Getting Rich From Others Was Never Easier (opens in new tab)

My gut feeling is that, privacy issues aside, the people who are really getting fleeced are advertisers.

Complaining that Twitter/Facebook are profiting from providing a platform for people's conversations is like complaining that a bar owner provides nothing but an empty room and some booze while the patrons provide all the real value - is the publican getting rich off the "free work" of his customers?

For user-generated broadcast content (HuffPo), he's got a point though.

The problem with this article is the author draws a dubious line between three different things.

Facebook and Twitter provide a service for no money but you end up paying them in content which they trade to advertisers (who then give them money). Making social networking nothing more than a traditional transaction with a middleman.

The Huffington Post doesn't pay its authors or provide a service but they do offer a chance at fame through a famous distribution model. Making it a lot like gambling where most people pay more than the experience is worth (by generating content and never getting famous) while a lucky few extract a huge portion of the value (by becoming famous). But The HP is just like the Casino extracting a piece of the action through advertising.

What Business Insider does is just kind of slimy. But it mostly quotes famous people who don't seem to care if Blodget takes money from them.

So we're talking about three very different phenomenons

It'd be nice if the author of the story would point out how Instapaper is different than Business Insider, in that the content it "harvests" is content that the user must first see by going to the actual website where the content exists, and save the page for later viewing, meaning that the original site still gets credit for at least 1 page view. Instapaper also does not pretend or try to trick the reader into thinking that the content belongs to or is generated by Instapaper staff. Henry Blodget knows that his actions are dubious, and is grasping at straws with his comparison.

I think most people don't view social networks as extracting value from their user's the way they view financial traders doing so.

Some people will say that quant trading adds some value, but that the amounts the traders reap is too much.

I believe the value quant trading provides to its customers in proportion to the value it extracts is on par with social networking. A lot of the people who make arguments that quant trading provides no value have no idea how to value the liquidity that quant traders provide in the same way they can value what social networking provides. To appreciate what (most) quant trading firms provide, you have to have transacted frequently and significantly in the market.