Facebook co-founder Mark Zuckerberg addresses at the Internet.org Summit - 2014 in New Delhi, on Oct.9, 2014. (Photo: IANS)

Paid vs Free Ad-based Model: Zuckerberg Takes Shot at Apple CEO Tim Cook

Reacting to Apple chief Tim Cook’s criticism that the recent ad-centric businesses like Google and Facebook are not in “alignment with customers”, Facebook founder Mark Zuckerberg depicted it as the “most ridiculous concept.”

In an interview with Time magazine, Zuckerberg said, “What, you think because you’re paying Apple that you’re somehow in alignment with them? If you were in alignment with them, then they’d make their products a lot cheaper!”

In fact, Tim Cook’s recent comment has spurred debate over the ad-linked business vs paid customer model, criticising the two advertisement-supported businesses for using the customer as a prduct base and inhibiting their privacy.

“If making money mainly by collecting gobs of personal data, I think you have a right to be worried,” Cook said in an interview. “And companies I think should be very transparent about it.”

The debate has, for the first time, brought into focus the world-wide phenomenon of building businesses online around collecting personal data and selling it to the third party for advertisement purpose.

Unlike Google and Facebook, Apple is into manufacturing hardware products providing no open source product, nor collecting the kind of information that Facebook or Google do. In fact, this was a strong selling point for Apple’s products, though critics point out the leakage of nude photos of celebrities on its iCloud recently.

The debate is whether Apple users are willing to buy its products mainly because they are walled and not openly sourced like Android phones. The price that they are paying is almost double the price that their co-customers pay for Android phones.

In fact, the debate was there since 2007 when Steve Jobs and Google CEO Eric schmidt met in Calafia restaurant in Paul Alto to discuss the ingredents of iOS vs Android platform and possible patent violation. Though, Eric Schmidt did not reply to Tim Cook’s latest outrage, he had explained it in his co-authored book “How Google Wroks”.

“Google bet on the superior economics of an open platform” and admitted that Android is “out of control” for Google, which is opposite of what Apple iOS code is. “Steve always believed that the best experience for the consumer comes from maintaining complete control of everything,” writes Eric in the book.

But almost seven years later, Jobs’ heir Tim Cook pointed out the newly emerging model as paid-controlled model vs open and ads-driven model into which the latest entry is Facebook, which has shown how to compromise the privacy concerns for a free platform.

Otherwise, the debate highights for umpteenth time the question of sharing privacy with advertisers for free product or pay and control it fully.

In a recent survey by the Acquity Group, now part of Accenture Interactive, consumers have expressed their willingness to share personal info for the discounts they are offered, irrespective of privacy concerns, which are often seen to benefit celebrities than the common man.

Nearly 80% of consumers have privacy concerns, according to the 2014 State of the Internet of Things Study but half of them said they would be willing to share personal details collected by werable devices with third-party retailers if they are given discount coupons, rebates or other benefits.

Facebook has more than 1.3 billion users, while Google has 1 billion users on its google+ and Google chrome products. Facebook has generated $7.87 billion in ad revenue last year, a billion and a half of it as profit. Both companies are accused of actively collecting personal information of their users and selling it to the advertisers, though they claim that it was based on an explicit consent.

Apple model has generated huge profits for its iPhones and iPads and the company has $150 billion in cash on hand but never compromised on its selling price, pointed out Zuckerberg in his interview with the Time magazine. The walled approach of Apple is something that Google and Facebook are trying to wriggle out but privacy compromised in return.

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