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I thought user data was one of the most valuable assets of a business. When I worked at Company X, one of our competitors was failing and offered us to buy the

I thought user data was one of the most valuable assets of a business. When I worked at Company X, one of our competitors was failing and offered us to buy them out. The most expensive part of the buyout was calculated basically by #users*<some price>. And really that's all we wanted, was their userbase, since we already had the product they wanted. We could absorb their users and immediately grow our business.

mc32 11y ago
I think there's a difference between we'll sell you all this data we have on our users, some of which is related to conducting business with them, and here are our paying customers who you can acquire and continue to provide goods and services to.
- dm2 11y ago
  Can you better explain the difference please?
  - cjslep 11y ago
    Amazon buying Newegg customer data from Newegg, vs Amazon buying Newegg and rerouting the Newegg website backend through its own network.
    - dm2 11y ago
      I understand the two sides, but what's the difference to the consumer who has a Newegg account but does not want Amazon to have their personal data? In the end, Amazon would end up with the consumers data, so to the consumer there is no difference. Are you saying that there is a difference? That's what I wanted clarification on, what that difference was.
      - cjslep 11y ago
        To continue with the analogy above the difference arises if Newegg says "We don't share your data with third parties" and does #1. That would breach customer expectations because they are outright lying. The #2 case seems much less clear cut because Newegg wouldn't exist as a standalone entity anymore, and most people's reasonable expectation is Amazon would then have access to Newegg's data. It depends on each person's answer to the question: Is Amazon a third party in the second example?
        dm2 11y ago
        You are assuming that a Privacy Policy is legally binding, it's generally accepted as not being. In the example, Amazon can do whatever it wants with the data. Data submitted to almost anyone online (maybe with the exception of large companies or companies specifically designed to not track data) should be considered public unfortunately. I have seen some states recently put in place laws to protect this data from being made public or sold carelessly, but for the most part it is unregulated as far as I can tell.
        edwhitesell 11y ago
        While I agree that it's probably not legally binding (I beleive even the standard "Click and connect" contracts have been thrown out of courts in the past), do you have any references to share?
        dm2 11y ago
        I haven't looked for any precedent cases. TRUSTe was suppose to do something similar, but it's seal doesn't mean much anymore (not that it ever really did). http://en.wikipedia.org/wiki/TRUSTe http://en.wikipedia.org/wiki/TRUSTe Medical records, children's data, and sensitive financial data is protected under US law. US-EU Safe Harbor has some consumer data protection rules. http://en.wikipedia.org/wiki/Personally_identifiable_information#United_States_of_America http://en.wikipedia.org/wiki/Personally_identifiable_informa... http://en.wikipedia.org/wiki/Privacy_policy#Applicable_law http://en.wikipedia.org/wiki/Privacy_policy#Applicable_law
        11y ago
    - tomswartz07 11y ago
      I think it's more of the following: NewEgg selling customer data to Amazon, AND EBay, AND LinkedIn, AND Joe Schmoe's Tech Emporium. Each have their own data sharing policies. vs. NewEgg selling the entire business and assets to Amazon (and only Amazon). In this case, everything; hardware, product stock, servers, and data too.
    - sre_ops 11y ago
      Nether cases are applicable. https://www.law.cornell.edu/rules/frbp https://www.law.cornell.edu/rules/frbp
- ploxiln 11y ago
  The second case is different, and less directly harmful, but still bad for the "free market". You end up in a situation where you have a few huge companies that have shitty expensive products and huge amounts of money. If anyone ever does better, they use some of the money to acquire the customers. No one ends up with something better or more cost effective; the 800lb gorilla just pays a tax to remain the only choice, and that cost is easily passed right back to the customers.
  - plaguuuuuu 11y ago
    >but still bad for the "free market". Yet another case whereby a natural consequence of a free market is "bad" for the free market. In reality it's only bad for the consumer, and certainly not the businesses.
    - ploxiln 11y ago
      And that second case really annoys me, but I'd still rather not take the alternative to a free market, which is that idiots and douchebags decide what's good for me, and leave me with even less choice.
  - stickfigure 11y ago
    "Acquiring the customers" seems to be a business strategy with a high failure rate, else we'd be yahooing instead of googling or facebooking. It's hard to predict what competitors are going to blow up, and as soon as they get traction the price goes high - Facebook may have bought WhatsApp, but apparently SnapChat is holding out for more. I actually think the "free market" works pretty well at this, even if it's not perfect. Nothing is.
    - ploxiln 11y ago
      That's a good point. I suppose this thing is a natural driver of the recent focus on user-traction over profitability.
fleitz 11y ago
"data" is a valuable asset, however, in many jurisdictions 'user' data is considered property of the user, not the agency that collected it. Think of it like software, your data is not the property of Facebook, but rather, they have a license to use it.
- Domenic_S 11y ago
  Well sure, but when the license is perpetual and royalty-free, what's the difference? > For content that is covered by intellectual property rights, like photos and videos (IP content), you [...] grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). https://www.facebook.com/legal/terms https://www.facebook.com/legal/terms
  - candu 11y ago
    The main difference is that "non-exclusive" part: you retain the right to license it out to other entities, or to use it for your own purposes.
    - ethbro 11y ago
      Not sure if you meant "you" or "they" there, but the "you" case is more interesting. No, "you" generally do not effectively retain the right to license your data collected by a third party out to other entities, because (as far as I know) there are no laws which require that third party to provide you with the data they've collected. Examples here would be 23andMe vs. Fitbit. 23andMe is in the business of collecting data from you (in essence), then providing it to you and using it for their own purposes. Fitbit is in the business of collecting data from you, then processing it and performing a number of black box calculations, then providing you summarized results. (Caveat: yes, I am aware that most activity trackers have API / export functionality. However, in all the instances I looked at that's limited and generally crap compared to the raw take the main party has access to)
  - sangnoir 11y ago
    >Well sure, but when the license is perpetual and royalty-free, what's the difference? There would be a difference if the license is non-transferable. Then Facebook wouldn't be able to give or sell that data to 3rd parties as part of a bankruptcy sale. Edit: in the case of RadioShack's user data, I doubt that they got customers' agreement for a transferable license to the data.
gcb0 11y ago
> expensive part of the buyout was calculated basically by #users<some price> I bet this had nothing to do with user data, but with user acquisition cost. if company spends $10 on marketing and $15 on R&D per new user every quarter, then paying #users$10 when buying a dying competitor is a bargain.

mc32 11y ago

I think there's a difference between we'll sell you all this data we have on our users, some of which is related to conducting business with them, and here are our paying customers who you can acquire and continue to provide goods and services to.

dm2 11y ago
Can you better explain the difference please?
- cjslep 11y ago
  Amazon buying Newegg customer data from Newegg, vs Amazon buying Newegg and rerouting the Newegg website backend through its own network.
  - dm2 11y ago
    I understand the two sides, but what's the difference to the consumer who has a Newegg account but does not want Amazon to have their personal data? In the end, Amazon would end up with the consumers data, so to the consumer there is no difference. Are you saying that there is a difference? That's what I wanted clarification on, what that difference was.
    - cjslep 11y ago
      To continue with the analogy above the difference arises if Newegg says "We don't share your data with third parties" and does #1. That would breach customer expectations because they are outright lying. The #2 case seems much less clear cut because Newegg wouldn't exist as a standalone entity anymore, and most people's reasonable expectation is Amazon would then have access to Newegg's data. It depends on each person's answer to the question: Is Amazon a third party in the second example?
      - dm2 11y ago
        You are assuming that a Privacy Policy is legally binding, it's generally accepted as not being. In the example, Amazon can do whatever it wants with the data. Data submitted to almost anyone online (maybe with the exception of large companies or companies specifically designed to not track data) should be considered public unfortunately. I have seen some states recently put in place laws to protect this data from being made public or sold carelessly, but for the most part it is unregulated as far as I can tell.
        edwhitesell 11y ago
        While I agree that it's probably not legally binding (I beleive even the standard "Click and connect" contracts have been thrown out of courts in the past), do you have any references to share?
        dm2 11y ago
        I haven't looked for any precedent cases. TRUSTe was suppose to do something similar, but it's seal doesn't mean much anymore (not that it ever really did). http://en.wikipedia.org/wiki/TRUSTe http://en.wikipedia.org/wiki/TRUSTe Medical records, children's data, and sensitive financial data is protected under US law. US-EU Safe Harbor has some consumer data protection rules. http://en.wikipedia.org/wiki/Personally_identifiable_information#United_States_of_America http://en.wikipedia.org/wiki/Personally_identifiable_informa... http://en.wikipedia.org/wiki/Privacy_policy#Applicable_law http://en.wikipedia.org/wiki/Privacy_policy#Applicable_law
        11y ago
  - tomswartz07 11y ago
    I think it's more of the following: NewEgg selling customer data to Amazon, AND EBay, AND LinkedIn, AND Joe Schmoe's Tech Emporium. Each have their own data sharing policies. vs. NewEgg selling the entire business and assets to Amazon (and only Amazon). In this case, everything; hardware, product stock, servers, and data too.
  - sre_ops 11y ago
    Nether cases are applicable. https://www.law.cornell.edu/rules/frbp https://www.law.cornell.edu/rules/frbp
ploxiln 11y ago
The second case is different, and less directly harmful, but still bad for the "free market". You end up in a situation where you have a few huge companies that have shitty expensive products and huge amounts of money. If anyone ever does better, they use some of the money to acquire the customers. No one ends up with something better or more cost effective; the 800lb gorilla just pays a tax to remain the only choice, and that cost is easily passed right back to the customers.
- plaguuuuuu 11y ago
  >but still bad for the "free market". Yet another case whereby a natural consequence of a free market is "bad" for the free market. In reality it's only bad for the consumer, and certainly not the businesses.
  - ploxiln 11y ago
    And that second case really annoys me, but I'd still rather not take the alternative to a free market, which is that idiots and douchebags decide what's good for me, and leave me with even less choice.
- stickfigure 11y ago
  "Acquiring the customers" seems to be a business strategy with a high failure rate, else we'd be yahooing instead of googling or facebooking. It's hard to predict what competitors are going to blow up, and as soon as they get traction the price goes high - Facebook may have bought WhatsApp, but apparently SnapChat is holding out for more. I actually think the "free market" works pretty well at this, even if it's not perfect. Nothing is.
  - ploxiln 11y ago
    That's a good point. I suppose this thing is a natural driver of the recent focus on user-traction over profitability.

fleitz 11y ago

"data" is a valuable asset, however, in many jurisdictions 'user' data is considered property of the user, not the agency that collected it. Think of it like software, your data is not the property of Facebook, but rather, they have a license to use it.

Domenic_S 11y ago
Well sure, but when the license is perpetual and royalty-free, what's the difference? > For content that is covered by intellectual property rights, like photos and videos (IP content), you [...] grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). https://www.facebook.com/legal/terms https://www.facebook.com/legal/terms
- candu 11y ago
  The main difference is that "non-exclusive" part: you retain the right to license it out to other entities, or to use it for your own purposes.
  - ethbro 11y ago
    Not sure if you meant "you" or "they" there, but the "you" case is more interesting. No, "you" generally do not effectively retain the right to license your data collected by a third party out to other entities, because (as far as I know) there are no laws which require that third party to provide you with the data they've collected. Examples here would be 23andMe vs. Fitbit. 23andMe is in the business of collecting data from you (in essence), then providing it to you and using it for their own purposes. Fitbit is in the business of collecting data from you, then processing it and performing a number of black box calculations, then providing you summarized results. (Caveat: yes, I am aware that most activity trackers have API / export functionality. However, in all the instances I looked at that's limited and generally crap compared to the raw take the main party has access to)
- sangnoir 11y ago
  >Well sure, but when the license is perpetual and royalty-free, what's the difference? There would be a difference if the license is non-transferable. Then Facebook wouldn't be able to give or sell that data to 3rd parties as part of a bankruptcy sale. Edit: in the case of RadioShack's user data, I doubt that they got customers' agreement for a transferable license to the data.

gcb0 11y ago

> expensive part of the buyout was calculated basically by #users<some price> I bet this had nothing to do with user data, but with user acquisition cost. if company spends $10 on marketing and $15 on R&D per new user every quarter, then paying #users$10 when buying a dying competitor is a bargain.