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net.wars: Social advertising

It only takes two words to sum up Facebook's sponsored stories, the program under which you click the "Like" button on a brand's page and the system picks up your name and photograph and includes it in ads seen by your friends. The two words: social engineering.

The cooption of that phrase into the common language and the workings of time mean that the origins of that phrase are beginning to be lost. In fact, it came from 1980s computer hacking, and was, to the best of my knowledge, created by Kevin Mitnick in the days when he was the New York Times's most dangerous hacker. (Compared to today's genuinely criminal hacking enterprises, Mitnick was almost absurdly harmless; but he scared the wrong people at the wrong time.) The thing itself, of course, is basically the confidence game that is probably as old as consciousness: you, the con man, get the mark to trust you so you can then manipulate that trust to your benefit. By the time the mark figures out the game, you yourself expect to be long gone and out of reach. Trust can be abruptly severed, but the results of having granted it in the first place can't be so easily undone.

Where Facebook messed up was in that last bit: it's hard for a company to leave town, opening the way for the inevitable litigation. Naturally, there was litigation, and now there's a settlement under consideration that would require the company to pay millions to privacy advocacy organisations.

This hasn't, of course, been a good week for Facebook for other reasons: it released its first post-IPO financial statements last week. And, for the same reasons we gave when the IPO failed to impress us, as predicted, those earnings were disappointing, At the same time, the company admitted that 83 million of its user accounts are fakes or duplicates (so the service's user base is maybe 912 million instead of 995 million). And, a music company complains that it was paying for ads clicked on by bots, a claim Facebook says it can't substantiate. Small wonder the shares have halved in price since the IPO – and I'd say they're still too expensive.

The comment that individuals whose faces and names were used were being used as spokespeople without being paid, however, sparks some interesting thoughts about the democratization of celebrity endorsements and product placement. Ever since I first encountered MIT's work on wearable computing in the mid 1990s, I've wondered when we would start seeing people wearing clothing that's not just branded but displaying video ads. In the early 2000s, I recall attending an Internet Advertising Bureau event, where one of the speakers talked baldly about the desirability of getting messages into the workplace, which until then had been a no-go area. Well, I say no-go; to them I think it seemed more like a green field or an unbroken pasture of fresh snow.

Spammers were way ahead on this one, invading people's email inboxes and instant messaging and then, when filtering got good, spoofing the return addresses of people you know and trust in order to get you to click on the bad stuff. It's hard not to see Facebook's sponsored stories as the corporate version of this.

But what if they did pay, as that blog posting suggested? What if instead of casually telling your friends how great Lethal Police Hogwarts XXII is, you could get paid to do so? You wouldn't get much, true, but if sports stars can be paid millions of dollars to endorse tennis racquets (which are then customized to the point where they bear little resemblance to the mass market product sold to the rest of us) why shouldn't we be paid a few cents? Of course, after a while you wouldn't be able to trust your friends' opinions any more, but is that too high a price?

Recently, I've spent some time corresponding with a couple of people from Premiumlinkadvertising.com, who contacted me with the offer to pay me to insert a link to Musician's Friend into one of the music pages on my Web site. Once I realized that the deal was that the link could not be identified in any way as a paid link – it couldn't be put in a box, or a different font, or include the text, paid for, or anything like that – I bailed. They then offered more money. Last offer was $250 for a year, I think. I do allow ads on my site – a few pages have AdSense, and in the past a couple had paid-for text ads clearly labeled as such – but not masquerading as personal recommendations. I imagine there's some price at which I could be bought, but $250 is several orders of magnitude too low. Week links:

- Excellent debunking of the "cybercrime costs $1 trillion" urban legend (is that including Facebook's vanishing market cap?)

- The Federated Artists Coalition has an interesting proposal to give artists and creators some rights in the proposed Universal/EMI merger.

- Wouldn't you think people would test their software before unleashing it on an unsuspecting stock market