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Comment by martinshen | Hacker News Reader

Why would they pay you for your data? How much is it worth?

If you click on 0 ads per year, you generate $0 for Facebook and therefore your data is worth $0.

For a personally targeted (using your data) ad click on FB, you're looking at ~$3.25. For a web targeted ad click on a niche website, you're probably looking $0.50-$2.50.

In other words, your "data" is worth $0.75-$2.75 per click of revenue

FB spends 17% of revenue on direct costs and another 18% on marketing. Let's ignore R&D improvements and assume 35% of costs to serve that revenue.

Profit per click for FB = $0.49-$1.79 per click.

Please consider that these clicks must have real intent behind them. In other words, there should be at least 10% chance you'd actually buy that product.

In other words, your data is not worth that much money.

...

On the flip side, FB should offer a paid ad-free version of their services but who honestly would pay $10/mo for FB + Instagram etc.?

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> On the flip side, FB should offer a paid ad-free version of their services but who honestly would pay $10/mo for FB + Instagram etc.?

IIRC they don't make anywhere near $10/user/month. If you gave me the option to pay, say, $25/year for ad-free, tracking-free, and it was implemented in some way that I could trust, then I might be willing to participate with FB again. I'm hoping, actually, that someone will come along with exactly this business model so that we can have social networking for friends and family without the dark patterns. Needs to get everyone on board, of course, which is the hard part.

They generate ~$100 ARPU on US users.

https://digiday.com/marketing/facebooks-making-money-per-use...

Well, that's better than I remember :-). Or I'm thinking worldwide average. I'd probably still do it if the software was good enough and the network complete enough.

Some ex FB employees did make this. It was on techcrunch in the past 1 year, I think. Just found it, it shut down.

https://techcrunch.com/2018/07/30/fabric-offers-an-alternati...

https://medium.com/@fabric.me/sunsetting-the-fabric-app-deb2...

There's an adverse selection issue. Let's say you make $10/month/user from ads, and offer the option to pay $10/month to not have ads. Users with less money are less likely to take you up on that, and are also less valuable as an advertising audience, so you start bringing in much less per month per ads-only user.

Advertising effectively allows a company to charge richer users more, which you lose when you switch to a flat fee.

That is an angle I had not considered, thanks!

It seems like a chicken & egg problem, in some ways. A business that was built more traditionally than a unicorn could still make good money at $10/user/month, certainly it's possible to build Facebook-level social networking without employing nearly as many developers as they do. But without the network effect, the value is not there. I don't want to pay to be by myself.

Maybe it could work as a SaaS, selling distinct social FB-style closed social networks to families, with a future option to interconnect those.

Probably someone has already tried this and failed. I'm not an idea guy, just a coder ;-)

I think app.net (https://en.wikipedia.org/wiki/App.net) tried that approach and failed to get traction.

I view it kind of like Craigslist. If I put something there for free tons of people are interested. If I charge even a dollar the interest drops by a magnitude.

I agree. The whole point is that they are already providing a service to you in exchange for your data—a service that is quite expensive to run. If you want to sell somebody your data, that's fine. Pick how you want to be paid. Services or cash.

This sort of hits a key issue for me - my data is pretty worthless to them, but it's quite valuable to me.

Why don't we realize that privacy is a resource and the current consumption of that resource to drive advertising is incredibly inefficient.

Your data is worth whatever someone will pay. It isn't just about ad revenue, it's about the market research that becomes a behavioral futures market. This app gives you a personal data value estimate (average it's a couple hundred dollars/year): https://app.fastgarden.io/assessment

That is how much the market values data, but markets are not the ultimate decider of worth. Additionally, different participants in markets place different values on the goods being traded, otherwise trade would be useless - the participants consuming our privacy right now value that privacy incredibly cheaply.

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