Facebook’s Potential For Putting User Data to Work Off Network Stirs Debate

Facebook’s desire to further put its user data to work for the social network makes sense because advertising is a major profit driver, and the company is looking to impress investors ahead of its IPO.

Facebook’s business model revolves around serving people highly relevant ads, so it should come as no surprise that the company said recently that at some point it could launch an advertising network to display ads outside of its platform.

Privacy advocates are raising questions again, calling the company’s proposed changes an inadequate attempt to quell privacy concerns, but Facebook says it is simply trying to be forthright with its users and potential investors.

In an explanation of changes document it posted on May 11, Facebook wrote, “We’re also clarifying our existing disclosure that we might show ads off Facebook to explain that, if we showed these ads, they may or may not include social context (such as whether your friends have ‘liked’ a particular business).”

“Given how much Facebook knows about its users, the network could arguably be much more effective than current ad networks which base their guesses about you on cookies placed according to the websites you’ve visited. Of course, it would likely only work if you stayed logged into Facebook while surfing the Web, unlike with a cookies-based approach,” reports Forbes, which also cites a privacy expert who says other companies like LinkedIn and Amazon are already doing it.

Facebook says it is simply responding to an audit.

“[T]he Irish Data Protection Commissioner’s Office — which regulates our European affiliate, Facebook Ireland — encouraged us to enhance our Data Use Policy to be even more detailed about how we use information,” wrote Facebook Chief Privacy Officer Erin Egan in a statement.

Even if the privacy of your data on Facebook and how the social network uses it doesn’t concern you, the changes it plans to make to its Data Use Policy are worth checking out. A redlined version [PDF] even shows line by line what was deleted and added to the document — a highly transparent move for a company so often criticized for infringing upon user privacy.

The changes Facebook is proposing to its policy aren’t final and to get user input on them the company will host an interactive video question-and-answer session on Monday.

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