4-14 What is the relationship of privacy to Facebook’s business model? Over the course of less than a decade, Facebook has morphed from a small, niche networking site for mostly Ivy League college students into a publicly traded company with a market worth of $148 billion in 2014 (up from $59 billion in 2013). Facebook boasts that it is free to join and always will be, so where’s the money coming from to service 1 billion worldwide subscribers? Just like its fellow tech titan and rival Google, Facebook’s revenue comes almost entirely from advertising. Facebook does not have a diverse array of hot new gadgets, a countrywide network of brick-and-mortar retail outlets, or a full inventory of software for sale; instead, it has your personal information, and the information of hundreds of millions of others with Facebook accounts.

Advertisers have long understood the value of Facebook’s unprecedented trove of personal information.

They can serve ads using highly specific details, like relationship status, location, employment status, favorite books, movies, or TV shows, and a host of other categories. For example, an Atlanta woman who posts that she has become engaged might be offered an ad for a wedding photographer on her Facebook page. When advertisements are served to finely targeted subsets of users, the response is much more successful than traditional types of advertising.