Naivete and cynicism are not mutually exclusive. "If you're not paying, you're not the customer, you're the product," is a wonderful example of naive cynicism. It imagines that the only participants in a business transaction with full human agency are buyers and sellers; and that if you are neither buyer nor seller, well, the seller and buyer must view you as the not-quite-human product! This meme explains nothing, and reflects a completely broken view of Facebook's business goals. Its cynicism makes it no less naive.
Suppose, for the sake of discussion, that Facebook were a perfectly mercenary, ruthless organization, straight out of HN's collective imagination: it cares nothing about the people using its software, and eats, sleeps, and breathes nothing but monetization. (This view is itself another instance of naive cynicism, but let's grant it to get on with things.) Facebook is still critically reliant on non-paying users continuing to use it; without them, no possible road to monetization exists. Those users are a party to the transaction; they come willingly, and Facebook has no army to compel them to come again tomorrow. Viewing users as inanimate "product" that can be manufactured and sold would be stupid; the "product" is not something that Facebook produced, bought, manufactured, or otherwise has any proprietary claim over.
This relationship is actually pretty close to the relationship that print media have to their readers; your subscription pays for approximately 0% of their revenue; advertisers make newspapers and magazines work. It's also close to broadcast television, where you literally contribute no money to the revenue of the businesses producing programming. It doesn't follow that television studios should view you as inanimate "product"; indeed, television studios work very hard to produce something that real people enjoy, because without those people freely choosing to watch they are out of business.
A much more sensible aphorism would be: "If you're not paying, you're not the customer, you're the audience." This has greater explanatory power, for the behavior of free web service, advertisers, and the audience, which is a willing party to this entire transaction, as the "product" soundbite obscures.
Wouldn't it be refreshing if Zuck started talkin about all of us as simply 'the product'? I think there's something to this whole removing abstractions stuff.
