Retaliating to the remarks from Apple CEO Tim Cook over Facebook’s business model with built-in advertising, Facebook CEO Mark Zuckerberg slammed Cook. Zuckerberg said that Apple’s products don’t align with its customers because they are very expensive, and if they were aligned with their customers, those products would be a lot cheaper. He said that to sell Apple products, Tim Cook chooses to charge “an arm and a leg.”
In an interview with Lev Grossman of Time Magazine, Mark Zuckerberg said:
“A frustration I have is that a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers. I think it’s the most ridiculous concept. 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!”
Cook hasn’t particularly mentioned any services or products, but it was supposed to taunt Google, and Facebook also comes in the blast radius. Recently, a new ad-free social network Ello also marketed itself as anti-Facebook social network and said that Facebook is treating its users as the product, not customers.
Apple CEO showed his concerns over such companies’ data collection policy in order to make more money by selling this data to advertisers. Cook also stressed that these companies should be very transparent to its users as well as the lawmakers.
Facebook and Apple’s business model are completely opposite of each other. Facebook is a free social networking service, while Apple sells premium hardware such as iPhones and iPads for an average price of $600-$700. Facebook makes money by collecting users’ data to get more advertising revenue, while Apple collects very little data of its users, and it doesn’t sell user information for advertising revenue.
Most of the free online services also depend on Facebook-like business model to survive. Google, Twitter, Pinterest, Instagram, YouTube and other services also collect user data for targeted advertising. Recently, Twitter announced that it will collect the information on installed applications on its users’ phones for targeted advertising as well as users/content.