While many of us in the tech world are familiar with Facebook’s business model, there is a common misconception among people that Facebook collects information about you and then sells that information to advertisers. Zuckerberg wants everyone (especially the U.S. Senate) to know that’s not the case, and has laid forth the most simple example to explain it. During his testimony, the Facebook CEO clarified to Senator John Cornyn that Facebook does not sell data. There is a very common misconception that we sell data to advertisers, and we do not sell data to advertisers. What we allow is for advertisers to tell us who they want to reach and then we do the placement. So, if an advertiser comes to us and says, ‘Alright, I’m a ski shop and I want to sell skis to women,’ then we might have some sense because people shared skiing related content or said they were interested in that. They shared whether they’re a woman. And then we can show the ads to the right people without that data ever changing hands and going to the advertiser. That’s a very fundamental part of how our model works and something that is often misunderstood. While, again, this may seem straightforward to many of us, Zuckerberg found himself having to explain more than once that Facebook does not sell data during his Senate testimony.
Source: TechCrunch – Social Mark Zuckerberg: “We do not sell data to advertisers”