Facebook's Anti-Google Fiasco

[Commentary] At the end of the day, the Facebook-Google dispute is about advertising dollars more than about privacy.

Google wants a piece of Facebook's $2 billion in annual advertising revenues, hoping to build a similar social media network to boost its $29 billion in annual revenues. The dispute is also a reminder that free services such as Facebook and Google come with a price. Consumers need to keep a truism in mind: If you're not paying for the product, then you're not the customer -- you're the product being sold. Social media services such as Facebook take advantage of data that consumers disclose about themselves to enable advertisers to deliver ever more targeted marketing to them. The benefits of social media are redefining people's expectation of privacy. The trade-offs of privacy versus communication are fluid and change faster than regulators can keep up. That's why it would be a mistake for Congress to pass any of the proposed new laws setting privacy expectations into stone. Silicon Valley companies should resist as long as they can the regulatory capture that deadened innovation in industries from steel to autos. Lobbying for regulation instead of competing for consumers is a sign of an industry in decline. If Silicon Valley firms open the way for Washington to settle the competition among them, they shouldn't be surprised if politicians are only too happy to oblige.