Intersecting Minds: Education, Business and Technology at the North Carolina State Jenkins Graduate School of Management

Facebook’s Pot of Gold at the End of the Rainbow | February 20, 2009

Paul LaMonica has penned an interesting story today about why he hates Facebook. Besides the fact that he doesn’t really get why people like connecting to each other on a level more personal than Blackberried e-mail messages, his main beef is with the Facebook business model. And he has a point.

Facebook still hasn’t figured out a way to make money, despite the fact that they’re sitting on one of the most valuable treasure troves of information out there. When people post personal interests to their Facebook profile, this data is captured and stored by the company. This includes favorite movies, books, stores, places to shop etc… Getting access to this information would be a gold mine for any company looking to better segment and target particular audiences. Imagine that you’re the CMO for a Fortune 500 company and somebody told you they had personalized information for 175 million potential customers. You’d flip your lid.

Unfortunately, there’s one little problem. Facebook doesn’t have the right (either legally or ethically) to fork all that information over to those who would use it for marketing and advertising purposes. The uproar last week over the Terms of Service spat would seem like childs play if Facebook’s users found out they were being contacted in any way because Facebook sold their personal information to a private organization. The whole concept just sounds creepy.

That’s the challenge for Facebook right now. They have the pot of gold at the end of the rainbow. They can see the rainbow (all that information), but they just have no way to access it and use it. Whoever in that company can figure out this conundrum will take Facebook to the upper echelon of internet-based companies.

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