What is the cost of “free”?

One argument that I commonly hear from people who are not bothered by Facebook’s changes in their privacy policies is that Facebook can do what they want, because it’s their service, and they’re providing it to us for free. If they were charging money, we might have cause to complain, but, hey, it’s free, so we should be happy for whatever we get.

But here’s the thing: no, it’s not free. You’re paying with your information and your privacy — those are the currencies in use, here, not dollars nor euros nor shekels nor yen.

And make no mistake about it: there’s a lot of value in information, and particularly in information that people would otherwise like to put privacy restrictions on. That’s why Facebook is changing the rules, and that’s why Facebook is allowing applications and business partners to bypass the access controls that do remain available.

This doesn’t make Facebook evil, nor unique. They recognize the business value of what they have, and they’re trying to make the most of it — and we do have a choice of whether to use their service or not.

Google is using the same business model, but is so far ahead of Facebook that the latter can’t even see the former’s taillights. Google has aggregated more of our information than we can imagine, depending upon which of its services we use — our profile information; our full search history since forever; our email (Gmail); our calendars (Google Calendar); our photos (Picasa) and videos (YouTube), both what we post, and what we look at); the places we look for (Google Maps); the blogs we write (Blogger); the blogs and news we read (Google Reader); even some of our buying history — and is using it to target advertisements. It’s also stashing it away, to be data-mined later.

We make the same choice there: are we willing to pay for these services? We can buy services for money. Or we can buy services with our private information. It’s fine to make that choice, to choose to give someone else control of some of our privacy in exchange for something we want.

We should just understand that that’s what we’re doing.