Can Facebook Balance Privacy With Profit?

By Justin Lafferty 

Facebook’s most valuable property is also the thing it can’t afford to sell: personal information. As Chief Operating Officer Sheryl Sandberg spoke about advertising and revenue at the IAB MIXX event Tuesday, The Wall Street Journal went deeper into the internal struggle between the value of Facebook’s treasure trove of users’ information and its promise to protect it.

Facebook executives have recently been talking about more ways to build revenue, including offering ad services specialized by industry. The Journal points out that these are tactics already utilized by Web giants Google and Yahoo, but Facebook has something they don’t: mounds upon mounds of users’ personal data. Facebook has also partnered with controversial firm Datalogix, and the two companies are working together to track how often a user makes a purchase after seeing or clicking on an ad on the site.

Erin Egan, chief privacy officer at Facebook, said that these recent changes are being done in a way that still respects users:

We believe our business model is fully compatible with honoring privacy.

The story notes that Facebook is also trying to advertise more on sites such as The company will soon start placing ads on third-party smartphone applications. Facebook is still testing to see how effective these ads are. Zynga declined to comment to the Journal. Many analysts believe that Facebook could be preparing to launch its own advertising network if these ads perform well.

Readers: Do you feel that Facebook is overstepping its boundaries with regard to respecting users’ privacy?

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