Privacy As A Service

Backdrop: Whatsapp updated its privacy policy giving itself and Facebook access to account and device information, location information, contact details from the address book.

A business model that has existed in the App economy for a while is advertisements. Businesses use ads to monetize their website/app and the users can pay a premium for a better experience without ads. More the people who use the app, more the business gets paid for displaying an ad on their page. Apps over the years have grown to serve large parts of the population and have morphed itself into an ecosystem. For example, Facebook together with Instagram, Whatsapp, Whatsapp Business etc. This in turn has increased the value of user data for a business. Data about a user, about what they are searching or talking about in Whatsapp can be then used to target ads to them in another platform. This is not something that’s new. But the spotlight on how this affects the user’s privacy is new.

User’s have 2 options. Either they stick with the platform and conform to the new privacy policy. Or they switch to a new alternative. The network effects of these platforms make it incredibly hard to switch. The need for privacy can open avenues for monetization. A new premium tier, that does not track you or your actions on any platform in exchange for a monthly fee.

Privacy-as-a-service model could be an additional source of revenue. But it could backfire. Less data and user-awareness for a social network company could mean a poorer ad service and reach. Not to forget ads make up for the largest part of the revenue in these companies. At the end of the day, companies make money when users consume. And tracking your data is a gateway to that.

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