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190 Part One Organizations, Management, and the Networked Enterprise

users were giving “implied consent” every time of an online marketplace, facilitating the sell-
they clicked a Like button on a page. Users are ing of goods and services, potentially challenging
now confronted with an opt-in notice that analysts Amazon and eBay. Still, it’s likely that the personal
speculate may cost Facebook up to $103 million in data of hundreds of millions of users will always be
advertising revenue. Facebook’s most valuable asset. How responsibly it
Additionally, in response to the increased scrutiny manages that asset will guide its path into the future.
brought about by its IPO, Facebook has improved its
Sources: “Selling You on Facebook,” Julia Angwin and Jeremy
archive feature to include more categories of infor- Singer-Vine, The Wall Street Journal, April 7, 2012; Consumer
mation that the company makes available to users Reports, “Facebook and Your Privacy,” May 3, 2012; “Facebook
that request copies of their personal data. In Europe, Is Using You,” Lori Andrews, The New York Times, Feb. 4, 2012;
“Personal Data’s Value? Facebook Set to Find Out,” Somini
40,000 Facebook users have already requested their
Sengupta and Evelyn M. Rusli, The New York Times, Jan. 31, 2012;
data, and European law requires that Facebook “Facebook, Eye on Privacy Laws, Offers More Disclosure to Users,”
respond to these requests within 40 days. Still, even Kevin J O’Brien, The New York Times, April 13, 2012; “To Settle
after Facebook’s improvements, they will offer users Lawsuit, Facebook Alters Policy for Its ‘Like’ Button,” Somini
Sengupta, The New York Times, June 21, 2012.
access to 39 data categories, while the company sup-
posedly maintains at least 84 categories about each
user. And, despite the increased emphasis on pri- CASE STUDY QUESTIONS
vacy and data disclosure, European lawmakers are 1. Perform an ethical analysis of Facebook. What is
unlikely to hamper Facebook’s ability to offer highly the ethical dilemma presented by this case?
customized advertisements, which is the backbone of 2. What is the relationship of privacy to Facebook’s
Facebook’s business model. business model?
Perhaps sensing that privacy concerns represent 3. Describe the weaknesses of Facebook’s privacy
a long-term threat to its profitability, Facebook is policies and features. What management,
working to develop revenue streams beyond dis- organization, and technology factors have
play advertising. Facebook is now a strong second contributed to those weaknesss?
to Google in the United States in display advertis- 4. Will Facebook be able to have a successful
ing, with 28 percent of all display ads served on business model without invading privacy? Explain
Facebook, but the company hopes to become more your answer. Are there any measures Facebook
could take to make this possible?

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