Facebook valued at $270 billion? NewsCorp buying MySpace for $580 million was sooo 10 years ago. #edchat

Illustration by Jordan Awan

There’s a terrific piece in the current @NewYorker, Facebook Should Pay All of Us by Tim Wu. In it, Wu writes:

Facebook is […] widely assumed to have more data than anyone else. That data is useful for advertising, which is Facebook’s main source of revenue. But the data is also an asset. The two-hundred-and-seventy-billion-dollar valuation of Facebook, which made a profit of three billion dollars last year, is based on some faith that piling up all of that data has value in and of itself. It’s like a virtual Fort Knox—with a gold mine attached to it. One reason Mark Zuckerberg is so rich is that the stock market assumes that, at some point, he’ll figure out a new way to extract profit from all the data he’s accumulated about us.

…For the most valuable innovation at the heart of Facebook was probably not the social network (Friendster thought of that) so much as the creation of a tool that convinced hundreds of millions of people to hand over so much personal data for so little in return. As such, Facebook is a company fundamentally driven by an arbitrage opportunity—namely, the difference between how much Facebook gets, and what it costs to simply provide people with a place to socialize. That’s an arbitrage system that might evaporate in a world of rational payments. If we were smart about the accounting, we’d be asking Facebook to pay us.

Since NewsCorp bought MySpace for $580 million dollars in 2005, I have had so many conversations with students, parents, teachers, friends, family, and strangers about what I imagined NewsCorp was buying. Data. An ocean of freely shared data about its users from its users: Who are you? Who do you know? What do you do? Specifically, what are your likes and dislikes for bands, songs, cars, jeans, sodas, shampoos, computers, magazines, pizza toppings, television channels, narcotics, candidates, Friends characters? Where do you shop, hang out, watch movies? People freely and willingly uploaded any and all personal information and preferences to MySpace, and NewsCorps hoped to sift through swells of big data for advertising and internet marketing purposes. Six years later, NewsCorps sold MySpace for $35 million dollars in 2011. Ruh roh.

For almost two decades, I’ve working mainly with middle school students and teachers. During my time at The School at Columbia University, Don Buckley (Director of Innovation from 2006-2013) asked Cristina Martinez (our Systems Administrator) to set up an internal social network using Elgg back in like 2007 or 2008. To demonstrate that a social network is EMPTY until people populate it with information, we start every school year with a blank social network after archiving the previous year’s work. I constantly reinforce that everything posted online is either public or less public, so if you want something to be private, you should never upload it. Below are links to some posts I’ve written detailing specific annual curricular projects I’ve led using this in-house space, The Social Network:

1. Creating social networking profiles with 6th graders:  https://karenblumberg.wordpress.com/2014/12/10/in-6th-grade-life-skills-making-digital-profiles-on-our-in-house-elgg-social-network/
2. Social networking etiquette and other life lessons:  https://karenblumberg.wordpress.com/2011/10/05/social-networking-etiquette-and-other/
3. 7th graders creating faux profiles of Great Mathematicians:  https://karenblumberg.wordpress.com/2010/04/15/social-networking-with-great-mathematicians/
4. 8th graders creating faux profiles of the Founding Fathers:  https://karenblumberg.wordpress.com/2014/10/20/foundingfathers/