So cruelly misunderstood

We’ve all seen the fools shouting that data is the new oil. That Facebook makes a mint out of the data we give it for free and therefore they should be paying us for it. Said fools missing two really very important points. The first being that the data, as data, has no value at all. The second that even once it is processed into information which is useful it’s still worth a pittance. At which point the collapse of the entire complaint of course.

Which brings us to Mark Wadworth’s little calculation:

Facebook profits – $2.27 per active user

$5 billion in profits in the quarter spread over 2.2 billion global users. Not quite sure of Mark’s maths there but still.

Now bring that down to a daily amount. That’s 2.52 cents per user per day.

Well, yes, we’re all going to get a long way to a useful basic income if we’re being paid the true value of our data then, aren’t we? No, really, I’ve seen at least one entirely serious suggestion that the value of data will pay for a universal basic income. Clearly, these ideas are coming from people who just don’t know how to add.

To explain the first of the errors though, that it is the data itself which has value. No, this is not so. It is the information extracted from the data which has the value. And in order to do the extraction we have to run an organisation the size and shape of Facebook. Running Facebook has costs of course. The net value of the information is the revenue from it minus the costs of Facebook – that also being known as the profit.

Even if you still want to insist that we should have the value of our data that value is the profit made from it, not the gross revenue. Thus that 2.52 cents a day.

Or, more accurately, a pittance which is of no relevance to anything which concerns us.

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4 COMMENTS

  1. Well, no, because “2.52 Cents A Day” is how Farcebook values the total of the data it collects divided by the number of Farcebook users. But if you’re asking what the user should be charging Farcebook for their data, depends on the user doesn’t it? Not all data has the same value.
    You see, you have to figure in the tosser factor & social media does in fact define tossers. The more time you spend wanking around on social media, the less you must value your time. And people who value their time less are poorer sources of data. Of less value to Farcebook. Because the advertisers Farcebook markets it data at want data from people who buy product. And tossers don’t have the money to buy much product. Being tossers who spend their time on Farcebook rather than making money.

  2. Dittoes. The number of Facebook users, given that the value of data is set wrong, does not indicate the number of Facebook users there would be if the value were set accurately. And many of its users might not be present if there were a market for those data that required “clearing”; this leads to Bloke’s query, above, about whether the data Facebook collects is the best data you’d want to read.

    • Given the information on the accountholder Farcebook requests on signup & that I’ve little doubt they analyse use patterns of Farcebookers, Farcebook will be doing it’s best to separate the data from potential Mercedes buyers from that from tossers sitting in their parents’s basement in their underpants wanking furiously over photos of the latest AMG. So we can be certain that Farcebook values some of its collected data higher than it does other. As will the end users it sells it to.
      If one wanted to price the value of data harvested by social media companies it might be interesting to value the cost to users of avoiding providing their data to the social media companies. Including the negative value of not using social media for that reason.

    • And I just realised I can price that very thing. The phone I use when I’m interacting with the social media companies & with people who use social media (Whatsap, freemail, Google etc etc) is not the same phone I use for serious aspects of my life. So cost of phone – 150€ – plus cost of separate call & data connection. 20€/m. Say 300€/year taken over a 2 year cycle. And you’d get zilch useful out of those accounts. Pretty well anti-data with negative value.