I don't think this is a matter of forcing users to choose between modern technology and privacy. Based on their current revenue models, some of the companies may cease to exist if they can't mine user data for advertising revenue. Then again, Facebook and Twitter could charge users with an agreement that their data won't be used, and they will see no advertisements. I wonder how many users would choose this alternative. It is doubtful many would. So with these 'choices', would privly just shut down companies that use this data as a basis for revenue if widely adopted? Would this be a real positive for users?
Yes, there is a social contract in Web 2.0 that these services are being provided in exchange for data mining. If you post nothing but encrypted blobs you are breaking the contract and you should expect your account to be closed.
This service is actually worse than the previous ones because instead of mooching off other sites to host the data they actually host it themselves. There's no business model to pay for their hosting.
(let me take my Privly hat off and put on my Machine Learning Researcher hat) Facebook needs users far more than access to users' private communications. Their "like" button and the demographic data they collect is more valuable than crawling messages between users. Privly could slightly impact the efficiency of advertising, but it won't shut down advertising as a business model. AdBlock poses a bigger risk for that.
(Privly hat back on) Our biggest challenge to legitimacy is interfacing with the web in a way that is private and allows sites like Facebook to "news feed" something only if the user reading the news feed can read the content. This is why we need to work towards a standard where both Facebook et al and Privacy can coexist. There are many options in this area, with differing amounts of privacy, but it is ultimately up to the posting user to post and the host site to decide what to do with it.
But if something like Privly was "done right", wouldn't everything — friends, profiles, likes, etc. — be encrypted? I think anything that really provides privacy would be too parasitic to Facebook; that's why I prefer a "clean break" approach like Diaspora/Appleseed/OneSocialWeb. Time will tell, I guess.
It is up to the individual user on what level of privacy is enough for them.
I think this has great potential as a cross posting mechanism. I can't switch to Diaspora because of network effects. How do I leave my family at Facebook? With Privly I could cross post very personal content, but not give the content to anyone outside the family.
Odds are it is market forces that will set such a standard. So if AdBlock is stronger in moving the market, then AdBlock is a better avenue towards a privacy standard.
There may be a peculiar outcome though. If AdBlock manages to decrease demand, will that increase the cost of advertising or increase its effectiveness? Those not adblocking would be the ones easily sold.
Advertising profits not dropping could be enough of an illusion so that, with enough adblocking, one could try a Groupon in reverse.
@wmf: one business model would be users paying for privacy themselves.
Freemium for facebook would be kind of ingenious, but it would almost certainly lead to the 'premium' accounts getting higher visibility in viewers feeds.
Is your aunt glenda passing away going to make your feed? Nope, because Coca Cola wants to tell you that they've got a limited edition coke bottle out for the 2012 Olympics.
FB also does this already, I saw a sponsored post when a friend liked eBay, it appeared at the top of my news feed and said "This is a sponsored story".
It would definitely change things in a big way - especially for services that rely on acquiring user data in order to be profitable, as you mention.
However, I don't agree that Privly would necessarily end the current set-up entirely. It might result in a little more bargaining power for users who, up until now, haven't had any leverage in the user-host relationship.
One outcome that doesn't mean the end of user data-based businesses is where they modify their 'terms of use' to restrict or ban the use of this service. In this case, it's not clear how users could wrest back much control over their information, however.
As with any disruptive technology, the "your enhacement ruins our business model" is really your problem, not mine.
The per-user profit of Facebook (in very fuzzy numbers) is on the order of $1-$2. Presuming there would be some feasible way of capturing this or its equivalent revenue by non-advertising means, a subscription-based service is feasible.
The real problem is that most users are subscription-averse, which has a knock-on effect of making it difficult to attain sufficient network size (and network effect value) while charging fees. Advertising has been the low-friction means to do this for the past decade or so.
An alternative model is to find a sufficient subset of users who are willing and able to pay for a service to underwrite both the remainder and the network growth effects. Craigslist would be the prime example of this. A small fraction of advertising in a small fraction of markets underwrites the remainder of the firm's activities.
Privacy is a feature, not a product. And I mean that in the literal sense, not the dismissive condescending way that people use it to describe startups they don't take seriously.
Privly is not disruptive because it doesn't remove people's desire to use Facebook. If it did manage to kill Facebook's business model, people would not be happy because it doesn't replace Facebook.
Of course this is a moot point because in general people don't care about privacy, so Privly can remain safely parasitic for the indefinite future. Eventually some major event or series of events may get people to take privacy more seriously, and in that case Privly would be well positioned for growth, but were such a sea change to occur Facebook would be the first casualty with or without Privly.
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