What Your Data Is Really Worth to Facebook: And why you deserve a cut.

• Author: Shapiro, Robert
• Position: TEN MILES SQUARE

Americans who use the internet--85.5 percent of us--have made a tacit bargain with Facebook, Google, MasterCard, Verizon, and most other sites and products we use regularly. We get access to these companies' services, and they get to scoop up, analyze, and sell our personal information. Few people question this setup, perhaps because most of us assume that our data isn't worth much.

But that assumption is wrong.

Earlier this year, my colleague Siddhartha Aneja and I published a deep-dive study into the value of the personal information that every major website sells access to. It's a complicated problem. Much of the value comes from advertising revenue, disclosed in annual reports and SEC filings by public companies. But we also had to determine how much of that ad revenue is derived specifically from the micro-targeting that user data makes possible, as well as how much the companies spent to gather, analyze, and market user profiles. In the end, we calculated that internet companies earned an average of $202 per American internet user in 2018 from personal data. We believe that's a conservative estimate.

The value reflects the extraordinarily varied and detailed data that companies collect. Google collects not only the personal information you reveal when you use its search engine, but also the data that comes from whatever you do when you visit or use any of its dozens of properties--YouTube, Gmail, Google Maps, the Chrome browser, Google Pay--or apps accessed by logging in through Google. Similarly, Facebook gathers all the data crumbs you leave whenever you visit the site itself or use its Messenger service, plus whatever you do on subsidiaries like Instagram and on apps accessed by logging in through Facebook.

Amazon is newer to this business, and unlike Facebook and Google, its basic business model doesn't rely on data-derived profits. But Amazon's public records show that its earnings from user data likely more than doubled between 2016 and 2018. Beyond the major platforms, hundreds of other companies take part in the burgeoning personal data business. Our study also explored the revenues from digital advertising earned by smaller internet services, ranging from Snapchat and Spotify to internet media holding companies such as IAC, which owns Match.com, the Daily Beast, and Investopedia.

For a general sense of the value of people's personal data to these companies, we started with digital advertising revenue. In 2018, Facebook earned...