Facebook Places: A Trojan Horse for Advertisers Who Want Your Private Data for Free

Last Updated Aug 19, 2010 1:54 PM EDT

Facebook's introduction of "Places" seems so simple -- you can now "check in" to a place you're at so your location appears in your Facebook news feed -- yet, like a certain wooden horse from Greek myth, it comes loaded with downsides for consumers. Here's a summary of what Places will mean for advertisers and consumers:
  • Advertisers are salivating over Places although it doesn't -- yet -- allow ads to target you in the place you're at. Obviously it's coming.
  • Foursquare is now dead.
  • Although you can turn off Places, it's not clear from Facebook's privacy settings whether the default is on or off.
  • Places fits clearly with the trend of persuading consumers to give up their privacy so advertisers can use that data to target them.
  • Entirely missing from the announcement is the most crucial issue of all: Consumers' private information is valuable to both advertisers and Facebook, yet both expect to receive it from you for free.
Facebook CEO Mark Zuckerberg promised the advertising component -- in which you'll receive ads relevant to your location, such as coupons for the nearest branch of Starbucks (SBUX) -- is on its way.

It's not just that Places allows you to advertise your own location. Gawker noticed that other Facebook users can "out" you at a location too:
You are at the bar when you are supposed to be at your girlfriend's crappy art show. You chat with your friend Jane, who checks into the bar and tags you: "At this awesome bar, just talked to [Your name here] about his Star Wars memorabilia collection!" Your girlfriend sees this on Jane's wall, walks over to the bar and dumps you on the spot.
(The Gawker link contains an excellent guide to turning off the "Places" function in your Facebook settings -- a process that takes several different clicks and is less than obvious.)

So Places is a Trojan Horse that essentially asks Facebook users to give up their marketable private information with no compensation. While Places is "transparent" in the sense that you don't have to use it, and in fact can turn it off, it nonetheless puts increased pressure on Google (GOOG) to keep up by exploiting the vast trove of personal information it has at its disposal -- all of which advertisers would love to use. Facebook is already instructing app developers -- i.e. advertisers -- on how to access and build on the new function.

Notice that the trend and the pressure here is all one way: Advertisers have essentially created a bidding war and will give money to any online service that best strips consumers of their private information. This chapter involves Facebook and FourSquare; the next one will feature Google. There's no commercial pressure to increase the privacy and anonymity of consumers, nor any incentive to compensate them for the valuable information that advertisers want. As yet, there's only the tiniest signs of resistance among consumers.

And unless you're willing to give up your computer and your mobile phone there's nothing you can currently do about it.

Related: Image from Wikimedia, CC.

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