Hacker's lounge: Making Money Your

Another Facebook change, another privacy uproar. Read the headlines and you might have thought the social network was planning to open the books on private cellphone numbers and home addresses to any advertiser willing to slip them some cash, rather than adding some more sharing options along with the usual granular control over who gets to see what of your digital details. Unsurprisingly Facebook froze its plans pending a reassessment of its privacy controls; unfortunately, nobody is taking Facebook users – and the online community in general – to task over taking some responsibility for what they share.

If you haven’t been following the story, here’s the situation in a nutshell. Facebook announced on Friday that it was planning to add address and mobile number to the personal information that could be shared with applications, websites and advertisers. As with other personal details, the degree to which that data was accessible would be managed under each user’s permissions settings: everything from a come-and-get-me open pipe to a complete block on anything being revealed. Facebook billed it as a way to “easily share your address and mobile phone with a shopping site to streamline the checkout process, or sign up for up-to-the-minute alerts on special deals directly to your mobile phone.”

Don’t get me wrong; I’m under no illusion that Facebook is doing this for altruistic reasons. Making online purchases quicker is undoubtedly handy to those who actually click through Facebook adverts, but for the social network itself it’s all about making money from its most valuable asset: its millions of registered users. Just like with a free newspaper, Facebook makes its money by showing you adverts, and it can use your personal information to tailor those ads more appropriately. Access to personal contact details, meanwhile, is even more valuable.

However, just because there’s profit to be made for Facebook, it doesn’t mean this is either bad for the user or a sign of Evil Big Business taking advantage of the general public. We manage the degrees to which we disclose personal information all the time, long before Facebook arrived and gave us a simple privacy settings page to work with. Every time you avoid giving your phone number to a door-to-door charity worker, tick the no-junk-mail box on a bank form or refuse to give your address to someone you just met at a bar, you’re exercising your own, personal privacy filter.

Perhaps I’m being unfair. After all, it only takes a quick glance at sites like Lamebook (often NSFW) to see that many Facebook users have problems with over-sharing, accidentally making public posts out of what were meant to be private messages, and generally forgetting who out of their friends and family can read what they’re saying. Maybe Facebook does have some intrinsic responsibility to shepherd its members through the difficult journey that is online life; perhaps the privacy pages really won’t be complete until there’s color coding, pop-up warnings and a virtual cash register showing just how much you’ve lined Mark Zuckerberg’s pocket.

This constant push-me-pull-me with Facebook does users no favours. Every time the privacy patrol scream, and Facebook backtracks, it reinforces the idea that the site itself is solely responsible – should be responsible – for making safe use of the information we share online. Don’t get me wrong, if Facebook was looking to sneak in a “we can sell your identify” clause into the T&Cs, that’s something worth shouting about. When, though, we muster the same amount of vitriol for sharing options that already have safeguards – safeguards that satisfactorily protect our email address and other details – it looks more like abdication of responsibility. We want to trust Facebook do “do the right thing” – based on our own interpretation of what “the right thing” is, exactly – so that we won’t have to. We can spend our time looking up old crushes, posting photos of ourselves looking fierce in clubs, and commenting on videos of cats.

Privacy is important, but the responsibility begins at the individual level. Just as you don’t hand out your address to strangers in the street, maybe giving it to every website that asks isn’t all that sensible either. Relying on other people, or companies, to protect us universally is a naivety we abandon before adulthood in the real world, yet something many seem determined to cling to online. That’s before you get to the thorny issue of lost or stolen data. In the end, it’s your life, your number, your face: it’s up to you whether it’s an open book.

We’ve been promised for a while now that our phones will become our personal assistants. Executives from Cambridge, Mass.-based Vlingo sat down with me this week to talk about how they’ve delivered on that promise — and started turning it into real revenue.

It seems like all the big guys are trying to get into this business. The incentive, as a Googler put it when the company launched a similar service last year, is that voice is much more natural than typing as a way to interact with your phone. Apple, meanwhile, showed its interest by acquiring a startup called Siri. And Microsoft included voice commands on Windows Phone 7.

The difference, according to Vlingo’s vice president of business Hadley Harris, is that the startup has built all its basic technology, including speech recognition (something that Siri outsourced) and the “intent engine” that allows the app to translate your words into actions that it understands. Vlingo is working with other companies to integrate a wide range of apps into the system, so that you can use your voice to buy a plane ticket off travel site Kayak or check your updates on Facebook.

Vlingo has been downloaded 7 million times, Harris said. BlackBerry users represent most of those downloads, since that’s the phone that Vlingo focused on first, but iPhone and especially Android are catching up. The company’s strategy is to release new features on Android first, then port them to other phones as resources and technology allow.

The app is free, so Vlingo makes money through advertising and revenue sharing with its partners. Specifically, Harris told me it currently earns $7.74 for every 1,000 Web searches, $49 for every 1,000 local searches, and $24 for every 1,000 “other” monetizable actions, such as a ticket purchase on Kayak. With users performing an average of 30 actions every month, Harris said Vlingo is making about 14 cents per user per month.

That might seem a little low, Harris acknowledged, but the plan is to dramatically increase both the number of users and the number of actions over the next year. Most promisingly, he said Vlingo has made deals with a number of Android handset manufacturers who don’t want to direct all of their usage to Google services. (He said it’s too early to reveal who the manufacturers are.) Not only will that put Vlingo on more phones, it will also make the application more prominent on those phones by turning it into the default app whenever you want to use voice commands.

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Monday, January 24, 2011

Making Money Your

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