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How Facebook Sells Your Personal Information

Now that Facebook has gone public and is struggling to get a steady valuation, the company is looking to find new ways to make its money and prove its worth to investors.
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Now that Facebook has gone public and is struggling to get a steady valuation, the company is looking to find new ways to make its money and prove its worth to investors.

One option Facebook is exploring is enhancing ad sales by more effective targeting of increasingly specific demographic groups, using location data from mobile devices and information culled from the site.

The company will be targeting members' information more closely, and expects personal data-sharing to double every decade.

That forces Facebook members to consider just how much of their personal information to share, both now and in the future.

How might Facebook's already flexible privacy policy change as the company works harder to become a platform for engaging with brands? How will that affect the end user?

Marketing treasure trove

We have to start by taking a look at the data in question. How much of a danger to the consumer is the data that Facebook has? Exactly how much data does it really have?

Peter Pasi, executive vice president at Emotive LLC, an Arlington, Va.-based firm that focuses on digital outreach for political campaigns, says Facebook has quite a bit.

"Facebook is the largest opt-in community of individuals in the world, and boasts unparalleled reach," Pasi said. "In English, that means it's likely the largest database of people ever built, and contains more personal data than any other source."

We know that Facebook has a lot of information about us, both what we enter ourselves and the data that our friends choose to put up about us.

Remember the last time your friends tagged you at a location and posted photos? They were sharing your personal data with Facebook. [ 10 Ways to Protect Yourself on Social Media Websites ]

What marketing companies look for, and how much they can use

"Online marketers look at signals," Pasi said. "Did someone visit a snowboarding vacation site, or put a new snowboarding jacket in their online shopping cart and not buy it? Have they been searching for snowboarding equipment? These are the types of things that signal a marketer that a consumer is interested in, or intent on, making a purchase."

You can see how quickly information that seems innocuous when you post it on Facebook can make you a target for specific marketing goals.

Location tagging is, in and of itself, another way to make you an attractive target to marketers. You're giving away information about which brick-and-mortar retailers you are likely to frequent, allowing for even more enhanced targeting.

So what are the limits when it comes to Facebook sharing members' personal data with advertisers and marketers? Do regulations prevent any of this sharing at all?

The issues are really being formed right now, said Allison Hobbs, an intellectual-property and copyright lawyer in New York.

"Social media companies should not engage in deceptive or unfair trade practices," Hobbs said. "As far as end-user data is concerned, that means social media companies should honestly disclose what they plan to do with it. Usually, they do this through their Terms of Service or privacy statements.

"When they are not honest, the Federal Trade Commission, which regulates deceptive and unfair trade practices, may issue a complaint against them," Hobbs said. "In 2011, the FTC issued complaints against Google and Facebook; the result was that both parties are required to do privacy audits until 2032.

"So, it looks like the issue is being handled on a case-by-case basis, which may result in better rules than legislation or prophylactic regulation, since it is more likely to keep up with technological change."

Gaining perspective

What can you do to help keep your personal data from becoming a marketing director's dream?

The best thing is to look at the data that you share on Facebook, and the data that your friends share about you, and take control over it all.

Ask your friends not to tag you in any of their posts. When you find yourself in an unwanted photo, remember that you can always untag yourself.

You should always carefully read through any changes to Facebook's privacy policies. If worse comes to worst, you may have to decide whether you want to keep using Facebook at all.