MediaFile

Facebook’s billion: Are you being served?

Facebook has reached an almost unimaginable milestone: 1 billion people are active users. It is hard to get your head around that number, which represents one-seventh of the world’s population (and not every one of us even has Internet access). It’s almost half the total number of people estimated to be on the Web at the beginning of this year.

Even CEO Mark Zuckerberg can’t quite seem to comprehend it: “It’s really humbling to get a billion people to do anything.”

But despite gangbuster growth, Facebook is based on a tricky business model: The more they use members’ shared information to target them for advertisers and marketers, the less members are likely to go along, and the more they’ll realize the bargain they’ve struck. Just as Facebook effectively redefined “Friend,” it is pushing the boundaries of the public-private divide.

So it’s a fine line they have to walk, promising granular, voluminous, robust member data that has real value in the marketplace, while reassuring members there’s nothing to worry about.

Facebook does the latter primarily by not drawing attention to the issue at all. It has over the years changed things in ways that consistently favor increased sharing, putting the onus on members to opt out. Tech writers scream bloody murder, and yet (shockingly!) membership still rises.

Facebook needs a new CEO

Facebook has now gone through its first trial by fire as a public company, slightly exceeding revenue expectations (with $1.18 billion) but showing a big loss in its first reported quarter ($157 million). Facebook shares were pummeled in after-hours trading; the company’s market cap has been slashed in half in just 10 weeks.

This is a bad, bad situation for Facebook’s early shareholders, 97% of whom are individual, retail investors – unlike those at the other big tech titans, which are majority-held by institutions: Google (68%) and Apple (67%). That Facebook’s percentage is so high suggests that Facebook is a stock for the masses. The masses need a hero.

That hero is not Mark Zuckerberg. He needs to get out of the way – not because we can judge him a disaster based on a single’s earnings period, but because he isn’t playing to his strength. He’s letting down the average folks who saw something shiny and new, but are now seeing shades of overhyped tech redux.

Protecting Twitter from its own hubris

Twitter created a bit of a stir late last week by cutting off LinkedIn. Ostensibly this was to project a consistent look and feel for tweets as the company adds features like threaded conversations, which LinkedIn didn’t convey. People who have accounts on both services will no longer have their tweets appear on their LinkedIn profile pages. It’s hard to know how much these updates will be missed on the business-minded network, which distinguishes itself by hosting a more focused conversation than “anything goes” Twitter. But the practical effect is that if you want to be heard in both places you’ll have to repeat yourself, unless you choose to do all your updates from LinkedIn, which still feeds one way to Twitter. More likely, you won’t because it’s too much of a bother.

Bad for LinkedIn. Much worse for Twitter.

Twitter’s ability to pipe in to other networks is a big reason for its popularity, and in doing so it has aggrandized other networks. All this has been, to the outside observer, symbiotic: People like to share their tweets everywhere they hang out; networks benefit from all that chatter and Twitter gets its hooks into everything.

In cutting off LinkedIn, Twitter doesn’t seem to be adopting the “first taste is free” business model it has previously practiced. That’s what creates addicts who can then be charged through the nose. Now Twitter seems to be calculating that isolationism is a shrewd business strategy, that it has less to lose by pulling back on sharing agreements than the networks it drops.

Betwixt and between: Facebook’s act of desperation

On Monday, the Wall Street Journal reported that Facebook is considering lowering the minimum membership age to include tweens. It raised eyebrows and kindled a new discussion about privacy and the propriety of inviting youngsters into what the company aspires to make the world’s biggest salesroom.

But I have a different concern: Soliciting children would be pretty strong evidence that Facebook needs a big boost to its already staggering 900 million membership to justify its valuation and business model. Having courted every early, middle and late adopter possible, there isn’t much low-hanging fruit for Facebook anymore. But courting tweens would inevitably invite scrutiny and regulation, since the prospect of cyberstalking is even more toxic that cyberbullying.

In other words, the potential rule change looks like an act of desperation. Coming off a miserable stock market debut, both the merits and atmospherics of this notion are decidedly bad.

Older and bigger, Facebook rethinks a youthful flirtation with user democracy

With about 900 million people, Facebook is larger than all but two countries in the world. But the nation of Facebook’s experiment with direct democracy may be coming to an end after only a few years.

On Friday, Facebook said it will “review” a process that allows users of the online social network to vote for or against changes to its privacy and site governance policies.

The user feedback process was implemented at a time when Facebook a much smaller, privately-held company and may no longer be well-suited to the company’s current situation, Facebook explained  in a blog post.

Facebook’s passive-aggressive friendship

We are witnessing a fascinating changing-of-the-guard moment in tech. The old Internet, represented this week by once-mighty Yahoo, is fumbling with another leadership crisis it must solve before it can even think about restoring some semblance of relevance. The new Internet, Facebook, is ruled by a young man in a hoodie who is on the verge of creating a massive public company that, as was the nascent Yahoo back in the early ’90s, will be an Internet darling longer on potential than track record, but running hard on an open field.

The common thread might seem to be the “If it’s big, it’s gotta be BIG” illusion that got us all in trouble at the turn of the millennium, when Internet investment hysteria equated today’s eyeballs with tomorrow’s profits. But it’s always about the profits, and the people who promise them. This time that person is Mark Zuckerberg, who as the books on the Facebook IPO closed Tuesday, well in advance of Friday’s first trade, seems to have convinced Wall Street that his seven-year-old company could be worth more than $100 billion — the richest-ever launch in Silicon Valley.

When you value your company at 100 times revenues, investors are banking on the belief that Zuckerberg has perfected the unstable compound that is social abandon and advertiser hunger.

Facebook’s Timeline: A catalog of nothing

We have seen the past, and it doesn’t work.

Over the past few weeks, Facebook has been rolling out Timeline, its effort to remake its members’ profile pages into scrapbooks that, like nearly everything published on the social web, is told in a reverse chronology. While redesigns always inspire grumbling, the discontent seems particularly strong this time — 70 percent of users surveyed say they just don’t like it, and Facebook’s own blog page announcing Timeline is filled with complaints in the comments.

At first glance, Timeline looks interesting — a retrospective of an online life. But soon enough, there’s plenty not to like. And the biggest problem isn’t that Facebook scrapped the elegant sparseness of the old profile page for a cluttered interface, or that many users will — yet again — need to reset their privacy settings, or even that, once you switch to Timeline, you can never go back to the old page.

No, the biggest problem with Timeline is that it feels like a mean prank Facebook is playing on its users. It confronts them with the unpleasant reality that the sum total of lives preserved by social media is not just mundane but inauthentic, devoid of what gives meaning to the very thing it’s meant to catalog: life.

from Paul Smalera:

The piracy of online privacy

Online privacy doesn’t exist. It was lost years ago. And not only was it taken, we’ve all already gotten used to it. Loss of privacy is a fundamental tradeoff at the very core of social networking. Our privacy has been taken in service of the social tools we so crave and suddenly cannot live without. If not for the piracy of privacy, Facebook wouldn’t exist. Nor would Twitter. Nor even would Gmail, Foursquare, Groupon, Zynga, etc.

And yet people keep fretting about losing what’s already gone. This week, like most others of the past decade, has brought fresh new outrages for privacy advocates. Google, which a few weeks ago changed its privacy policy to allow the company to share your personal data across as many as 60 of its products, was again castigated this week for the changes. Except this time, the shouts came in the form of a lawsuit. The Electronic Privacy Information Center sued the FTC to compel it to block Google’s changes, saying they violated a privacy agreement Google signed less than a year ago.

Elsewhere, social photography app Path was caught storing users’ entire iPhone address books on their servers and have issued a red-faced apology. (The lesser-known app Hipster committed the same sin and also offered a mea culpa.) And Facebook’s IPO has brought fresh concerns that Mark Zuckerberg will find creative new ways to leverage user data into ever more desirable revenue-generating products.

All about the Benjamins, or How Mark Zuckerberg cemented control of Facebook $100 at a time

One hundred dollars doesn’t go very far these days.

But for Facebook co-founder Mark Zuckerberg, a C-Note was the key to cementing his control over the social networking phenomenon.

As we learned last week when Facebook filed its prospectus for a $5 billion initial public offering, Zuckerberg has the voting rights to shares owned by some of Facebook’s biggest stakeholders, including venture capital firm Accel Partners, Digital Sky Technologies and former Facebook President Sean Parker.

In an amended filing on Wednesday, Facebook provided a little more color about the agreements that contributed to Zuck’s controversial control of 57 percent of the company’s voting shares.

Facebook is starting to lose its touch

By Kevin Kelleher
The opinions expressed are his own.

Facebook is steamrolling forward. It now boasts 800 million active users. The company is reportedly preparting for an initial public offering. It’s laying plans to sell a Facebook phone, strengthening its presence on the mobile web. But Facebook’s plans may be hampered by a new backlash against the company’s efforts to get its users to share more of their lives online.

In September, Facebook announced at its annual f8 developers conference that it was upgrading its Open Graph technology. Facebook CEO Mark Zuckerberg introduced Open Graph in 2010 to let web sites and apps share information about users with Facebook. The revamped Open Graph takes sharing to a new level, allowing apps that automatically share what articles users are reading or what music they’re listening to.

Zuckerberg said the new feature would allow “frictionless experiences” and “real-time serendipity.” At the time, only a few observers found them to be scary. “They are seeking out information to report about you,” wrote developer and blogger Dave Winer. But suddenly, a critical mass of critics are speaking up about the changes, how they affect users and publishers alike.