FB: Your profile is the product

When Facebook's (FB) stock was publicly offered, I thought that the $104B valuation was insane. The profiles were free, so the the people who made the profiles did not pay. Where could the revenue possibly come from? If FB charged, then the number of active profiles would drop. FB advertised, but there was only so much advertising revenue that it could suck out of newspapers, radio, and TV. There were other advertising platforms, such as the behemoth Google that was competition. Only so much money could be made off of Zynga, since portable apps were exploding with their own micro-transaction models.

So, I thought that FB investors were delusional, until I read an article about bankruptcy trustees using trawling through FB for bankruptcy cheats. The trustees used FB to find out about assets that bankruptees hid from courts that could be repossessed. That was when the light came on. According to the revenue line, the trustee & anyone else looking, sifting, and analyzing the profile data is the user. More importantly to FB, Inc., they are the PAYING users.

The person who makes the profiles is providing free raw data for research. This is the data that companies pay pollsters and researchers to gather. While the data is disorganized, there is a lot of it & a significant portion of the available data is the sort that market, behavioral, and other researchers would never think to ask for, much less get. Right now, they are not exactly sure what to make of it. However, with powerful AIs like Watson, FB was not seen as a gold mine, but a virtual undiscovered country to be explored, cataloged, and developed like the Americas to the Europeans. Better than a terrestrial country, the virtual borders of FB's keep on expanding as social media-makers worked like busy little bees to share details of their lives in exchange for server space and connectivity.

You, the average Joe and Jane, create content for FB, Inc. The data miners and research marketers are the true users of FB, Inc.