Maybe the rumors are destined to make rounds at least once a year. Or maybe they will eventually taper off for good. Either way, they are back again. Paragraph-long posts in the Facebook (FB +0.58%) News Feed purportedly aimed at protecting users from an upcoming requirement to pay to keep their profiles private are circulating rapidly. But just as the rumors were false last year, they are again false this year. Indeed, even the hoaxes are the same again -- word for word.
The rumors
"Now it's official! It has been published in the media," begins a hoax going around on Facebook. "Facebook has just released the entry price: £5.99 ($9.10) to keep the subscription of your status to be set to 'private.'"
The hoax continues to advise users to copy and paste this message to their page in order for Facebook to be exempt from paying.
Another similar status going around like wildfire in recent weeks advises users to post a legally binding status update on their page to dodge Facebook's efforts to make their information public.
"If you do not publish a statement at least once it will be [tacitly] allowing the use of your photos, as well as the information contained in the profile status updates," the hoax threatens.
Both of these viral rumors are false.
The social network's Statement of Rights and Responsibilities explains the company's approach to privacy.
"You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings," Facebook asserts.
For instance, while Facebook policies state users give the social network permission to use photos and videos, the social network also says the permission is subject to a users specified privacy and application settings.
In short, users have control of how the information and content they post on Facebook is shared.
Reviewing Facebook's business model
With these rumors circulating, it's a good time for users and investors to review Facebook's underlying business model, and why the company is an advocate of offering the service for free.
The ongoing difference in Apple's product-focused business model and Facebook's ad-supported model gives insight into the company's preference for free versus a paid service.
"A few years ago, users of Internet services began to realize that when an online service is free, you're not the customer. You're the product," Apple CEO Tim Cook wrote last year in a letter on the company's privacy website. The letter was clearly aimed at companies such as Google and Facebook, both of which make the majority of their revenue and net income from advertising fees.
The letter continued:
But at Apple, we believe a great customer experience shouldn't come at the expense of your privacy.
Our business model is very straightforward: We sell great products. We don't build a profile based on your email content or web browsing habits to sell to advertisers. We don't "monetize" the information you store on your iPhone or in iCloud. And we don't read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple.
Apple can take stances like this because its business doesn't depend on advertising. The majority of Apple's profits are derived from markups on its products.
But there is a positive case for the flip side of the coin, and Zuckerberg outlined it eloquently in an interview in Time magazine last year:
A frustration I have is that a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers. I think it's the most ridiculous concept. What, you think because you're paying Apple that you're somehow in alignment with them? If you were in alignment with them, then they'd make their products a lot cheaper!
In short, Facebook values both privacy and free. These rumors, therefore, couldn't be further from reality. While the company could, at some point, introduce some version of a paid service, it wouldn't be one that would threaten to make user information public if users don't pay a monthly fee.
