The crime of giving you the lousy end of a bad bargain? Even if the bargain were what you say it is, which it isn't, why would that be a crime?

In fact, the very entity we constructed to protect us from injustices such as this – the government – has explicitly allowed Facebook and other companies set up to launder money derived from sales of stolen information to go forward with these acts unpunished.

What stolen information? What money laundering? You're studying to be a lawyer. You have to be responsible in your use of legal language to describe public actors and actions.
 So back to our question: how did the wizards of Wall Street reach a $100 billion valuation? They reached such a valuation through the realization of what Facebook is: a theft. And theft has pretty good margins. Wall Street, being familiar with such improper shifts of wealth, saw the value that this scheme represented. Further, having the government in their pocket, Wall Street realized that this was a scheme that could be perpetuated indefinitely with little resistance from the users who were too blind or too unconcerned to rise up against such an injustice.
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The only problem with this whole explanation, apart from its wild irresponsibility and broad departure from fact, is that Facebook doesn't make any serious money. So the "it's worth what it's worth because it's the proceeds of theft" position is unfortunately ridiculous: really good theft is much more profitable than Facebook. You've made a story of stock promotion, which isn't important, obscure the story of how Facebook's business and other institutional relations really work.
 So will we, the users, the victims of Facebook, ever be made whole from the theft and exploitation of our personal lives and activities? Let’s just say I wouldn’t keep checking your mailbox for any checks.
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Let's just say that doesn't seem to me to be a very important statement, because it doesn't capture any idea about Facebook that people can use to understand the issues of privacy for them in their daily lives. You haven't analyzed Facebook correctly, because you haven't made either the financial inquiry or the legal inquiry that the situation called for: you have given up too early on both counts, and in some cases seriously mislead both yourself and your readers. Nor have you explained anything about privacy as people in their lives really encounter the threats. You haven't identified who holds data, who sells, trades in, or reprocesses data, or even what the Internet contribution to the personal data industry is, beyond Facebook, which is just one firm. You haven't explained what is done with the data, or why individuals might or should care. You've thrown words like slavery around, but you haven't made the slightest attempt to justify them in any but metaphorical terms. You have linked nothing, acquainted no reader with any materials or thinkers that would help them to evaluate your ideas. You've conveyed the impression that Facebook is a unique problem, and that if it were paying people some tiny sliver of its infinitesimal profits that even this unique problem would magically not matter anymore.

It seems to me that no effort of self-criticism has gone into this version. Too many issues are left untouched for a really scrupulous and hard-eyed self-evaluation to have occurred. One doesn't have to be an outside reader to see where claims are made that need checking, where legal terms of art are applied to conduct that in no way is shown to fall within the relevant legal categories, where inflammatory characterizations are applied to the behavior of a single business entity that is not yet successfully distinguished from entities in closely-equivalent or interoperating businesses.

The route to improvement is that exacting assessment of every word in every sentence of the existing draft. Factual claims should be tracked down and carefully-selected evaluated sources linked or cited. Legal conclusions or terms of art indicating legal conclusions should be offered with a reasonable basis for factual belief and legal assertion. I was taught when a young man that a lawyer's public statements on professional subjects should meet Rule 11 standards, and I think that's sound advice. That process will, I think, surface most of the issues with the analysis I have indicated in my questions, along with others I needn't be so tedious as to suggest.


MatthewGriffinCashiaFirstPaper 1 - 14 Oct 2012 - Main.MatthewGriffinCashia
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META TOPICPARENT name="FirstPaper"

Facebook: $38/share, $117/user

-- By MatthewGriffinCashia - 14 Oct 2012


At the time of its IPO, Facebook was valued at $100 billion. This resulted in an offering price of $38/share. After building financial models and compiling comparable company analyses I was unable to come anywhere close to such a valuation. Nor has management – i.e. Zuckerberg – made any satisfactory projections as to where growth will come from. So why have the gurus of Wall Street deemed this medium for social interaction to be of such worth?

Let’s take a quick look at the facts. According to its S-1, Facebook had 850 million monthly active users at the end of 2011. With annual revenue of $3.7 billion, this equates to an average revenue per user (ARPU) of $4.35. ARPU and Facebook’s IPO price are constantly being flaunted and discussed by Zuckerberg and the media; however, neither Zuckerberg nor the media ever mention an even more important number: $117. What does this $117 represent? Well, based on Facebook’s valuation, Zuckerberg effectively sold each Facebook user – i.e. you – for $117.

According to its S-1, Facebook derived 85% of its 2011 revenue from advertising. Big deal, right? All Facebook does is let advertisers pay to post ads on its site. Wrong. Facebook’s data gold mine allows it to divide its user base into numerous demographic and preference packages which it then offers to advertisers. Everything you “like” or view is now going to be packaged and sold; however, this doesn’t just affect your experience. This information gathered and sold to advertisers will also in turn grant them more information about your “friends,” thus filling up their screens with more ads.

For a site that was built to make the world more open and connected, it feels like Facebook has sold out. Rather than a contact list of friends, families, and communities, it has become a marketplace where Zuckerberg and advertisers plot on how to extract value and commercial gain from selling and buying you. Even comical is the fact that while Facebook lists as one of its risk factors the possibility that hackers could steal the information it has, it fails to identify that it is in the same business of the hackers: stealing information and profiting from its obtainment. The privacy and security measures Facebook has taken are merely a tool to safeguard its profits by reducing competitors’ ability to obtain your information, and not to safeguard you, the user.

Zuckerberg has attempted to portray himself as the carefree Gen Y type, and attempted to portray his book of your information as nothing more than an innocent medium to connect with others. This is an image he has attempted to maintain while he made billions by selling your information. Zuckerberg made billions, the Wall Street fat cats got fatter, and businesses worldwide now have the ability to know your life as well as you know yourself. It seems like the only group not getting a cut of this $117 is the people who provide, and by right own, the very material being sold.

I propose that Facebook’s worth is derived from its user base. Why then should they not share in the wealth that is being reaped from it? As the owners and contributors of the information sold, Facebook users should share in the benefit produced by their exploitation, and not just by receiving more narrowly tailored advertisements.

So how do we get it? We could petition Facebook, but seeing as how Zuckerberg is the majority shareholder no action can be taken by Facebook without his approval. And I don’t see him as being interested in giving anything back to the people he took it from, since it was Zuckerberg who eventually decided to sell out to the capitalist ideology and tarnish the at once potentially pure medium of exchange and expression that Facebook represented.

But wait, don’t we have privacy laws? Of course, that must be the way. However, because of the fine print you acknowledged when signing up for Facebook, you have no rights to stop them from any of this. In fact, you explicitly approved the sale of your information and have effectively sold yourself, or at least your digital self, into slavery. You are a slave to Facebook. You toil in the digital data mines adding further value to them through your posts and likes, and Facebook, your master, reaps the benefits without paying you any wage. Maybe next time you see one of those agreements you should read it. You might be surprised by what you find.

What about a boycott of Facebook? Maybe we could just go back to using MySpace? . This time let’s just refuse to authorize the new site to steal our information? Sure, this is at least hypothetically possible. Of course, it doesn’t address the injustice that Zuckerberg has inflicted on users for his own pecuniary gain.

Sadly, it seems that there are currently no adequate routes to address the crimes being committed by Zuckerberg. In fact, the very entity we constructed to protect us from injustices such as this – the government – has explicitly allowed Facebook and other companies set up to launder money derived from sales of stolen information to go forward with these acts unpunished.

So back to our question: how did the wizards of Wall Street reach a $100 billion valuation? They reached such a valuation through the realization of what Facebook is: a theft. And theft has pretty good margins. Wall Street, being familiar with such improper shifts of wealth, saw the value that this scheme represented. Further, having the government in their pocket, Wall Street realized that this was a scheme that could be perpetuated indefinitely with little resistance from the users who were too blind or too unconcerned to rise up against such an injustice.

So will we, the users, the victims of Facebook, ever be made whole from the theft and exploitation of our personal lives and activities? Let’s just say I wouldn’t keep checking your mailbox for any checks.


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