There is one thing missing in most of the hype over Facebook’s massive IPO. Everyone knows the company is popular, with 845 million users, and successful, with a potential valuation of $100 billion dollars. (That’s five times the size of Google’s 2004 debut.) But what exactly makes Facebook so valuable?

You. Its users. Or more specifically, its users’ stuff.

In fact, in the modern era, Facebook’s IPO will constitute one of the largest voluntary transfers of property from a large group of people to a corporation.

And “voluntary” is a pretty charitable gloss. Studies show many Facebook users have no idea that they clicked away their rights to photos and information by acquiescing to the company’s “terms of use” policy. After all, who has time to read 3,960 words?

If you read them, though, you learn that all content which users previously owned as intellectual property, like photos and videos, is granted to Facebook under a “a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license.” That means Facebook can do whatever it wants with the material.

This is a truly galling power for a service provider—like an e-mail company asserting copyright over every piece of writing sent through the system.

There is no way to take your intellectual property back from Facebook, either. If users cancel their accounts, Facebook retains the same license for all content that “has been shared with others.” Since everything posted is shared, the company essentially retains everything ever posted on the site.

It’s a pretty one-sided arrangement, which makes it all the more remarkable that Facebook has still convinced most users and observers that it offers a “free” service. No, the company does not technically charge a daily fee. Paywalls and micropayments are for newspapers. Billionaires think bigger. Facebook collects its fees in the far more valuable commodity of personal data.

It is hard to measure how much of Facebook’s value is derived by harvesting its user base. To be fair, most of its revenues today are from advertising, which is downright old fashioned. Some of the ads are personally targeted; others would presumably sell on any popular website. Another 15 percent of the company’s revenue comes from financial payments for gaming and virtual items, which have nothing to do with raiding your photo albums.

But Facebook’s true value is about predicting, not counting. As many stock analysts have noted, today’s annual revenues of $3 billion do not come close to justifying the company’s valuation. The big money, down the road, will have to come from more aggressively monetizing the Facebook experience.

Alexis Madrigal, a technology writer at The Atlantic, projects the company will have to wring $4.39 from each active monthly user to “justify a market capitalization of $100 billion.” How?

He predicts another program to cast Facebook users in ads for products they happen to engage through the site. “I expect to see something like the ill-fated ‘Beacon’ plan resurrected,” Madrigal writes. “It’ll be more subtle this time, but Facebook will get better at showing you products that you and your friends like,” he argues. “You’ll be frictionlessly sharing all your tastes with your friends—and advertisers.”

Sharing is another one of those words whose ordinary meaning melts on Facebook. Like “voluntary.” Or “free.” Or “friend.” Beacon was not about sharing all your tastes, which connotes some choice and parity. The program actually seized users’ purchasing habits to cast them in personalized ads, without notice—let alone those royalties that were signed away upon signing up. It was dialed down after a backlash, but the signal was clear. Facebook users were not a customer base to be served—they were a product to be sold.

The company’s arc—from its heady extraction of users’ property to experimenting with how to hawk it—perfectly demonstrates an old adage about free lunch online. As an anonymous commenter once posted on the MetaFilter website: “If you are not paying for it; you’re not the customer; you’re the product being sold.” In IPO season, the investors may get rich, but the products just get used.

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For more of Ari Melber’s reporting on Facebook, check out this Nation magazine article on the new conception of privacy, “About Facebook,” and this essay on the “Social Network.”