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Inside Facebook's brilliant plan to hog your data

Mike Elgan | May 5, 2014
Facebook's Anonymous Login is designed to create scarcity in the user data market, which increases the value of that data, and forces more small companies to get that data through Facebook's ad network, rather than from the users directly.

Meanwhile, you can be sure that Facebook's own apps — including the Facebook app, Instagram, WhatsApp, Moves, Messenger, Facebook Camera, Paper and others — will be collecting every scrap of user data possible.

In a world in which many mobile app developers embraced Facebook Anonymous Login, the amount of user data "in the wild" would go way down. And the value of the data in the hands of Facebook would go up.

If mobile app developers want to sell contextual ads, they'll have to come to the companies that have all the data, as well as the ad network to serve up highly personalized ads. And that will be Facebook (and a small number of competitors, especially Google).

Facebook Anonymous Login, in combination with other announced offerings, does provide some benefit to both consumers and app developers. But above all, it's designed to create scarcity in the user data market. And when user data is scarce, two things will happen: The data itself will grow more valuable, and more small companies will be forced to get that data through Facebook's ad network, rather than from the users directly.

It's a truly brilliant move on Facebook's part.

 

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