More than 200 pages of confidential internal Facebook emails released by a British lawmaker show the social media giant’s business model requires that it make “a lot of money” to be profitable.
A 2012 email from executive Sam Lessin to founder Mark Zuckerberg states: “Our mission is to make the world more open and connected and the only way we can do that is with the best people and the best infrastructure – which requires that we make a lot of money/be very profitable.”
Lessin said his “assertion is that for us to be very profitable over a long time, we have to be in businesses/have a business model where we get more profitable the bigger we are (a return on scale business).”
“Conversely, we cannot be in a commodity business or ‘sell off’ our assets in a way that transfers wealth from ourselves to others.”
Lessin describes the company charging developers for a variety of services and says users “will eventually appreciate things like ever better targeted ‘ads’ as a real benefit.”
He explains one route to profits is “having a powerful monopoly like a state dictate that you are the only way to do something.”
A second is doing something no one else can, and a third is making more money because you’re bigger than anyone else.
“We need to focus on businesses where we are better/more profitable than everyone else because we are bigger than everyone else,” he said.
He cuts to the chase: “There are two clear channels via which to monetize information (1) Advertizing/engagement & re-engagement (Information makes distribution more efficient/effectively ads a multiplier to our first return on scale business) (2) Merchandizing/customization (Information allows companies/people to do better things for their customers, on top of which they can scale revenue and profitability….”
The documents have been posted online by the U.K. Parliament, which obtained them last month from a company suing Facebook.
Business Insider reported the documents are under seal in California but were published using parliamentary privilege in the U.K.
They also show, the report said, Facebook “whitelisting” firms in return for access to data and taking “aggressive positions” against rivals, such as Twitter’s defunct video app Vine.
Facebook responded that the papers are part of a “baseless” lawsuit and were “misleading” unless Facebook explained them further.
Damian Collins, a Conservative Party politician who is chairman of a parliamentary committee, prefaced the papers with a summary of what he sees as some of the most explosive revelations.
His concerns were over “whitelisting agreements” that gave companies including Netflix and Airbnb access to friends data after Facebook introduced new privacy policies in 2014-2015.
Collins said a recurring theme was an “idea of linking access to friends data to the financial value of the [app] developers’ relationship with Facebook.”
He also said the documents show Facebook “taking aggressive positions against apps,” Collins said.
Business Insider said it included “email evidence showing that Facebook CEO Mark Zuckerberg personally approved a decision to deny access to data for the now-defunct Twitter video-looping app, Vine.'”
“Facebook made it difficult for users to know about changes it made to its Android app because they were controversial. The changes enabled Facebook to collect a record of calls and texts sent by users.”
Collins obtained the documents from Ted Kramer, the founder of a software company called Six4Three, while Kramer was on business in the U.K. last month.
The company sued Facebook after Facebook changed its policies in 2015 and destroyed its business app, named Pikinis.
A California court order had placed the documents under seal, but the Digital, Culture, Media, and Sport Committee published them under U.K. parliamentary privilege, believing them to be in the public interest.
Collins explained in the Insider report: “There is considerable public interest in releasing these documents. They raise important questions about how Facebook treats users data, their policies for working with app developers, and how they exercise their dominant position in the social media market.”
Collins also pointed out that Facebook used Onavo to conduct global surveys of the usage of mobile apps by customers and apparently without their knowledge.
“They used this data to assess not just how many people had downloaded apps, but how often they used them. This knowledge helped them to decide which companies to acquire, and which to treat as a threat.”
In a change that enabled Facebook to collect calls and texts sent by users, Collins said, “To mitigate any bad PR, Facebook planned to make it as hard of possible for users to know that this was one of the underlying features of the upgrade.”
BBC News said the seized documents are marked “highly confidential.”
It reported that among the clearly supported conclusions were that Facebook refused to share data with some companies, causing them to fail, and there was considerable discussion of the financial value of providing access to friends’ data.
The correspondence includes emails between Facebook and several other tech firms, in which the social network appears to agree to add third-party apps to a “whitelist” of those given permission to access data about users’ friends.
The pages reveal at one point Zuckerberg made clear his intent to make lots of money.
“It’s not at all clear to me here that we have a model that will actually make us the revenue we want at scale. I’m getting more on board with locking down some parts of platform, including friends’ data and potentially email addresses for mobile apps. I’m generally skeptical (sic) that there is as much data leak strategic risk as you think… I think we leak info to developers but I just can’t think of any instances where that data has leaked from developer to developer and caused a real issue for us.”
Facebook also is confronting headwinds over the threat to free speech posed by its monopoly status.
WND CEO Joseph Farah has warned, “Has anyone seriously considered what the tyranny of these monopoly companies is doing to the ability of our citizens to govern themselves, protect their privacy and sustain institutions like free speech, freedom of the press and freedom of religion?”
Farah said it’s been nearly a decade “since I have been blowing the whistle on Google – calling the company ‘evil,’ explaining that we were, consciously or unconsciously, ceding to it the most private information, allowing a mega-monopoly international conglomerate in bed with tyrannical regimes around the world to turn each of us into commodities.”
“But things have only gotten worse since then. It hit home with me when I saw the company I built from scratch more than 20 years ago, my life’s work, ravaged by the cartel’s wrecking ball – reduced in revenues by more than half in 18 months.”
He continued: “Backed into a corner, last January I went very public with how the cartel was attempting to exterminate the alternative independent media that sprung up in WND’s wake in the last 20 years. They are still determined to snuff us out, I believe, before the next presidential election year of 2020. The only people I could turn to were you – those who came to WND because you recognized what we were doing, what we were about and what our convictions are. And most of all, you recognized why it was necessary that this exercise in truth-seeking without fear or favor not be knocked off by a club of spoiled, soulless, pompous, greedy, presumptuous super-billionaires who sought to commit bloodless barbarism never imagined by the most diabolical totalitarian governments in history.
“I realize now the phrase ‘Speech Code Cartel’ doesn’t even come close to capturing the imminent danger this cabal poses to freedom.
“While the so-called ‘progressives’ carry on about their delusion of Russian intervention in the 2016 election, what’s really happening behind the curtain is the theft of our culture of independence, self-governance, individualism, liberty, privacy, sovereignty, Judeo-Christian morality and, yes, free elections.”
He said it is up to the American public to determine the result.
“For now, I will simply ask you, politely, but urgently, to help sustain us with your prayers and your financial support as we go toe-to-toe with this beast.”
He listed options:
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