People often wonder how Internet based companies generate revenue to support their activities and provide you with the services they seemingly make freely available to you. Take Facebook for instance. Facebook allows its users to keep in constant touch with “their friends.” The user immediately shares content with his or her friends, and can even distinguish those friends and create “family” lists for even more selective sharing of content. What the user often doesn’t realize is that all content is shared with Facebook and Facebook uses the content for its own purposes. One such purpose: to generate revenue for itself. Yes nothing is for free and information about your online “social network” is valuable.
Facebook just was awarded a patent that evidences in no uncertain terms what Facebook intends to do with the data it is housing about YOU. The patent issued August 4, 2015 and was accorded Patent No. 9,100,400 In the patent, Facebook explains that it has invented a system by which, among other things, it can take the data, specifically your list of friends or your “social network,” and examine the credit ratings of those in your social network. The data is then used to provide information about YOU to lenders, presumably under the theory that “birds of a feather flock together.” If your friends collectively have a good credit rating, the lender might give you loan. If your friends collectively have a poor rating, the lender can close its file on your application. The point here that that lenders who might see some benefit in having data about your social network to judge the likelihood of your ability to pay the loan, or even your willingness to pay it back, will likely be paying Facebook (or any company that Facebook licenses) for the data. Under the circumstances, what should you do when someone friends you? I suggest you consider somehow checking their credit rating first and only making him or her a “friend” when you have no problem being associated with that friend. And obviously the utility of the data is not limited to lenders. Surely when your coop board application is denied, and your attempt to join a golf club or a country club is rejected, you can guess what was behind that action.
For more information, please contact Maria Savio. Maria represents a vast array of Internet based companies, including companies that develop technologies for digital marketing such as social marketing, search marketing, analytics, consumer insights and mobile marketing, and focuses her practice on the ever-evolving challenges that the Internet presents to companies that value their Intellectual Property.