Did Facebook make the mistake of assuming their only comparative advantage was their sheer number of users?

The days of you having a different image for your work friends or co-workers and for the other people you know are probably coming to an end pretty quickly… Having two identities for yourself is an example of a lack of integrity.

— Mark Zuckerberg (via)

I believe Facebook would make more money if they allowed more privacy in their system. To me, regardless of whether Facebook’s privacy policy is “good” or not, I think from Facebook’s perspective, they’ve missed a huge opportunity to re-imagine privacy - to their benefit. There was a chance for Facebook to take their customer’s expectations for privacy and turn that into a real opportunity for themselves. To me, the difference between Facebook and Google, both data mining companies, is this: Google creates products built for me and my needs and uses data to pay for it, versus Facebook, who is currently building a product to get my data. I believe Facebook could be in a position to balance both, and do it well. So, let’s take a minute to consider a little informal history of Facebook.

Three or four years ago, Facebook was actually a very private place. In the midst of the internet, a place that at that time was open and flat, Facebook came up. Instead of having any given comment, quip or photo broadcasted to the millions on the internet, these morsels were broadcasted to friends and peers. When you thought about what that experience was like for the users, they believed Facebook was a trusted source for managing their identity and communications with friends. I say trusted, because they knew who they were talking to, they weren’t worried about information escaping this closed system - on a scale that was revolutionary for the internet, Snapfish aside. They had their own space, space where they could collect messages from their friends, and display their photos - they had control over your profile. At this point, users were complaining they didn’t have the customization that Myspace allowed. The other users of this system were students, generally at their own school, and this affected how students created their profile - think, classic Facebook party photos (things you actually probably wouldn’t want to share outside of your friends), versus the resume they might put up on Linkedin. Even when high school students were brought onto Facebook, the dynamic was very similar. Also remember, at this stage, how recruiters began spying on student’s Facebook profiles before hiring them. There was a general outrage over this because it broke the social standards and conception people had about Facebook use.

Then, Facebook got big. When Facebook opened its doors to the world, all of a sudden, it was no longer a place for students. Suddenly, people were not just talking to their peers, they were talking to their family and work colleagues and god knows who else. They had to figure out how to display an identity that can fit for all these different components of their life. The separation between work and play had suddenly been yanked down. Think of the Facebook conundrum of, “Should I friend my boss on Facebook?” Even new users weren’t sure about how to manage this new paradigm, since they’d been privy to a story about Facebook use that centered around their friends and social circle. At the same time, changes in people’s Facebook profiles meant that these were no longer their spaces, but rather a center for information about their actions, statements, and what was said about them. As people lost control over this space, and more action moved to the News Feed, the sense ownership over this space fell quickly.

Now, of course, we have the outcry around Facebook privacy - websites like Openbook driving that, and commentators from the NYT to various personalities crying foul. Facebook didn’t think clearly about the thing that attracted people to their product in the first place, and so not only did they undermine the reason to use their product for many people, but they also destroyed the advantage their brand held in the realm of privacy. I believe that Facebook is trying to create opportunities to make data more “sellable” or “mineable,” and also encourage new areas of conversation on Facebook - instead of discussing who dumped who, but the latest movie or new album release. It’s not a mistake that the second class of items is vastly more sellable than the first. But in their rush to do this, they’ve gone after models they see that work - Twitter being a big and not so subtle influence on Facebook - instead of trying to re-imagine what they could do given their product and the relationship people had with it. And when they do this, they’re implicitly comparing Facebook to Twitter, as if the two services were offering the same thing to customers. But they’re not the same.

It’s clear people are happy to talk to people they don’t know online - they even want to do so. But many people want to have relationships and conversations online that are different, and often protected from their real life identities. Chatroulette, the current iconic leader for talking to strangers online, offers a certain level of privacy - the lack of even a username to track a person down leads to anonymity. And the Internet, from Fake Steve Jobs to Poblano, is littered with mythology of anonymity. Indeed, one of the advantages of anonymity is the flattening effect it has - the Korean nobody who became a leading economic commentator, the 14 year old leading a guild, and the women finding second careers on Etsy who overcome their real world situation to craft new identities online. Not only that, but this diversity is part of what makes the conversation so fantastic. But for this type of exploration, conversation and behavior to take place on Facebook’s turf, there has to be trust in Facebook, trust that multiple identities can be managed from one account, that things won’t go spilling out from one identity to another. This is a huge challenge in terms of experience, interface, and structure, but it’s something I believe Facebook could have tackled head on. It is hard because there is no current model for what this could look like, but that’s also what makes it such a large opportunity.

Moving forward, regardless of whether Facebook’s privacy policy is “right” or “wrong,” or “good” or “bad,” Facebook needs to think about the business case for leaving the policy as is or changing it. Facebook had, at one point, a strong sense of privacy throughout their network. Facebook seems the ideal tool to managing your network of friends, family, peers, colleagues and acquaintances. The thing is, if Facebook leaves more control over what is shown to who, people will use it to share more. And it doesn’t matter whether a person is starkly segmenting their different identities, or if they’re an open book. Facebook can connect that data under one account, and paint a very sellable, mineable picture of it’s users. After all, you can’t read what’s in my email account, but Google definitely “knows” that my Flickr pro account is about to expire, that I run a blog about design, and even about my not-so-secret obsession with Alexander Wang (all very sellable information).