Social networking giant Facebook Inc (NASDAQ:FB) recently found itself in an embarrassing predicament. That is, documents surfaced proving that it was clearly studying the behavior of teenagers’ online activity that may have ultimately been used to target youths while in an anxious or vulnerable state.
Facebook denies the data was ever actually used to determine which teens see certain ads, and when they might see them. Rather, the company was simply trying to illustrate that the day of the week has a lot to do with what’s going on in a young adult’s head:
“Anticipatory emotions are more likely to be expressed early in the week, while reflective emotions increase on the weekend. Monday to Thursday is about building confidence; the weekend is for broadcasting achievements.”
The fact that the information wasn’t explicitly used to capitalize on teenagers’ stress or feelings of inadequacy, however, isn’t quite the alarming point.
What Happened?
Australian newspaper The Australian first broke the story after coming into possession of a 23-page presentation Facebook made to four of Australia’s banks. That country’s Facebook arm, which doesn’t operate as a carbon copy of the U.S. unit, had commissioned its own study to better understand how kids (with an average age of 16 years old) feel based on what they do while logged into the social media’s website.
Matters considered in the study include the number of Facebook friends a young person may have, their relationship status, and how often they access the site.
Facebook was adamant that it wasn’t using the information collected — collected with the appropriate permissions, by the way — to deliver certain advertisements to certain individuals. Rather, it was collecting aggregate information to demonstrate to the four potential advertisers the nuances of using FB as a marketing tool. The company even went on to say its own rules weren’t followed, and an investigation of the breakdown was forthcoming.
That’s not the point, of course. The shocking aspect of the story is that Facebook would even be thinking about these things in the first place.
Even more shocking than that, however, is that anyone is surprised Facebook is doing this kind of research.
Not the First, And Not the First Time
News flash: Facebook is tracking everything you do via its website, trying to figure out how to best extract revenue from you. The things you “Like,” the words you use in your messages and even the pictures you upload.
Yes, Facebook is even working on trying to automatically figure out what your pictures are. If you take a picture of a kayak, its AI can likely figure it out and start showing you more ads for outdoor equipment.
Given its most recent advertising tool, Facebook may even have a pretty good idea of what you’re doing online even when you’re not using the Facebook site.
That being said, don’t think for a minute it’s just Facebook quietly prying into your personal life, crossing a line you may not even realize is being crossed. Alphabet Inc (NASDAQ:GOOGL) knows more about you than you know based on your browsing behavior, and Amazon.com, Inc. (NASDAQ:AMZN) is getting deeper into that game as well.
And yes, like Facebook, those other outfits are digging uncomfortably deep, perhaps aware that you may have marital problems based on your search for marriage-help books, figuring out you’re planning a vacation by scanning for keywords in your email … you get the idea.
It’s also not as if this is the first time owners of FB stock have seen this kind of thing from the company either.
In 2014, Facebook was blasted by critics for amping up users’ anger or elation. Though it was just an experiment driven by changing which news appeared in a particular person’s news feed, it created something of an emotional roller coaster for nearly 700,000 people during the span of the experiment.
And what do you really think the company’s artificial intelligence ambitions are all about?
In its defense, the company is simply trying to figure out how to produce more revenue. That’s what it’s supposed to do. And, technically, all users gave Facebook permission to do so when clicking on the ‘I agree’ button upon signing up … all the fine print nobody reads. The company is also likely being honest when it says it wasn’t specifically targeting anxious youths with certain ads; banks don’t likely care too much about the demographic.
Again though, that’s not the point.
The concern should be that a seemingly harmless amount of data collection this time has made the public a little more numb to the idea. The next time, Facebook can take another small, invasive step. That one will be shocking for a day, and then we’ll become numb to that one. Then Facebook can trod a little deeper into our personal lives, all in the name of advertising.
As evidence of how (dangerously) tolerant we’ve become of having no privacy online, think about the level of violent outrage that would have materialized had this news surfaced 10 years ago, when Facebook was in its infancy.
Impact on FB Stock
If you own Facebook stock, don’t sweat the news too much. It’s a gaffe to be sure, but like most gaffes these days, it will be forgotten soon enough. There’s too much else going on to linger on this outrageous but not uncommon intrusiveness.
In fact, as mercenary as it may seem, knowing the company is willing to continually push the envelope of privacy and decency bodes well for FB stock holders; there’s a reason Facebook can extract more average revenue per user than almost any other website.
On the other hand, if there ever comes a time when regulators, legislators or consumers put their foot down and put an end to this kind of profiling, it could crimp Facebook’s lifeblood.
That’s not apt to happen anytime soon, though, if ever.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
