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Privacy in Focus Ahead of Facebook IPO

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Facebook’s business is based on the idea that people want to share information about themselves, and its advertising model is predicated on the idea that ads that are targeted based on personal information are more valuable. So to guarantee its growth, Facebook needs to ensure that people don’t feel like Facebook is sharing their information against their will.

That’s precisely why Facebook highlights privacy as a key risk factor in its filings with the Securities and Exchange Commission, and why it’s making a big push right now for users to better understand its privacy policies and initiatives.

In its S-1, Facebook warns that it’s “subject to complex and evolving U.S. and foreign laws, and regulations regarding privacy, data protection, and other matters.” It also says that its traffic could be impacted by “concerns related to privacy and sharing, safety, security.” That’s not the only thing pushing Facebook to clarify its policies — it’s responding to an audit from the Irish Data Protection Commissioner, and the fact that the addition of a number of new products apparently merits new guidelines.

With these risks in mind, Facebook is pulling out all the stops to make its privacy policies clear and simple — proposing changes to its policies and asking users for comments and feedback. Just a few days ago, Facebook launched a dedicated page for everything privacy-related, with information about Facebook’s 10 different policy documents, and easy links so users can see how they’re sharing their information, and how to tweak who gets access to what. The page clarifies how Facebook can use data, and makes it easier for users to adjust settings to control their information.

Monday, Facebook hosted a Q&A with users about privacy changes — addressing concerns such as how to download all your personal information and how to tweak what information users share. Facebook’s Chief Privacy Officer Erin Egan explained how Facebook uses your personal information to target ads, with the idea that targeted ads will be more useful to users.

Some analysts and privacy watchdogs have raised concerns that once Facebook is public, it will face pressure to mine personal information to generate revenue growth. As we head towards the initial public offering later this week, Facebook is pushing to show that by being transparent, it’s putting privacy controls in its users' hands.

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