Facebook has gone to great lengths over the past year attempting to convince a skeptical public and increasingly antagonistic policymakers that it does not sell its users’ data. Instead, the company notes that it merely sells access to its users through ads and acts as a conduit through which others harvest data, but that it itself does not receive a check in return for handing over ZIP files of data. In contrast, Twitter quite literally does sell its users’ data in the form of a series of commercial data feeds that have become the basis of modern social media data mining. The differences in these approaches remind us why Facebook’s model of selling access is far more lucrative than Twitter’s model of selling data.
Facebook and Twitter represent the opposite extremes of the social media revolution.
Facebook focused on connecting friends, neighbors and family together through privacy-controlled communications and sharing. Its platform was designed to connect individuals and small groups. Revenue was generated through advertising. Data could be mass harvested in ways that reinforced Facebook’s centrality to the global communications network.
In contrast, Twitter focused on being a broadcast platform akin to a realtime news outlet, with posts being world-readable by default. Its platform was designed to connect individuals to the planet itself. Revenue was generated through both advertising and selling packaged streams of the totality of all public posts in realtime to companies all across the world. Data could be purchased en masse or downloaded for free via a 1% sample stream.
Facebook’s decision to hoard its data rather than box it up and sell live access like Twitter has meant that it alone holds the keys to its vast data treasury. In fact, most of its privacy woes like Cambridge Analytica revolve around its decision to look the other way as third parties harvested data from its servers for their own use.
Twitter’s decision to sell its data means that companies all across the globe have mirrors of Twitter’s archives and researchers and companies all across the world buy, barter and share a large fraction of its trillion tweets every day.
Facebook saw itself early on as a service provider, building up a vast archive of intimate user data that it could charge for access to through advertisements. Twitter saw itself in the role of China’s early manufacturing persona: the low-cost plumbing of the internet for others to build products around and sell high-margin services on top of. While China eventually began a transition towards the services industry, Twitter seems stuck, mired in its utilities legacy.
By restricting access to its data, Facebook was able to enforce a monopoly on access to its user data, ensuring it alone could offer lucrative services on top of those riches.
In contrast, by selling its data directly, Twitter relegated itself to the low-profit business of data vendor, allowing other companies to reap the vast service industry profits.
Imagine if instead of selling its data, Twitter had built its own social media analytics platform from the very beginning. Instead of customers purchasing services from the tens of thousands of companies that offer various forms of social analytics today, Twitter would be the one with millions of customers all purchasing access to its global social analytics service at whatever cost it wished to charge.
Facebook’s refusal to sell its data also means we have precious few insights into just how big or small its platform really is. Only through its recent academic research collaboration are we gaining our first insights into the size of its data archives and Facebook is turning out to be vastly smaller than we’ve been led to believe.
In contrast, Twitter’s downloadable firehose means we can actually analyze its entire platform at scale to precisely chart its entire evolution over its existence.
Putting this all together, Facebook’s decision to sell access rather than data means it not only has a monopoly over offering high-value services around its user data, but it can prevent outsiders from actually verifying its claims about the size of its data archives or their limitations. Twitter, on the other hand, has been relegated to simple utilities provider, leaving the high-margin services business to others, while its open book archives mean its collapsing user numbers, aging user base, skyrocketing retweet rate, cessation of large-scale precision geotagging and other ailments are all on display.
In the end, the Facebook versus Twitter battle reminds us that it is far better financially to sell access through ads than to sell data.
