scoble & facebook: nevermind owning the data, share the gains

One of the bigger stories today in the blogosphere is that Robert Scoble has had his facebook account blocked after running a script to scrape the data out of his account so that he could take it, and one assumes use it, elsewhere. This is likely to kick off a flurry of posts about the ownership of data, with most bloggers framing it as an either/or debate. I think it’s actually an opportunity to completely rethink the business model that, at present, requires each side – the user and the provider of the service – to give something valuable if they are to also gain.

Mathew Ingram notes that the most interesting part of this particular story isn’t what’s happened to Scoble, but whether it is users, or facebook, which owns the social graph that one creates when they join and interact with friends using the service. Ingram writes:

"Who does that data belong to? It might have been collected and
organized in the way it has because of Facebook’s tools, and he
obviously agreed to the terms of use that he has since broken, but
there’s no question that the information itself should belong to Scoble
(and the rest of us). So what rights should he have when it comes to
removing that data from a site like Facebook? And who gets to decide?"

It’s an interesting point indeed. At a recent dinner hosted by Yahoo, I suggested that as users of social networking, photo and video sharing, and other social software based services become aware of the value of their data and the (sometimes scary) ways it’s being gathered and used by the companies that supply those services, there’s almost certain to be a backlash.

Over the past few years, we’ve seen the death of the vast majority of subscription based online community and social networking services. That model has been replaced by the provision of consumer facing services which are free to the consumer. The most basic of these use banner ads or product placement to target a whole audience or random members within that audience. That model has evolved into one where the better targeted an advertisement can be made, the more advertisers will pay for the opportunity to gain access to those consumers. 

Social networking sites like Facebook can build an incredibly powerful profile of individual users – they know who your friends are, how you know those friends, where you live, who you communicate with, the frequency and patterns of that communication, and more. That data is valuable and, having provided a service for free, facebook, yahoo, google or whoever else is providing the tools and infrastructure is right to think that they should be able to get a return on that investment.

But why not go a step further and make users partners? Google AdSense, Amazon Associates and other similar advertising programmes work because they do exactly that. Every time there advertisement is displayed on a partner website, they get data about who that visitor was and where they came from. The programme also then shares revenue, usually based on click through rates or actual purchases, with the site owners. Make no mistake, just about every blog that makes money, but which is too small to have it’s own ad sales team, makes that revenue by displaying Google Ads.

I think now is the right time for Facebook, MySpace, Bebo, Yahoo or some other social media provider to do the same for social networking – let users become partners, help them to willingly increase the value and validity of the data collected about them by giving them a percentage of the revenue that enhanced data generates. The more users voluntarily tell the service, and the more they let their usage behaviour be analysed, the greater their potential take.

So who owns Scoble’s Facebook data? The debate is likely to be between those who think Scoble should own his own data whilst those on the other side will argue that, by providing a free service in exchange for data, Facebook and others offering similar services have created the necessary "consideration" aspect of a binding contract and should be allowed to seek for a return on their investment.

But framing the debate as one with two opposing sized misses the real opportunity here – one that benefits consumers, business and advertisers – which is for the answer to the ownership of data question to be both. That is, by giving users control over what data they do and don’t allow to be collected about them and how that data is to be used, but encouraging them to provide such data on the grounds that they will then get a percentage of the additional revenue that data generates, social networking sites and users can both benefit from that data. And, so long as that data is used in ways where there is consent in what is gathered, transparency in how it’s used, and sharing of it’s value, the question of who actually owns it will be much less relevant.

[Note: This is my personal blog. All views expressed in this and other posts here are my own and not those of my employer.]