Here is a Guardian article that’s all about the trouble Big Data is having with its primary business model. Supposedly the model is to track (spy on) users, then use what Big Data learns about us to do better advertising (and then charge a lot of money for that). The article says this model’s not going so well (for reasons). But I was rather more interested in a tidbit about the other business model that is working rather better for Facebook:

The other profitable line for Facebook is sneakier, and possibly longer-lived. The company can easily see which of the commercial/brand/business pages on its service are growing fastest. These correspond to the businesses that are exerting the most energy to get their customers to follow them on Facebook and making Facebook most integral to their daily business.

When Facebook’s algorithms predict that a business is well and truly reliant upon Facebook to reach its customers, it simply switches off the business’s ability to reach those customers, so that new updates only go to a small fraction of the company’s followers. Thereafter, a Facebook salesperson gives the business a call and offer to turn the tap back on – for a price. That’s not the surveillance business-model. It’s a much older one: the drug-dealer business-model, where the first taste is free.

What’s going on here is that instead of spying on consumers to sell more and better ads, Facebook is instead monetizing its own network effects. Businesses have to pay up; they can’t just “go somewhere else” because all the people they need to reach are (for the time being) stuck on Facebook too. It’s one big sticky wad of flypaper, and the glue is Metcalfe’s Law (basically, networks are more valuable the more people who use them).

This is somewhat related to my #Pornocalypse ranting because access to social media is so difficult for people doing adult business. Big Face says “we don’t want your stinky porn on our network” and an entire industry is locked out of one of the most useful networks on the planet. Multiply that by basically every other social network of size except Tumblr and Twitter, and it’s a serious problem. That’s why we are so sensitive to #Pornocalypse rumblings at Tumblr and Twitter and on any other more minor social networks where adult content is still welcome: it’s far too easy to imagine a world where marketing absolutely requires access to social media, and in which adult businesses are completely excluded from those networks.

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