Windows Secrets Newsletter: Facebook versus Google+ Privacy

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By Woody Leonhard/Windows Secrets Newsletter

With Google+ rocketing to millions of users in record time, many people wonder whether the claims are true: is Google+ really that much better at defending your privacy than Facebook?

Facebook’s rocky history with fluctuating privacy settings and a memorable, scummy, mud-slinging attempt to smear Google make it easy to jump to conclusions, warranted or not. Here’s what you need to know.

In his July 21 Hot Tips article (paid content), Chris Murray talked about the ascendancy of Google+ and the way it’s come to rival Facebook — even while it’s still in beta testing. But the hottest topic in the Google+ vs. Facebook face-off remains privacy. Some reviewers seem to take Google+ privacy superiority as a given. Although I use (and actually like) Google+, I’m not at all convinced it’s better than Facebook at privacy protection. If privacy concerns you — and it should — the facts may sway you to one or the other … or neither.

Not so coincidentally, this issue of Windows Secrets Newsletter marks the inauguration of a new forum on the WS Lounge. We’re starting an entirely new forum devoted to social networking — Facebook, Google+, LinkedIn, MySpace, for sure — but also Habbo, Qzone, Vkontakte, Bebo, Friendster, hi5, and Orkut. If you have a social-networking question, drop by the site and let’s see whether we can come up with some answers.

No matter what they say, it’s all about money

“Google makes more from advertising than all the nation’s newspapers combined.”

   — James Gleick article, “How Google dominates us,” New York Review of Books.

Everybody loves a get-rich-quick story, with brash young heroes and mountains of cash.

In Google’s case, it’s the story of Stanford grad students Larry Page and Sergey Brin, who started with the clever idea of ranking Web pages (PageRank). They then added an even cleverer idea for matching people with advertisements. Eventually, they iced the multibillion-dollar cake by figuring out how to sell the ads in a semisecret, perpetual auction (AdWords). The result? Thirty-two billion dollars in advertising revenue within the past year. Ads represent 97 percent of Google’s revenue.

Advertisers bid on specific words or phrases. Google tries its best to show ads to people who are likely to click on them. If someone clicks on a link and goes to the advertiser’s page, Google bills the advertiser. You probably knew that. But you might not know how much it costs for one click.

Right now, if an advertiser bids on the AdWord phrase auto insurance price quotes and someone clicks on a Google-generated link to the advertiser’s site, the advertiser pays U.S. $54.91. For one click. No, that isn’t a typo. Bid on the phrase consolidate graduate student loans, get a click, and it’ll cost $44.28. Alcohol rehab center runs $33.59. Cord blood bank goes for $27.80. WordStream has an excellent quick overview of the way Google AdWords works, listing the going rate for top phrases.

Now you understand the motivation. Google scans everything — your Google+ entries, sure, but also the contents of all your inbound and outbound Gmail messages, your Google search history, everything it can put together — in the single-minded pursuit of an ad that will draw your click. (The leaked Microsoft internal video called “Gmail Man,” posted on YouTube, takes Google to task for scanning mail — but fails to mention that Microsoft scans Hotmail as well. But Microsoft is looking for spam and performing spell checks, not scanning to generate ads — yet.)

In some cases, Google can match the information to you, personally. In other cases, it has to make do with your IP address, which can change.

In a Gmail information video (site), Google assures everyone that it doesn’t sell personally identifiable data, but it does sell aggregate data. And, according to a CNET article, it’s working on a data-exchange service to help website owners sell data about their specific users to potential advertisers. Eroding your privacy is worth money to all sorts of people.

The Facebook get-rich-quick story starts at Harvard with Mark Zuckerberg and a cast of characters immortalized (accurately or not) in the recent movie, “The Social Network.” Facebook, being a privately held company, doesn’t divulge much about its financial situation, but a story in The Wall Street Journal quotes a company insider stating that Facebook will hit $2 billion in sales this year. Others estimate Facebook’s 2011 ad revenue at closer to $4 billion.

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This post is excerpted with permission from Windows Secrets.

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