Week 2

Group Assignment - Facebook: It’s About the Money

1) Perform an ethical analysis of Facebook. What is the ethical dilemma presented by this case?

Facebook is the leading Social Networking Site of the World. Facebook mission is to make the world more open and connected. Facebook helps Internet users stay connected with their friends, families, and colleagues. It helps them discover and learn more about what is going on in the world around them. It helps them express themselves by sharing their opinions, ideas, photos, and activities. However, what the company actually does is to share tons of information about users with large multinational advertisers to bring the benefit for it. Advertisers can engage with users based upon the information shared by users such as age, gender, location, education, work history or specific interests. Facebook CEO Mark Zuckerberg often says that people want to be more open and connected. It's unclear whether that is truly the case, but it is certainly true that Facebook wants the world to be more open and connected because it stands to make more money in that world.

2) What is the relationship of privacy to Facebook’s business model?

Talking privacy to Facebook is a bit ironic. Facebook’s entire business model is based on aggregation and sharing user information. They give people a free social media platform to use and in turn sell advertising and insights based on what they learn about user. Facebook has massive capabilities to collect, store and analyze data. This allows Facebook to sell very targeted advertising. Therefore, privacy is the Facebook business model.

3) Describe the weaknesses of Facebook’s privacy policies and features. What management, organization, and technology factors have contributed to those weaknesses?

The weakness behind Facebook's privacy issues was a lack of communication between Facebook and its users. Users were not aware that they were able to control what information was being shared with external parties.

Facebook’s use of their Beacon advertising service caused the first problem for users. This service served as a way to inform users of purchases and activities of their friends outside of Facebook. There were two problems with this service, first it was an opt-out service, meaning the users themselves had to turn off the service to not have their information shared, and second even when users turned off the service it continued to share their information.

The introduction of the “news feed” was met with opposition from users because they felt it was too invasive. Instead of only sharing status updates the news feed shared additional information such as profile updates, adding new friends, and adding new applications.

Incorrectly handling user information when deleting their accounts also caused a backlash for Facebook. Facebook servers would keep user information permanently, with the reasoning that it would be easier for the users to reactivate their accounts if they chose to.

4) Will Facebook be able to have a successful business model without invading privacy? Explain your answer. Are there any measures Facebook could take to make this possible?

Facebook as a social networking website provides people with many kinds of advantages to communicate with others. Facebook target market based on their demographic information, hobbies, regions, and specified criteria in a comfortable and engaging environment. People can find their friends, see the updates of friends’ profiles, communicated with each other, and use different applications on it. Business model intends to generate revenue and profits. As more and more people register the site, the brand image is increasing. Based on the network effect, users do businesses on the site. Facebook was widespread fast among high schools, colleges and universities that provide an easy way to find friends. This made students want to join in it also because of narrow potential network with details in school activities. Facebook’s value and growth potential is determined by how effectively it can leverage the personal data is aggregated about its users to attract advertisers. Advertising is the mainly revenue of Facebook. Therefore, in my opinion, I don’t think Facebook will be able to have a successful model without invading privacy.