I no longer have a confident feel for whether Facebook’s business model is good or bad. To the good, the user data that Facebook collects and sells to marketers is the best that money can buy, since it allows vendors to assemble profiles that reflect users’ explicit preferences –sometimes, even, their innermost desires. From an ad-man’s standpoint, this is infinitely better than having to guess customers’ likes and dislikes on the basis of which web sites they have visited and links they have clicked on. But will users eventually abandon Facebook as the company’s methods of extracting data become more invasive and insidious?  It’s impossible to say at this point.

Meanwhile, Facebook, Google and Microsoft are developing new business models that will eliminate cookies. Facebook will instead aggressively exploit the detailed information it is already collecting on users in new ways. For their part, Google and Microsoft will track users via unique ID codes that are embedded in each and every personal device: PCs, laptops, tablets and smart phones.  The firms will therefore be able to cut out the middle men who broker consumer data obtained from cookies, and to sell higher-quality consumer data directly to vendors.  This would allow the three firms to stake out dominant positions atop the advertising food-chain.

However, it’s possible users will revolt as they come to feel increasingly exploited, compromised and targeted by all-too-savvy marketing men. And that’s why Facebook’s future is so difficult to handicap. At the very least, the company would seem to be vulnerable to competition from social-network providers who, even if less profitable, are more mindful of privacy issues.

From a purely technical standpoint, Facebook shares appear to have begun a correction that could last for at least a few more weeks. The stock has more than doubled in price since summer, and no matter how sunny the company’s prospects, FB will need to recharge for its next run-up, assuming there is one. On the daily chart (see inset), yesterday’s gyrations created a bearish impulse leg whose implications will become clearer in the days ahead. If the follow-through leg exceeds its D target, that would be the equivalent of the groundhog seeing its shadow, spelling yet more weeks of winter. We shall see. In the meantime, the stock is simply a trade rather than a sale or a buy-and-hold. _______ UPDATE (November 4 10:35 p.m. EST): With yesterday’s dive, the stock breached a 48.71 midpoint support, becoming an odds-on bet to continue down to at least 45.25 (see inset, a new chart). Short it if you’re so inclined, but be ready to buy a turn from at or near the target, since the bounce is likely to be very tradable.