Math Formula

Wednesday, September 14, 2011

In Web 2.0, You Are Not the Consumer But the Product

It's hard to count or describe the numerous great experiences I made thanks to couchsurfing since my registration in July 2009. Couchsurfing is a social network dedicated to hospitality exchange. The idea is that users create profiles, similar to other social networks, and can decide (but are always completely free to do so) to offer a place to stay (even if it's only "a couch") to other users of the community. You can search your travel destination for potential couches and send requests to the users there, gather in groups, participate in the meetings of your local community or just host others every now and then yourself. Even though this concept was not invented by CS, it is now the biggest network with some 3 million registered users.

Thanks to CS, not only did I save a lot of money used for accommodation otherwise, but even more important, I met several interesting people, had an extremely joyful time or was simply rewarded with a good discussion or a great meal when hosting travellers myself. 

A nice host with a hyper-active cat in St. Petersburg, a CS-backed Christmas party in Antwerp, staying in a squatted, former brothel in Utrecht, two ukulele playing girls from Montreal, couchsurfers from Banja Luka who turned into real friends, a German couple who visited me in Bosnia by bike (starting in their home country) ... in short, CS is something I'm passionate about.

… or at least I used to be so, until the entire community was shaken by a press release from CS co-founder Casey Fenton three weeks ago, announcing a "new era for CS". Well yes, a new era it is. CS changed its organization type from non-profit to what is called a "B Corporation", a "socially responsible", but still ... corporation.

Before I will take a closer look at what exactly a b-corporation actually is and what it does, a little background information about the history of CS. 

Founded in 2004 by Casey Fenton and Daniel Hoffer, the official mission of the platform is to "Participate in Creating a Better World, One Couch At A Time". Even though the organization was never fully transparent or democratic, the open attitude of the founders and the dedication to achievements for the society made several users engage in the CS project voluntarily, e.g., providing translations and moderating bulletin boards. The project was mainly funded by donations of users. The company operated in a kind of legal grey zone since then, attempting to get the access to the various advantages of being a "501(c)(3) organization". However, the state of New Hampshire rejected that request several times, claiming that CS does not provide sufficient services in public interest.

So (that's what Casey says, not me) there was simply no other way of continuing with CS except of becoming a corporation, or more specific, a B(enefit) corporation. According to B Lab, a US-based NGO issuing B corporation certificates, B corporations are …

… a new type of corporation which uses the power of business to solve social and environmental problems.  B Corps are unlike traditional businesses because they:
  • Meet comprehensive and transparent social and environmental performance standards;
  • Meet higher legal accountability standards;
  • Build business constituency for good business
Becoming a B corporation should enable CS to "build all the features the community has always been asking for", support further growth ... and maybe make some cash as well.

Quite a lot of money, truth be told. Reportedly, CS raised $7.6m in funding from various investors. Unfortunately, no details about the deal were revealed, which even further contributes to the serious irritation of several members of the CS community.

The group We are against CS becoming a corporation is currently supported by more than 2000 users. Some of them were among the most committed users of CS before, organizing meetings and being contact persons for new users and thus promoting the whole idea of the project. Some of them even made contributions in the form of source code, translations for the web page or financial donations. Rightfully, they are now pissed off, because they did donate their money and their free time to a common idea, a common vision ... and not to some Silicon Valley Venture Capitalists.

Consequently, a full list of investors was requested in an open letter to Casey. Up to now, it was disclosed that the major investors are Benchmark Capital (who also have their share in Twitter) and Omidyar Network, well known for their engagement in the Wikimedia Foundation. The fact that Matt Cohler, one of the early founders of Facebook, led the negotiations on behalf of Benchmark Capital now joins the board of CS is also not too well received.

In the meantime, Casey guaranteeing that the service CS provides will always remain free for all members fired speculations about the future business model of CS. Clearly, the aforementioned investment firms will rather not raise several millions without expecting anything in return. 

One possibility seems to be the one chosen by Facebook, which currently has mainly three sources of income:

  • Advertisements (apparently the lion's share of the $1.86bn it made in 2010)
  • Gifts (you can send gifts to your friends for $1 directly via Facebook)
  • Games (e.g., you can buy in-game credits for Farmville with real money)

So, may be some ads are expected on CS in the near future as well – something I could actually easily live with. Using Adblock Plus, a freely available extension for Firefox and Google Chrome blocking unwished ads all over the web, I would not have to struggle with ads.

However, as the recently included "Facebook Connect" functionality (you can log on to CS using your Facebook account) suggests, another possibility seems to be agreement with Facebook. Unfortunately, I have not yet found any way to check what the Terms of Use of CS used to be, because apparently it has been excluded from wayback - I would be grateful for any hint on where to check that. The current Terms of Use state:

4. PRIVACY.  [...] In addition, we provide this personal information to third-party service providers who help us maintain our Services and deliver information and services to you and other users of our Services.

... which actually reads a little bit scary, doesn't it?

But it gets even worse ...

5.1 You Grant Us a License. By submitting any content (including without limitation, your photograph) to our Site, you hereby grant us a perpetual, worldwide, non-exclusive, royalty-free license to use, reproduce, display, perform, adapt, modify, distribute, have distributed and promote such content in any form, in all media now known or hereinafter created and for any purpose.

… which I don't feel too comfortable with, because I really cannot see now to which extend they might execute their formal "rights".

As Don Norman said in a talk about Google recently, even though it appears on first sight that we are their users and advertising is the product, the opposite is true. Web 2.0 companies are making a business of collecting huge amounts of data about their users, and granting advertisers access to that extremely valuable information. Using the "traditional" approach of advertising, ads were displayed based on patterns like: Male, Single, in his sixties– might like something to improve his nightly performance. Now, there is a completely new dimension … male, single, in his sixties … and some of his friends recently bought a new flat screen, so for havens sake, show him an ad for a flat screen right away!

In the light of the above, I was really wondering whether I should continue using CS. I am not at all a fan of their bold move, and I truly share the deep concerns of the opponents of Casey's decision.

However, I remember that when I registered for CS two years ago, I simply thought it might be a cool thing and really did not care about their organization type. So, had it been already a B-corporation or a normal corporation, odds are I would never have thought about it at all and simply accepted whatever they are asking for. It may not be wise, it may not be ethical, but otherwise I would also have to give up using Facebook. And Skype. And Google. Nothing changed about their service, it is still a great opportunity to save money and meet and enjoy inspiring people. So I sigh and yield.

Draw your own conclusions, but keep in mind … in Web 2.0, you are a product.

No comments:

Post a Comment

Search This Blog