It's called shadow profiling[0].

Even if you haven't signed up for a facebook account but someone you know has an account, they by proxy, you have an account. Merely existing as a contact in their address book is enough to create a shadow profile with facebook. Their deep-learning algos can collate such data from all your friends and serve you correspondingly appropriate ads.

In fact, I just thought of an experiment that you could try sometime.

1. Buy a new cellphone number and store a small number of contacts (say, about 5) in your phonebook. Make sure all 5 of them have functional & active FB accounts.

2. Install the FB app on the phone and grant it access to your phonebook.

3. Open the app, create a new user and check out the list of suggested friends.

I think you'll be surprised.

[0] http://www.dailydot.com/news/facebook-shadow-profiles-privac...

They definitely use your contact lists. I have done multiple experiments with this. I first noticed about a year ago, people popping on my FB's "People you may know..." list, and sure enough, the _only_ way they could link them to me was through my iPhone contacts. People like a guy who once fixed my roof, whose number I still had from years ago.

As the original commenter said, LinkedIn seems to be even worse with this, creating those spooky empty default accounts for your grandmother or your child's best friend's dad.

I think there will be a backlash against all this - surely it is a case of diminishing returns for the social media corps, combined with an ever-growing sense of _unnecessary_ intrusion by their users?

People with facebook-apps on their phones essentially allows Facebook to get their full contact list. If person A, B and C all have the number of a person D who is not on facebook, it's enough to create a shadow profile. On the basis of A, B and C, their social statuses, their level of education, country, etc., it's possible to make pretty accurate guesses to determine the person D.

If person D some day decides to install, say, WhatsApp (or even if he had it before Facebook acquired it), it also has his text messages, and photos shared through said app. It can all be linked to that shadow profile with that phone number. If D at some point typed his email-address into WhatsApp, or signed up at some site that shares data with Facebook, it's also easily linked to that shadow profile.

They could buy it from credit agencies