User Data Can Provide A Competitive Advantage

Friday I posted that it is time to start asking questions about Facebook Beacon. I wrote that “while I don’t necessarily think that Facebook’s Beacon program is the ultimate test of individual privacy, I do believe that we are rapidly moving in a direction where some of us need to stand up and ask where the line will be drawn. While I will not suggest where that line falls in this post, we do need to figure it out.”

It looks like a few people are also feeling the same way. The line that I spoke of appears to be allowing users to have ownership of their own data. Honestly, I don’t see this happening though. Do you think Facebook is going to let you create a profile add a bunch of information, pictures, wall posts and more and then flip a switch and leave and take all of your data with you?

No way! Howard Lindzon does have a point though, something has got to give. At a minimum, I think Facebook should make Facebook Beacon an opt-in service. This concept of owning all the data that I enter is a significant one but I don’t see it happening. If I choose to use someone else’s service and enter data into it, they own it. That’s why I call it “someone else’s service.” If you want to own a bunch of data, go create your own service and get people to use it.

Suggesting that Facebook let a user export all of their data in XML or CSV format as Jason Calacanis suggests, is slightly ridiculous. I can understand having ownership of my own social graph but that’s where it ends. Even that would be a huge step for Facebook. Dave Winer suggests that other sites enable users to own their data as well. He wants Netflix to know what I rated various movies.

In theory this makes a lot of sense but personal user data is a competitive advantage for many services. If a user invests hundreds of hours rating movies, books or anything else, they aren’t going to want to go somewhere else. Letting users own their data will force competing sites to compete on services alone. This could be a good thing but it also could be a bad thing when the technologies developed by many of these sites are ultimately commodities. Letting users own their data could be the downfall of many web 2.0 sites. Do you think Facebook should give users ownership of their data?