If Facebook offers more privacy options, it makes people feel safer sharing their information, and they would likely share more. Example: I want to share information A to group X but not group Y; I am comfortable with (or even have incentive to) revealing interest B to group T but not group U.
Facebook can then perform data mining on the information, it’s inside Facebook’s great wall anyway.
Privacy can hinder those who want to collect data on Facebook only through information visible to them. But not to those who are willing to pay Facebook for the data mining.
Facebook benefits both way.
Photo courtesy: History of Economics Playground
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