Sunday, December 12, 2010

Can FTC "Do not Track" policy stop my Facebook stalkers??


Technology has been a great addition to the Global economy over the past few decades. It has helped ease workload, socializing and most importantly communication. But, this does not mean it has not had a few negative effects. The explosion of social media and its use are widespread in not only our every day lives but also in the every day businesses of almost every industry. Each day, companies in all industries make use of social media in a number of ways to reach consumers to transmit information, support or service. Facebook in particular has come under fire for the way it handles users’ information, including changes to its privacy settings and more recent developments such as the fact that user IDs were being sent to third-party companies. The company decided that it had all rights to release the information that people put on their accounts to online search engines such as Google and Bing. This has been a growing problem, which Federal Trade commission has been busy trying to control.
              
         Less than a month ago, the FTC revealed a framework to Control Consumer Privacy entitled “ Protecting Consumer Privacy in an Era of Rapid Change”.  The proposals by the regulatory commission ranged from less serious ones such as clearer and more concise policies to more dramatic policies such as the “Do not track” button on websites to prevent data mining and regulate business marketing practices. The proposed framework has three primary components:
  • Data Protection: Companies should implement a “privacy by design” approach by implementing privacy protections as a part of their overall business model.
  • Consumer Choice/Clear Opt Outs: Companies should allow consumers to choose which data the company collects and for what purpose.
  • Education and Disclosure: Companies should make their privacy polices more transparent by stating their privacy statement in layman terms as to not decieve consumers.

This “Do Not Track” policy was initiated to allow Internet users to choose whether their web activity can be monitored.   Although the above strategies were proposed, I believe that the FTC has not done enough to help prevent the data mining on social media sites. The report was issued based on what they feel is slow progress in self-regulation and standardization. Firstly, it says that these guidelines are to be enacted in 2011 but not certain of a date. Secondly, the guidelines seem very abstract; they do not seem strict enough to prevent these social media sites. The FTC provided few details even though its incoming chief technologist Edward Felten said the system would offer a "comprehensive opt-out.” Lastly, I believe it gives the government a backdoor to access people's personal information. “Do Not Track” mechanism could potentially require individuals to surrender more personal information about themselves to companies or the government for purposes of authentication and enforcement of the rule. It would also require a re-architecting of the Internet and the potential regulation of every web browser to ensure compliance.  This will give the FTC and other lawmaker’s far greater control over the Internets architecture.

What are your thoughts on the proposed Do Not Track regulations?  Does this pose a serious threat to online marketers?  Will the average web user see this as a valuable form of privacy protection?

Sunday, December 5, 2010

Another successful Internet Giant...Groupon

           The past few years have been known to be the age of technology. This time period has caused for the vast boom of the online market. Companies such as Google, Facebook, Amazon and Yahoo have been known to monopolize the online market in their various fields. Each day, a new Internet company is established, but competing with various giants such as Google and Facebook is a difficult one and in turn limits the success of the ne companies.
          One of the latest online success is Groupon, a deal of the day website known to be the best coupon site on the web. The company works by featuring an unbeatable deal on the best stuff to do, see, eat, and buy in your city every day. The website created by CEO Andrew Mason in April,2008 and is now operating in more than 150 markets around the world. The name of the company refers to the business model: The company offers one “Groupon” per day in each of the markets it serves. If a certain number of people sign up for the offer, the deal becomes available to all. If the predetermined minimum isn’t met, no one gets the deal that day.



           I believe this approach serves two beneficial purposes to all parties, the retailers, the consumers and Groupon: First, it provides some risk mitigation for the retailer, who can treat the coupon as quantity discounts and sales-promotion efforts. This helps bring about new customers of various outlets as well as helps keep existing customers by bringing in traffic and sales and discounting, especially in this economy. Second, it helps spread the word through social groups, as people who want the deal tell their friends about it to increase the chances of reaching the tipping point. Groupon does this by sending emails to their members and encouraging them to spread the words to friends and relatives in order to meet the quota so the coupon discount can be fulfilled.
            Although Groupon is know to have many competitors in their supposed narrow field. The company has been able to be a giant in this segment as it is believed to have a comparative advantage in its high discounts as well as its mode of marketing. Due to this immediate success after just two years, Google offered to buy the company for 5.3 billion dollars. Unlike most small businesses, Groupon refused this sell as they see the same potential in their future that Google also perceived.
Overall, the success of instant success of Groupon has been quite astonishing. The company was founded in 2008, an age where the world economy was at one of the worst depressions since that of the 1930’s. At this time, consumers reduced their purchasing power but at the same time all sources of discounts seemed very attractive. This is believed to have lead to the high rise of what my friend calls “her shopping delight” Groupon.

So was the financial crisis of 2008 the cause of the rise of Groupon??

Resources:
http://www.squidoo.com/groupon-review
http://www.crunchbase.com/company/groupon
http://www.marketwatch.com/story/groupon-reportedly-spurns-google-merger-2010-12-04