On weekday mornings you can find me in our
kitchen making breakfasts and lunches for my wife and daughter while listening to the offerings from TuneIn radio on my Amazon Echo Show device. After CNBC, I’ll often listen to what CNN has for
the day. Lately, they’re running a show called "Terms of Service" that includes Clare Duffy interviewing Frank McCourt.
It’s a terrific interview that talks about some
great topics including a future where A.I. agents replace apps. I highly recommend it.
If you don’t know who Frank McCourt is, I was surprised to find out that he’s the
same guy who wrote the amazing memoir called "Angela’s Ashes." It came out in 1996 and won a Pulitzer Prize. It’s a truly fantastic book and I have a great deal of respect for him.
It appears that he made a lot of money from writing and has gone on to invest in all kinds of businesses including real estate, sports and tech. At one time, he was an owner of the Los
Angeles Dodgers. Prior to his book, he was a teacher in New York City for 27 years. CNN calls him a billionaire investor.
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More recently, McCourt is the founder and executive chairman
of Project Liberty, an initiative aimed at creating a new, equitable internet infrastructure. Together with Kevin O’Leary (a.k.a., Mr. Wonderful), they were partners in the “People’s
Bid” to buy TikTok’s U.S. operations. Their plan is to replace its algorithm with one that gives users control over their data.
He’s obviously an amazing person but
I disagree with him on some of his views about data. McCourt believes that it’s a really bad deal for people to give up all their personal data for free apps. He believes it’s
fundamentally wrong for these platforms to own our data. He thinks we should own our own data and share it on a permission basis.
In the interview, McCourt says Project Liberty has
hired amazing technologists and have been building an alternative to current internet platforms that gives individuals more control. The challenging part, he says, has been how to get people to adopt
it.
McCourt goes on to say that when the news came out that the U.S. wanted to ban TikTok and sell it to U.S. buyers without the algorithm, it was very “serendipitous,”
because his team had already built the technology that could replace it. They would be able to buy TikTok, sans the algorithm, and simply move the 170 or so million users over to their new technology
stack. He said it would solve a national security problem and spin up an alternate internet. This is why he and O’Leary entered the fray and put forward a bid that would qualify under the
legislation.
Unfortunately for McCourt and O’Leary, the deal went to another party. According to CNN, they’re investigating if the alternate deal complies with the
sale-or-ban law passed last year and whether it addresses the national security concerns behind the legislation.
This is all interesting on its own, but what I want to discuss is the
popular premise behind McCourt’s comments on CNN that “it’s a really bad deal for people to give up all their personal data for free apps.” I don’t know that he’s
done the math.
As a former business development person for many years, I’m always interested to learn the numbers behind the businesses. How do they make money? I find it so
interesting.
Let’s use Meta as an example. According to a Meta press release, the company had a net income of $62.36 billion in 2024. This is for its entire company, including
Facebook, Instagram and Messenger.
During the same year, Statista reports the combined number of daily active users (DAU) for Meta platforms was 3.65 billion.
If
you divide Meta’s income by its number of users, it amounts to $18.61 (62.36/3.65=18.61). If you were to do the same calculation based on subscribers instead of users, it comes out to $15.59
(62.36/4=15.59).
It simply isn’t true that peoples’ data is very valuable to them personally and that these technology companies are exploiting them by harvesting and
using their data.
For about the same price as one dinner at Chipotle, Meta subscribers can use all of Meta’s platforms every day, 24 hours a day, for 365 days a year with no
blackout periods. If you ask me, that’s more than a fair deal. In fact, it’s fantastic.
The whole idea of your data being yours sounds a little ridiculous to me. If the
people using Meta’s platforms were apple trees and Meta was a farm that produced apples, would the apples belong to the trees (people) or the farmer (Meta) that harvested them? If it were a
farm, the apples would belong to the farmer and not the trees.
Speaking of harvesting, who do you know that takes the time or even has the means to harvest their own data? Yeah, try
writing down every website you go on, start and end time, length of view, URL and everything that goes with it. The answer is simple: no one. The only reason we’re even having this discussion is
because these platforms are doing the harvesting on our behalf.
I guess you could argue that the platform doesn’t own the people the way that the farmer owns the trees, but
either way the value of data to an individual is negligible and it’s inaccurate to say that free apps are a bad deal. They may have other issues as it relates to privacy and the way they
manipulate people to increase usage, but they’re not a bad deal, at least not from a financial perspective.
While I don’t agree that everyone’s data is valuable to
them individually, I do love the idea that people make money from their user-generated content, but I think that’s a separate conversation and not the one that McCourt is advocating. Maybe,
it’s mixed in there somewhere and I’m just not privy to the whole plan.
Frank McCourt and Kevin O’Leary are obviously great investors, extremely smart people and I
believe that they have good intentions, but I think it’s inaccurate to sell their proposal by telling people that free apps are a poor bargain.