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Facebook Wants Children -- Yours -- to Boost Ad Sales

CEO Mark Zuckerberg wants kids under 13 to be on Facebook, according to an interview in Fortune. It's all about education, he says. Let those kids reach out to each other and say the darndest things, all while sparking each other's thirst for learning.

Uh, yeah. Kids will go to Facebook and turn it into an educational experience, and I'm about to dance in Swan Lake for the Joffrey Ballet. Zuckerberg's statements are either incredibly uninformed or disingenuous. To pretend there are no social networking outlets for kids is nearly farcical, and to say that regulations prevent Facebook from allowing those under 13 to be members is factually incorrect. The likely fuel for his interest in scuttling long-established online protections for children is an increasing desperation to pump up revenue in advance of an IPO.

It's all for the children
According to the interview, Zuckerberg is passionate about education. After all, he pledged $100 million to the Newark, N.J., school system, right? And now it's the primary reason he wands to let kids under 13 onto social networking sites like Facebook, as Fortune explains:

He also shared anecdotes from his own education and upbringing, gave advice to other entrepreneurs and talked about why he wants kids under 13 to be on Facebook."Education is clearly the biggest thing that will drive how the economy improves over the long term," Zuckerberg said. "We spend a lot of time talking about this."
He argues that students could more easily learn from one another. There's a problem, though. There already are social networking sites for kids, some with tens of millions of users. There are also specific educational networking sites for the younger crowd.

And it's not as though kids of school age aren't already on Facebook. According to a Consumer Reports study, more than a third of minors already on the service are under 13. That translates into 7.5 million, according to the publication

Maybe Zuck doesn't get around much anymore online. However, here's some major misdirection that Fortune reporter Michal Lev-Ram swallowed hook, line, and sinker:

Zuckerberg said he wants younger kids to be allowed on social networking sites like Facebook. Currently, the Children's Online Privacy Protection Act (COPPA) mandates that websites that collect information about users (like Facebook does) aren't allowed to sign on anyone under the age of 13. But Zuckerberg is determined to change this."That will be a fight we take on at some point," he said. "My philosophy is that for education you need to start at a really, really young age."
Look at information the Federal Trade Commission provides. COPPA doesn't prevent websites from allowing children under 13 to participate, even if the sites do gather personal information. Rather, the regulation provides some restrictions and rules, including the following:
  • The company must have a clear and understandable privacy disclosure that explicitly states how the site gathers information (whether directly from the child or passively through cookies or other behavioral tracking technology) and what it does with the data.
  • There must be verifiable parental consent for a company to collect personal data about the child.
  • The parent must have the option to allow data collection but forbid disclosure to third parties.
  • Parents can review a child's personal information, order the company to delete it, and forbid future collection and use of data.
  • Before disclosing information to third parties, sites must have reliable forms of authorization, including signed forms, credit cards in a parent's name, or email with a digital signature.
Even passing on information to advertisers isn't forbidden. A company just has to be up front about what it's doing and give control to the parents.

Or maybe it's for Facebook
Apparently, that's too much for Zuckerberg. Given that Facebook doesn't even allow users to actually delete their own messages, you might expect that giving anyone real control over their own information would play badly with corporate strategy. The company is already in potential hot water over using minors' images in ads.

The real issue is ads and membership growth. Facebook wants to justify a high IPO valuation. The soaring success of the LinkedIn (LNKD) IPO sets hefty expectations. However, Facebook has seen a recent cooling of investor ardor:

"At the current valuation where it is, it is really hard to justify the investment," said Sumeet Jain, partner at venture capital firm CMEA Capital, who has examined Facebook deals recently and has taken a pass. "It's hard to imagine it will turn into a $270 billion company in the next few years."
As my colleague Jim Edwards pointed out, Facebook's ad business is fragile, and that isn't a good sign for the IPO. Facebook recently tried to spin the media to reignite financial interest. The company just lifted promotional restrictions to help kick up revenue. Why not recruit masses of minors?

With 600 million consumer accounts, Facebook can't keep growing at its current pace, and the prospect of explosive growth gets the big multiples for public valuation. Reach younger kids and you have an enormous new audience with a chance to sell even more ads. Think of how much easier that is if you can remove regulatory restraints on turning children into ATMs.


Images: morgueFile users lynette and kevinrosseel, site standard license
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