This document discusses Facebook's dilemma in balancing profits from advertising with user privacy. It describes Facebook's growth and business model, including advertising and third-party applications. However, programs like Beacon that shared user data without consent harmed privacy. While users willingly share information, Facebook's policies around data use and retention have faced criticism. Finding the right approach to monetization while respecting privacy will be important for Facebook's future success.

1. Facebook’s Dilemma: Profits(Theirs) versus Privacy(Yours)StephannyAlmanzar 10-0054Juan Gulliani 10-0553Tomas Enrique 10-0135

2. Summary of the case Facebook’s DilemmaOriginally Facebook was open to a small handful of colleagues, but the site has grown explosively since it opened its doors to the general public. Major competitors:

3. For advertisers Facebook represents a gold mine of opportunity because of the information the site has gathered and because of the richness of the social networking environment. It is also an extremely “sticky site”. Despite these advantages, Facebook has high maintenance costs(servers and networking).Attempts to sell online ads on Facebook and other networking sites have not been successful.

4. Privacy Issues:Users contribute most of their information to Facebook willingly, but do they want to share that information?In December 2007, Facebook CEO Mark Zuckerberg announced the Beacon Program. This would track what Facebook members purchased at their corporate sites.But then, why some Facebook users still continue to use the third-party quiz applications?Facebook has also come under fire for its handling situation of removing profiles from the site.

5. Looking forward to profitability:Facebook Platform, launched in May 2007, opened up the site to serve as a “platform” for applications that are independently developed by third parties.On the flip side, others believe Facebook’s own popularity will injure its chances to attract advertisers to the site.Facebook’s purchase of FriendFeed and its rollout of FacebookLite variant suggest its desire to offer an alternative of Twitter.

6. FacebookFriendFeed VS FacebookLiteFacebookFriendFeed: Allows users to aggregate all of the content form the social media sites they belong to(Facebook and Twiter included) in one central location. Users can search for things more easily through Facebook.FacebookLite: Intended for users without widespread access to broadband Internet connections. (Much more like Twitter, don’ you think?)

7. What will happen to privacy from now on in Facebook?“ The benefits of being part of Facebook, thanks to its large audience and wealth of features and content, may still outweigh the reservations its users have regarding their privacy”.

8. Case Study Questions: Facebook’s Dilemma1: What concepts in this chapter are illustrated in this case? Some of the terms it covers are for example ubiquity, that is you can access Facebook from apparently every where, even from a cell phone. The access to this service is limitless. Also, as mentioned in the summary Facebook is full of content and it enables people to send messages with videos, images, audio and text. Likewise, this increases the interaction among its users.

9. It continues..Q#1: We believe Facebook doesn’t have information asymmetry because everything is known over the internet, likewise its users have gained enough power to even cancel contracts and services that affects their privacy. Facebook has also created somewhat a portal, with the FriendFeed application. Regarding the advertising revenue model in Facebook, it hasn’t work that much because social networkers don’t like ads interfering with their banter.

10. 2. What is the role of e-commerce and Web 2.0 technologies in Facebook’s widespread popularity?E-commerce can be more interactive with Facebook users since information can be gathered from a number of different places, and it can be personalized to meet the needs of everyone.Users can interchange ideas, not just receive orders. So in the case of E-commerce people not only can buy products or services on the Internet but they can receive feedback from other people that have bought it before. In Facebook’s case people can comment over each other profiles, leave videos, texts and other things.

11. 3. Describe the weaknesses of Facebook’s privacy policies and features. What people, organization, and technology factors have contributed to those weaknesses? Some of the programs that have affected Facebook’s private policies are: * The Beacon Program, that would track what Facebook members purchased at their corporate sites, send the information to Facebook, who would then share that information with their friends without asking permission. *Change of information retention and collection policy. But, in August 2009, Facebook announced a simplification of its privacy policy. Users could easily be able to choose between account retention and deactivation. *Also, Facebook Platform, launched in 2007, opened up the site to serve as “platform” for applications that are independently created by third parties.

12. Q#3. It continuesAt the end of the day, we, the users, have been responsible for giving our personal information. Facebook’s environment is very engaging, and gives developers unparalleled exposure for their applications.

13. 4. Does Facebook have a viable business model? Explain your answer.This website has grown into the largest global online social network, cutting across geographies, cultures and languages. It is a really innovative business admired by many others around the world.Facebookhas revolutionized the field of online social networking. The integration of Facebook with external web sites has also made it mire versatile and uniqu.Also individuals are able to invest in Facebook, Goldman Sachinvested a lot of money in Facebookfor example.

14. 5. If you were responsible for coordinating Facebook’s advertising, how would you balance the desire to become increasingly profitable with the need to protect the privacy of your users?From the beginning I would set a standard in which users could know if their information is going to be shared with third parties. By this manner in the future I would avoid having to deal with people that may allege not knowing anything about the policy.

15. Facebook’s Dilemma: Profits(Theirs) versus Privacy(Yours)Thanks!