Home Towards a Value-Added User Data Economy

Towards a Value-Added User Data Economy

Every week it seems like the debate over access to, portability of and privacy over user data on the social web has reached new heights. It’s only going to get louder though, just as discussions about other forms of economics will never be resolved.

That’s a part of what’s going on, economics. This is an information economy, after all, and user data is clearly one of the most important currencies in circulation.

User data has been sold by ISPs, leveraged by ad networks and horded by social networks for years. Now, users are storming the castle to recapture their own booty. We argue that it’s in everyone’s best interest that the data be freed. Vendors have far more to gain by working to add value to freely flowing data than they do from trying to horde as much data as they can.

The Importance of Privacy

Facebook holds a growing amount of user data and tries to hold on to it tightly in the name of user privacy. Founding CEO Mark Zuckerberg told us in an interview at SXSW that he agrees with the principals of data portability but believes that Facebook has to solve a number of problems about privacy as its contribution to the data portability discussion. At the time many people were skeptical of Zuckerberg’s claim (some still are) – but nothing illustrated the validity of his argument better than Scoblegate.

High profile blogger Robert Scoble teamed up with spamtastic startup Plaxo to scrape the emails from his contacts’ profiles in Facebook, turn them from protected images into machine readable text with OCR technology and then export them outside of Facebook. Facebook shut Scoble’s account down for a couple of days and a huge brouhaha erupted. Some said that Scoble had every right to the email of his contacts and others said they only gave him a right to see their contact info in Facebook and not to export it elsewhere.

Can users have access to data about their past activities and their social connections without violating the privacy of the people they are connected to? That is the question and no solution has been found yet. There needs to be though and it ought to be a solution that’s standards-based and thus reproducible everywhere.

Protection of user privacy is a precondition to meaningful data portability, but vendor control over data is a stopgap measure at most – no more than a short term solution. In the long run, there needs to be a way for users to designate some of their data as being not for export or use outside of its original context. The data that is made available for public sharing should be accessible through a standards-based system of authentication, so any new vendor can show up and make use of it.

Long Term Interests

In the long term, it’s in everyone’s best interests for data to be as portable as possible. For users, data portability means that we can invest time and resources into new platforms on the web without the fear that the work we create will be locked in to that network or otherwise lost to us. It also offers the possibility that we can take our compiled work in one place and let another service process that data to create new kinds of value for our benefit. For example, being able to export our reading history from one service would enable other services to immediately recommend new experiences they can offer based on our tastes elsewhere. The music website Idiomag, for example, can look at our public history on Last.fm and build from that history a customized music “magazine” about artists we would likely enjoy. That’s just one kind of service that could be enabled for users by data portability.

Most importantly for the purposes of this post, vendors too have an interest in data portability. Allowing your users to port their data elsewhere means that you’ll be able to import their data from other platforms enabling export as well. When your users take their history with you to another site, they will be able to make faster, better friends and content connections in that new place, which should lead to their having a better developed social network to bring back to your site.

If you can add value to user data, and thus help grow the aggregate information economy, then there should be far more information for you to monetize (advertise against) than you could keep within your grasp alone. Add value, let it go and focus on offering a compelling enough user experience that users will bring their data back to you, freshly grown from their experiences in other environments. Everybody wins.

Google search has huge value not because it owns anything but because it touches everything. The value it ads by enabling discoverability lets the web at large grow, meaning that there’s more web for Google to advertise on. Google Friend Connect, on the other hand, keeps users’ social and activity data on Google servers – barring the participating websites from gaining read/write access to that data. What a huge loss for everyone!

Recall the economic theory of comparative advantage. International development thinker and all around Renaissance man Jed Sundwall says the old “I’m better at making wine, you’re better at making cheese, let’s trade” logic could well apply to social web data portability as well. Facebook, for example, has a great video mail system. It doesn’t do microblogging well at all. Allowing a user to bring their video mail from Facebook with them to Twitter and their Twitter history with them to Facebook would only make both services stronger. Blogger and economist in a previous life Bob Uva says it’s a matter of enabling “greater efficiency by all points of production.” There’s no need for one service to reinvent the wheel or spend resources building data extraction technology if there is standards based data portability. Likewise, users wouldn’t have to start anew building their social networks and personal profile/history in every new service they join. What that increased efficiency means is more innovation, both in terms of service features and personal creativity.

Data Neutrality

Perhaps what we need is not just data portability but data neutrality, a paradigm emphasizing that only users can control where their data passes from one location to another. Just like supporters of net neutrality argue, allowing vendors to limit passage of data allows them to stifle upstart competitors and hurts the whole web’s need for continuous innovation.

Good Faith

Privacy is really important in order for data portability to be real. Working to assure that privacy is important, but we also need to see vendors making consistent progress towards a user-centric economy of open data. That means that building iframes and widgets to send the social around the web is just a short term solution. More important news for long term progress would be vendors accepting inbound OpenID, offering oAuth APIs for passing user data along from site to site, marking up user data with semantic and microformat code to make that data machine readable elsewhere, enabling easy behavioral data export and perhaps most importantly building the machinery that will process portable data as the world moves in that direction.

Everyone says they support data portability but it’s most exciting to see vendors who are developing methods of deriving value for users and for themselves from the free passage of data that ought to be the defining characteristic of the web, once user control and privacy are workably solved. We want it, you want it, we’re all going to get more value out of it if service providers offer a place to put our data and make some magic with it.

As Chris Saad, founder of the Data Portability Working Group said today, data portability is the new web and vendor apps are like the browsers that allow you to view and remix that data. That’s where the innovation that will fuel the future growth of the information economy will come from. Users have to have a reasonable expectation that they will be safe, secure and in control of their own data assets – and then it’s a competition to see which vendors can add the most value to the free flow of data. In just a few short years, vendors should win the hearts of users by providing superior service – not in any part by locking in data. Let’s have heated debates about who’s innovating the fastest using the secure, free flow of user data – not about whether that needs to happen at all.

Horse race photo by Ian Ransley. Special thanks to the friends who helped me with this post on Twitter, UStream, the telephone and a wiki – we used each of those media to put this together and it was a lot of fun.

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