Nyamweya is a global researcher with many years of experience on practical research on a diversity of topics
Facebook, Free Labour, and Informational Capitalism
Facebook is a non-profit organization that is headquartered in U.S.A. The website was launched in 2004 by Mark Zuckerberg alongised his fellow students, Hughes Chris, Saverin Eduardo, Moskovitz, Dustin, and McCollum Andrew. Facebook is a free and prevalent social networking website providing a platform for its users to register and create their profiles, upload such things as videos and pictures, chat via messages and stay in touch as colleagues, friends and family. In addition, it provides various public features like groups, pages, marketplace and events among others. This allows registered members to carry out several social related activities. A business model is a method that a business uses to acquire profits and revenue. In essence, it’s the precipitate of the way that a company (Facebook in this case) intends to serve customers. The subsequent part analyses the business model behind facebook alongside the power relations and economic structure of this social media platform.
Facebook is a company that is greatly popular and envied by many investors, which is also regular on the news for making sterlin performance. However, very few people understand that approximately 85% of revenue generated by Facebook comes from advertisements that are placed on its website. By the end of 2015, Facebook generated approximately $14 Billion which constitutes 85% of the revenue. This implies the company makes more money compared to two largest advertisers, Google and Apple in USA simply by advertising revenues. This makes the business model for this to be truly inspiring. Facebook has regularly been ad supported and most probably its future will depend on advertisements. The remaining 15% is generated from commission or revenue share obtained from the sale of virtual goods including paid credits for Farm Ville and other organizations of which Facebook receives a commission from such transactions.
Facebook’s self service advertising platform is the largest source of revenue. A user can opt to set up his or her advertising campaign on Facebook which is then displayed on the sidebar of the site’s pages. These include the profiles of users, Facebook pages, events, third party applications and groups.
The granular targeting features by Facebook have been a key advantage for the company since it has increased the target capabilities. This includes the ability to limit advertising to specific areas where there is a potential for particular group of clients through use of the target variables which include network, age, gender, relationship status and profile keywords. The self-serve advertising platform is also used among lawyers, doctors, restaurants and other small businesses Business..
Facebook also makes a significant sum of money from “engagement ads” products. These are mainly used by larger corporations. All engagement ads are placed on the website’s homepage. All users that are logged in are able to interact with ads that are placed on the site. Apparently, users are the most important resources through which Facebook makes money. This is because, without users, advertisements will not be relevant on the site.
In essence, the norms surrounding privacy are being transformed and new services and apps are continually emerging for the users to display their information. It has been predicted that new types and more information will continue to be shared as the years go by. Social media which include Facebook, Twitter, Google+, LinkedLn among others require users to share information to others. For instance, Facebook utilizes the personal information of its users including age, relationship status, and geographical status, among other personal aspects in attracting advertisers who want their advertisements placed on targeted users. For instance, if a user opts to alter his relationship status to “engaged”, there is a possibility of being targeted with advertisements related to weddings.
Under capitalism, the aspect of privacy is simply considered as an antagonistic value which despite being regarded as a universal value in protecting private property has been greatly undermined by corporate and state agencies which are only interested for capital accumulation. While capitalism is centered on protecting privacy for companies and the rich, it has opted to violate the privacy of citizens and consumers. In the context of Facebook, it ought to be considered that the concept of privacy should be advanced to citizens and consumers from corporate surveillance. Stated differently, personal data should not be disclosed to third parties without the consumer’s knowledge and consent. These privacy values have been ignored by Facebook.
According to Marx (1867), individuals are exploited when they are not paid for their labour. With considerations that it is the user’s sharing and works that makes Facebook valuable and a digital goldmine, it is important that the users should be paid some commission out of the enormous profits generated. Indeed, it is a cause for concern that users who make Facebook what it is are not valued or given anything to compensate for their efforts. Another consideration that should be made is that Facebook users are not given any monetary rewards for their contribution to the site which includes socialization and self expression. Social attention and personal connection could be considered as a form of currency. According to Marx, workers should be compensated according to the value they bring to the employer. As it stands now, this is not the case for Facebook users as no user is paid any some despite their contribution being valuable to the company.
The aspect of exploitation came into the limelight some two hundred years ago after being introduced by Karl Marx. Marx (1990) presumes that value is established through labour and despite many people acknowledging that value can be created by other factors other than labour, it is important to presume that labour is simply one of the various sources of value if we have to consider the argument by Marx. Marx reiterates that human beings harbour an essential natural relationship to the benefit of our labour and that the work done by them is a definite part of what they are. The current capitalist society greatly differs from other historic period since unlike in the past, workers are able to sell their labour in exchange with money. This is opposed to making objects which are then changed for other objects. The capitalists generate money by exploiting the value that is created out of the worker’s labour to the sense that the final wages received by a worker is only a small percentage of the general value that the worker has created. Consequently, the portion of the value that the worker has created which is not eventually returned to the same worker after recovering operational costs is considered as the exploitation rate.
In essence, the business model surrounding Facebook is based on using the value created by users in generating revenue. It could be relevant if the management of Facebook recognized this value and gave some form of monetary rewards to these users as part of its duty. As it stands now, there is exploitation of users since their time, data, information and effort is used and not paid.