I was reading an article on Naked Security earlier about updates Twitter is making to its mobile applications, on various platforms, that might be alarming to some people, depending on just how much personal data you’re comfortable having mined by social media companies.
Apparently, Twitter is preparing to rollout “app graph,” their term for what is essentially a list of all of the applications installed on your mobile device. “App graph,” according to Twitter, is intended to provide additional data to “deliver tailored content that you might be interested in.” Reading between the lines, that means refining targeted advertising in Twitter.
One might be tempted to ask why targeted ads are critical to Twitter, and the answer, quite simply, comes down to a matter of cash.
More specifically it has proven difficult for Twitter to monetize 140 character messages, particularly in the face of less-than-expected user demand. This reality becomes evident in Twitters’ quarterly financial statements that demonstrate large GAAP losses despite increased revenue. For example, in 2014 Twitter has posted losses ($132 million in Q1, $145 million in Q2, and $175 million in Q3) that has sent TWTR south from a 52-week high of $74.73 to a Dec 2 close of $38.91 (that’s nearly a $23 billion loss in market capitalization).
Twitter clearly needs to turn around its losses, and it has two ways to do that. The first option is to increase the size of its user base, and App Graph may be somewhat helpful on that front by improving Twitter’s out-of-the-box experience, but that approach has limits. The second way is to take a page from Google’s playbook and focus on increasing the reliability of its targeted advertising (hence raising its value). App Graph, seems to be an attempt at laying the groundwork for option two.
I go through the pains of pointing all of this out to drive home the point that, in the digital world, privacy is intrinsically linked to a company’s financial performance (and this isn’t just true for Twitter), and it can be tempting for corporations to abuse the privileged trust that users bestow upon them.
I’m not saying that’s the case with Twitter. In fairness, Twitter indicates in their support document that App Graph will provide a notification to users when the feature goes active, so it isn’t as if (at least if the feature works) Twitter is completely “putting one over” on its users.
I do think it is a good time to start asking ourselves about the ethics of the industry’s current “opt-out” model for introducing new features that may potentially share private data. Where is the proverbial line in the sand?