Facebook and the Cost of Your Privacy


Facebook is nothing special.  Its features are not revolutionary or technologically groundbreaking.  It wasn’t the first social networking or online profile website.  In fact, there are very few unique elements to Facebook that you cannot find elsewhere on the internet.

However, Facebook is not only the most popular website on the planet, its millions of users willingly dispense their most personal information.  We upload photos of our children, talk about our vacations and likes and dislikes, and share our marital status, gender, hometown, religious views and birth date.  We identify our family members and point out our friends.  We publish our exact location live via our smartphones’ GPS.  Some of us would probably enter our social security and bank account numbers if there was a box for it on the Edit My Profile screen.

People are trusting by nature, and we expect others to treat us like we would treat them. We trust Facebook to keep our information private, sharing it only as we would like.  We forget the company is a for-profit corporation.  The heads at Facebook may be the nicest people in the world, but they still have to explain themselves to the investors that forked over the megamillions needed to fund such an ambitious project.  Those investors want one thing: a high rate of return on their money.

Cost of Goods and Services

How much do you think you pay for your Facebook account? Here’s a hint: it ain’t free. Facebook earns revenue in two ways: they sell advertising and they sell information. You are funding their massive consumer information and behavior database with your own personal information. You are paying whether you realize it or not.

The Country of You

It is not Facebook’s fault if you do not understand the monetary exchange rate of your personal information. Think of yourself as an independent country, and your personal information as a currency, with each specific item a denomination. Facebook works in US Dollars, so you need to determine how many USD each item of personal information is worth, so you can exchange your currency for goods and services.  Your hometown may be worth $1, your list of friends worth $10, and your birth date $50.  Every time Facebook sells that piece of information to someone else, you count that toward your subscription cost.

Here is a breakdown of how much I think I pay for my Facebook subscription.  It’s up to me, as King of the Country of Eddie, to determine how much I believe each denomination is worth. Your country’s exchange rate will vary, based on what information you hold dear.

Country of Eddie Denomination Equivalent in US Dollars
Hometown $1
Religious Views $5
Profile Photo $20
Workplace $20
List of Friends $40
Birth Date $60
The name of a family member $100
Home address $300
Photo of my child $500
The fact I play Farmville * $1,000
*I don’t really play Farmville (please don’t send me any sheep).  But if I did, it would definitely take $1,000 for me to admit it.  Also, Please don’t click any ads within the Farmville (AKA “Scamville”) game. See this TechCrunch post for more info.

If Facebook shares my hometown one time, I have paid $1 for my subscription. If they share all of my information one time, I have paid $2,046. If they share it 500 times, I have paid $1,023,000.

Since $1M is a lot for me to pay for my Facebook subscription, I have determined I am overpaying. I can do one of three things: continuing to pay too much, stop using the service altogether, or reduce the amount of Country of Eddie money I am spending.  I vote for the third option.

I can reduce how much I pay for my Facebook subscription by reducing the amount of information I provide via all those text boxes on the Edit My Profile screen, and how much I allow them to share with others.


By simply using Facebook, you have agreed to allow them to use some of your personal information without any further consent or control. For example, they know when you perform actions, such as “liking” a post, creating a photo album, or sharing a video. They log these actions, and can distribute the information however they want.  Think of their use of this personal information as overhead, from an accounting perspective.  In order to use their site, you will be spending some very small denominations from the Country of You.

Balancing Facebook’s Budget

You can control how Facebook spends most of your currency. You must be diligent and provide the oversight yourself by managing your Privacy Settings.  If you specifically tell Facebook they cannot sell some bit of personal information, they are legally required to keep it private.

They do get sneaky, so you have to watch them like a hawk.  It seems that every Facebook update includes a new privacy setting defaulted to Allow.  Then, they hide a simple setting into three or four confusing paragraphs.  I literally had to read their most recent privacy option (“Using Facebook to personalize your experience on the web”) three times to understand whether I should check or uncheck the little box.

They do this on purpose. They overload you with information because they know you don’t have the time or patience to read the whole thing.  If they really cared about your privacy, they would have a setting on the website that said “Only share my information with Friends” which would apply to everything you do on the website. LinkedIn.com does a much better job of clearly outlining your privacy options, and sets a good example Facebook should follow.  Check it out on the LinkedIn Edit My Profile page (you must login to see it).

Here is a screenshot of a single privacy setting on Facebook (click it to enlarge).  Is this confusing to you? Leave a comment and tell me your thoughts.

Facebook Privacy Setting (click to enlarge)

You should spend some time learning how to customize your Facebook privacy settings. Time is money, and I think this is money well spent.

Oversharing is Overspending

When you share your information publicly, you are allowing Facebook to spend your currency at their whim.  If you don’t need to share some bit of information, then mark it as private via the Privacy Settings, or better yet, don’t even enter that data into the website.  Resist the urge to fill in all the blanks.

Facebook Owns Your Data (Until You Delete It)

No matter what your privacy settings, never forget that Facebook legally “leases” your data. It says this very clearly in the Facebook Terms of Use.

“For content that is covered by intellectual property rights, like photos and videos (“IP content”), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (“IP License”). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.”

Facebook Terms of Use

The only way to truly protect your data is to delete it, although that may be a bit extreme for us Facebook junkies.

Don’t Hate Facebook

I didn’t write this post to scare you away from Facebook. It has revolutionized the web and made the world much smaller. Never before has it been easier to stay in touch with friends and family. The commenting system is unparalleled, and is the pinnacle of how social networking should work. I use Facebook regularly (friend me at facebook.com/eddie.krebs) and thoroughly enjoy the experience.

I simply want you to understand the value of your personal data. If you want to share your information to extend your personal brand, Facebook is just about the best way to do it. In this case, your personal information is something you WANT to share and that’s great. Just don’t overshare.

Other Websites

Remember, Facebook isn’t the only one with this business model. It is a prevalent model for free sites, and social networking sites in particular, since they store so much more personal information. Take control over how they spend your currency!  No one  else is going to protect your investment in you.

Further Reading

If you have a few minutes, I wholeheartedly recommend you read the content on these web pages.

Tags: , , , ,

6 Responses to “Facebook and the Cost of Your Privacy”

  1. Yvonne Thomas-Brooks Says:

    I am so happy you wrote this article. When I teach the social media class, I always have one or two people who want to feel more confident & safe using Facebook, Twitter, etc. After they see the business benefits and R.O.I. of social media, it’s usually not too difficult to convince them to join in the fun. The safety factor, however, is always looming. Not participating on social media is no longer an option. Taking the time to read the articles you referenced in this blog will definitely empower the user to stay safe and build a healthy network of buyers and sellers!

  2. Sandi Rodrick Says:

    It’s not just the kids of today putting things out there on the internet that are better left private or unsaid, there are just as many “adult” kids putting things online that are better left for a face to face meeting or not published/said at all. This is a great article to remind us that while Facebook and the other social sites are wonderful for creating astounding opportunities of varying degrees of excitement, they are also innocent stepping stones to the theft of one of our most important possessions – our identity. Our parents have been right again – “everything in moderation!” Thanks, Eddie for this giant reminder.

  3. Suzie perlstein Says:

    I am also so happy you wrote this, and I have posted various warnings on my FB page as well.
    FB hides the various boxes relating to privacy. you really need to dig and dig to get to all of them. At this point I am as private as I can be and I only allow certain friends to post, because in addition to all the stuff you wrote, anything you “like” or anyone else posts on your wall becomes part of the great cloud…very bad…
    I think the only solution is to 1) have a business only FB page, NO personal information on it at all
    2) remember: never write anything anywhere you do not want published in the NY Times.
    I have found snippets of emails I wrote to former managers in other companies I worked for, along with all kinds of parts and pieces of things I wrote…nothing terrible, thank goodness, on google.
    Face Book is NOT a thing to be trusted, not Twitter, FB, My Space, none of these. Not even Linkedin. Thanks for reminding us…and by the way…can I post your blog to my FB page? :-))
    And Eddie: why are you playing Farmville????? if you have that much free time, call me daily in case I have an IT question, OK? :-))))

    • Eddie Krebs Says:

      I don’t actually play Farmville, although I know many people who do. Just an example of the behavioral data that Facebook collects.

      Thanks for your comments!

  4. Deborah Gaither Realtor Delivering On The Promise Says:

    Simply but Sincerely..Thank you!
    This is very useful information and I do plan to share it.

  5. La'Kisha Mahan Says:

    Wow! Thanks for this huuuuge bit of info.

Comments are closed.

%d bloggers like this: