Free services are a kind of honey pot for online services. They attract users and, more importantly, their personal data, which in turn allows companies like Google and Facebook to sell advertising.
A lot of users, when they even think about the exchange, treat the advertising as a minor inconvenience. They may point to television and note that our television broadcasting system was built on advertising, so why not use advertising to fund cloud-based data services?
The problem is that data is not television. Television was important but advertisers had little effect on anything other than probably dumbing down the content of the shows themselves. However, the integrity of personal and commercial data is critical to the functioning of the modern economy and the need for advertising is having a range of toxic effects on the data services provided to consumers.
In my Cost of Lost Privacy series, I highlighted the indirect effect of companies like Google using that personal data and behavioral marketing to allow advertisers like subprime lenders to prey on vulnerable populations and increase economic inequality. But advertising has a more direct effect that makes most online data services less functional for all users and potentially toxic in their broader effects on data security and the infrastructure of the web itself.
>> Deliberate Lack of Security in Data Services: The need to collect user information in order to share it with advertisers means that online companies deliberately avoid encryption and other measures that would better protect user data. After technology analyst Chris Soghoian published a New York Times op-ed noting that most journalists did not recognize the lack of security in online services, Google's top D.C. privacy lobbyist, William DeVries, wrote on his own Google+ page that Chris was "dead right. Journalists (and bloggers, and small businesses) need to take a couple hours and learn to use free, widely available security measures to store data and communicate."
The question, as Soghoian pointed out on his own site in a follow-up post, is that Google products are not secure out of the box on purpose "because the company's business model depends upon the monetization of user data, the company keeps as much data as possible about the activities of its users. These detailed records are not just useful to Google's engineers and advertising teams, but are also a juicy target for law enforcement agencies." Vint Cerf, Google's "Chief Internet Evangelist" admitted recently on a panel that "we couldn't run our system if everything in it were encrypted because then we wouldn't know which ads to show you. So this is a system that was designed around a particular business model."
This means not only repressive governments can more easily get access to your data but identity thieves and other black hat hackers can as well. Site after site asks for user names and passwords, many users repeating the same password, so that hacking one unsecure site suddenly opens every online account to theft and vandalism.
>> Lack of Online Anonymity: Tied into the demand to sell to advertisers is the increasing refusal of online services to allow anonymous users. "On the Internet, No One Knows You're a Dog" -- once a standard joke about anonymity online -- has give way to a Big Brother-ish demand for continual identity checks by online sites.
Google's requirement that only "real names" be used in online Google+ accounts is the most recent example of this, with CEO Eric Schmidt admitting recently in an interview that the reason is to make it an "identity service" to sell people things:. As Schmidt explained:
"if we knew that it was a real person, then we could sort of hold them accountable, we could check them, we could give them things, we could you know bill them, you know we could have credit cards and so forth."
"Apple and Google both seem interested in NFC technology (near-field communication)," writes, Mathew Ingram at the site Gigomon, "which turns mobile devices into electronic wallets, and having a social network tied to an individual user's identity would come in handy."
This hard-line against anonymity means that the viewpoints of political dissidents or employee whistleblowers who don't want their names revealed are effectively silenced in such environments, all for the sake of making advertisers happy and facilitating e-commerce by online companies.
>> Bad Web Design: It's not as life-threatening a problem, but advertising drives web design that is ugly, confusing and time-consuming for users. In order to maximize "page views" that can each hold advertising and generate advertising revenue, articles are parsed into multiple pages. The Columbia Journalism Review describes a similar "Faustian bargain" of the proliferation of multiple-page "slide shows" to similarly generate multiple page views to generate ad dollars.
This is combined with pages where ads dominate more and more display space, where as the Knight Digital Media Center explains, ""As news organizations scramble for revenue, advertisers have gained leverage to demand more--and more prominent--digital space. The resulting ad-heavy homepages make business sense--but the result is visually 'appalling.'"
>> Strengthening the "Tawdry" Side of Capitalism: Internet visionary Jaron Lanier, who has been writing about the Internet since before most people ever heard of its existence, argues that such identity-based appeals by companies gives advertising a bad name. He argued in an interview a few months ago:
Google's thing is not advertising because it's not a romanticizing operation. It doesn't involve expression... It's just a little tiny minimalist link, and basically what they're selling is not advertising, they're not selling romance, they're not selling communication, what they're doing is selling access..."You give us money, we give you access to these people, and then what you do with them is up to you."
Lanier observes that companies taking advantage of such identity-based access are not usually from the "dignified side of capitalism" but rather "tend to be a lot of ambulance chasers and snake oil salesmen."
So in pursuit of those low-road advertisers, we see many online data services building web sites that are less secure, less functional, uglier and undermine political freedom in the service of the needs of those advertisers.
An Alternative to Advertising: The rise of paid apps has shown one alternative road where small payments by users encourage companies to design services solely in the interests of users rather than third party advertisers. Even services directly on the web often use a "freemium" model that eschews advertising in favor of providing basic free services to any user, while gaining revenue from a smaller subset of users who like the service enough to pay a subscription to unlock more advanced features.
To encourage that alternative of Internet design solely In the interests of users, we need policy to better preserve user privacy so that no company can track or share user data without that user's direct opt-in to each and every use of their data. More transparent transactions around loss of user data to advertisers (and potentially to hackers and identity thieves because of lack of security) will encourage more of those users to choose better-designed and more secure paid alternatives.