Algorithmic Big Brother

There's a lot of FUD about internet companies harvesting personal data.

Don't get me wrong, I'm a privacy advocate: you should have the right to be as private as you like, and whatever data that is held about you by a third party should be disclosed to you, and accessible on request.

But let's not put the tin hats on every time we hear that Tech Firm X is harvesting your data. I'm sure they are, but ask yourself why. Google and Facebook aren't interested in my secrets. They are interested in

1. Selling my profile info to advertisers
2. Providing me a better service so that I keep coming back and they can satisfy (1).

You'll agree that point 2 is innocent/benign enough. If you have a fundamental problem with entities selling info to advertisers then stop buying things and stop using 'free' services. If you're not the paying customer, you're the product. Get used to it.

The issue, and where the media like to blur and sensationalise, is the definition of 'my profile info'. What info are they collating & selling, and what are they doing with it? This is where things get shady. The quick answer these firms all give, when asked, is a variant of point 2 above: that the data is used to offer better-targeted advertising and services to you the cust- consumer.

Right, but what data, exactly? And how are you packaging it up to the advertisers to whom you're selling it? The answer, in most cases, is that they are not selling the information like a secret service dossier - a big brown file on you. They are simply categorising you. The advertisers then say what categories they want to target, which could be broad (all females between 18 and 30) or very specific (chess players and sci fi fans in New York city under the age of 24). These firms then ensure you get hit by those adverts that match your category. They then track which ones you click and which you don't, and that gets reported back to the advertisers. In fact, in the case of social networks, these firms track every unsecured page that you browse and refine your categorisations accordingly.

Point is, the advertisers don't get the specific info about you. They get aggregated category data. Heineken don't know which beer I drink unless I tell them (by 'liking' or '+ing' a page of theirs); they just know that I'm in several of their key categories.

The categorising tech firms are as interested in me as a lawnmower is in grass. They don't have time/resources to compile a dossier on you or me. They have algorithms that profile us automatically and constantly, but primarily in order to meet the 2 commercial imperatives above.

So if you're worried about Google or Facebook or Apple prying into your private life, only the algorithms are watching.

Government agencies?  Different story: why would they be harvesting your data? Again, it's mostly algorithms, but there's no commercial imperative. So it's definitely personal and potentially nefarious. 

The battle for the living room

This article (ReadWriteWeb) makes a good case for the next big consumer electronics battleground being in the living room.

It mentions, but doesn't really expand on, the key success criteria too: content, intelligence and user experience. Two of these are radically from traditional media. User experience is generational: older generations are used to being served content, to 'tuning in' to a broadcast. Whereas kids these days are very selective, and fickle about their content - they have to be because there's so much of it. So how to find the middle ground? That will be the critical challenge, and I suspect Apple will crack it first because that's what they excel at.

Intelligence on the web is massive, literally: every click or tap you make is tracked by something, somewhere. At the very least, it's the site you are on, more likely it is tracked by Facebook (if you browser is aware of your Facebook account), Google (ditto) and a few of the common advertising cookie trackers. Attach that to your TV and movie watching habits and that's a considerable portion of peoples' lives fully mapped. But data capture is only half the story. To engage and monetize you have to use the data intelligently. That's where Google have the advantage.

Content (which the article mainly focuses on) is the same issue as traditional media: it is still king, but cheaper to produce than ever. Sure, good stuff is still expensive, but that's about production, not distribution.

There's one other aspect that the article does not mention, but that I think will be vital: social.  Sharing content is a big thing already, but there's still some friction when you do it. Imagine a monetized version where you get a micropayment whenever you successfully share a piece of content (like, say, a movie trailer). There's also the participation aspect of social: gaming. Currently, there are very few multi-platform online games: an Xbox player cannot play with a Playstation player online. On some games they can play against PC players, but for quick reaction games the PC players have the advantage of a richer, more responsive interface (a mouse has a greater more accurate range of movement, plus a keyboard has more programmable combinations than a gamepad). This limitation is tolerable because consoles are primarily about games, with media playing being a bonus feature. In the future living room, audiences will not tolerate being restricted to sharing only with others on the same platform.

Facebook's intrinsic value

At nearly 800 million users Facebook is a phenomenon, although not because of the aforementioned number.  Facebook's tech celebrity ancestors, Microsoft Windows and Google, have many more users.  [Microsoft even got (gets!) to charge each user a fee, which remains beyond Facebook's capability!] The reason for Facebook's hefty valuation is, basically its position as a media channel.  While more people use Google, they typically land, search, and head off to the intended destination, maybe clicking an ad or two on the way.  With Facebook, people loiter, like teenagers at a bus stop.  Average Google session: 20 seconds; average Facebook session: 20 minutes.  That's sixty times more advertising potential.  That may justify a high valuation to investors, but what about the intrinsic value of Facebook?

Well, let's take a look at the Caribbean context.  Most internet technology doesn't reach the Caribbean, either because the commercial aspects don't work (I can see it, but I can't buy it!) or because they are surplus to requirements (I don't needs Google Streetview because I know most of my island).  Yet Facebook has been a quiet phenomenon here, at least in Barbados.  Why?

First, there's the technical: there are no transactional complexities (buying, selling etc.) and Facebook comes included on most mobile devices, which is still by far the most common access platform to the internet in the region.

But there's also the cultural: social networks have always been extremely important to Caribbean societies.  The Caribbean (as in CARICOM states) is a micro diaspora, a plethora of small towns: 15 million people, scattered across 500,000 square kilometres and 20 states (that's less than 5% the size of Europe in half the number of countries).  Communities are close-knit, yet inter-island living is also very common (for work, for school, to visit relatives, for vacation and sporting events).  Such conditions are an ideal structure for an online social network.

There are also the social habits: Caribbean folk are gregarious, be it at church, beach, sports event or rum shop, we bump into the same people quite often and are usually slightly wary of strangers,  unless they are tourists, in which case we'll be polite and chatty because they typically have no long-term value in our social networks.  Our social networks are also important for commerce: most folks know that the way to get best service/price is to know someone in the company, who can do you a deal.  Even if the deal is just a standard deal, the common perception is that it's always better if you know someone on the inside.  If I'm buying a car, the first question I ask is "who do I know in car dealerships?".  Social networks matter here.

But does Facebook matter?  Sure, it's popular.  But is it adding value?

I'm not sure it is, at least not in the way that an investor might hope.  I've been using Facebook since about 2006, when I lived in Bermuda and it was a great way to keep in touch with family & friends in UK and in the Bermuda diaspora (Bermuda is a big expat crossroads because strict work permits mean the expat workforce turnover is quite high).  But my way of using Facebook has changed in recent months.

Most of us only use Facebook for the newsroll: that perpetually scrolling screen of updates from friends and groups we subscribe to.  I started using Twitter, and the interface is very similar, scrolling through people's updates (tweets), except in Twitter you 'follow' people's updates - they don't have to accept you as a friend first.  So you can follow your favorite celebrity or publication or acquaintance or friend without having them potentially knowing all about you, your friends, your photos etc.  So I wanted a way to splice the two together into a single newsroll, as well as send an update to both at the same time  (or toggle to just one for those private, friend-only thoughts). Enter Tweetdeck.  Just what I wanted: it supports multiple Twitter accounts, allows you to comment on and 'like' people's updates, including photos, and it includes Google Buzz too.  Perfect.  It's owned by Twitter, too.

Now, I no longer use Facebook.  Oh, I subscribe to it, and I update it - still very much an active member of the social network.  But the adverts?  The apps? All these 'value-added' services? Nah.  I just have a screen full of updates, grey for Twitter, blue for Facebook and red for Buzz.  And that's it.
Consumer 1, Producer/Investor 0.

But for how long?