Facebook's Problem isn't Privacy, It's Lack of Initiative

All the fuss about privacy is distracting us from the more important issue: Facebook has broken the social contract to turn our freely given data into something more valuable.

heads up: this is a pretty old post, it may be outdated.

The privacy débâcle is distracting us from the real problem: Facebook is dead in the water.

Privacy is too minor an issue to justify its complexity. As long as Facebook continues to make privacy hard to understand, and invisible to the user the issue will remain relegated only to users who are in-the-know. The latest round of privacy changes effectively obfuscated privacy settings, while encouraging users to pump even more data into Facebook (more ↓). Facebook's reaction to privacy concerns has been a long-term PR strategy. The announced incremental progress toward a solution, which are out just minor feature additions that don't address any of the real issues.

Zuckerberg’s challenges to conventional thinking about online privacy have become so predictable, it’s starting to resemble Moore’s Law.

Fred Vogelstein (via Wired)

It's sneaky and underhanded and leaves a slimy feeling, but if us users are too stupid to appreciate that writing could easily become evidence, or too appreciative of Facebook's amazing and free features to care about the esoteric privacy issues, or smart enough to granularly control all our content we'll stick with Facebook until something better comes along.

Facebook has two problems: privacy concerns leading to a lack of trust, and product development (what to do with all the user data they're collecting). It's the lack of product innovation that is Facebook's huge problem. Despite all hype about F8, and the ensuing privacy backlash, we all missed the greater story: there's nothing new.

All the things Facebook doesn't do

That "like" button everyone is raving about? It's just a more powerful share button – the kind that we've had for years. The semantic data they attach? Half of it duplicates current functionality, and half of it ignores existing standards (Google's take on Open Graph). The move toward a more public facebook makes it a Twitter clone, and their attempt to control online identity is muddled by all the privacy issues.

I say this not to bitch that Zuckerberg is immoral, but to point out: Facebook is lost. They don't know where to go next.

Facebook Growth 2010
Facebook's growth. Look at that J curve.

In something short of five years, Facebook has exploded with 500 million users, the world's largest photo repository, highest site engagement ever, and its reach to 35% of the Internet. Facebook's most valuable property is undoubtedly its user base – the network effect is difficult to replicate, and will continue to lend Facebook its value for a long time to come.

But we users are fickle. We only came to Facebook because it had better technology than MySpace [Zuckerberg's "elegant organization"], which itself had only become popular because it had better tech than Friendster [MySpace page design, music], which had better tech than Geocities [Friendster had a social graph].

Facebook's great leap forward was "elegant organization" – Zuckerberg's principle that boils down to clean design, and has become a standard. Other technology Facebook has built?

  • A website that can handle the quantity of traffic is impressive but repeatable.
  • The software platform doesn't appear to be that unique – we see Facebook clones all the time.
  • Facebook's plan seems to be a take over of the web with like buttons has been done before – including by Facebook itself.
  • In a continuation of the stagnated advertising industry, Facebook's 'revolutionary' ad platform only serves ads with the most basic of demographic targeting
  • The most valuable piece of technology Facebook appears to have built is their EdgeRank algorithm which does a shockingly good job of automatic curation.

So, Facebook has two problems: privacy complaints – a PR issue that they can shrug off as long as it remains complex, and product stagnation. Facebook has the user-base of Microsoft (roughly) with the data of Google (probably).

What impressive technology have they built to leverage this huge power base? Just EdgeRank.

What we have, is a failure to analyze

With access to nearly 7% of the world's human population, and one in five people who access the internet using Facebook there is a lot of very significant data that they could be drawing on – and aren't.

By way of example:

amazon google netflix
Amazon leverages their user base to make recommendations to you, most of which are scarily accurate. Google is astoundingly good at using their collection of user data to guess what you intend. NetFlix paid a million dollars just to improve their recommendation algorithm by 10%.

These are companies that care deeply about data.

Look to the search functionality of each of those sites as further proof. Google, Amazon, and NetFlix all have an astounding search results. Meanwhile, Facebook shows a complete lack of appreciation for the wealth of data they've collected.

Facebook's clear disregard for user privacy, data, creative advertising and poor search capabilities are symptoms of a disease:** they don't appreciate data.**

Instead of using their F8 conference as a chance to reveal all the clever ways Facebook – and third parties – could leverage the truly massive quantities of data that Facebook is collecting, they opted to ask us to further lock ourselves into their system by giving them even more data.

It's like a fat kid in a candy shop who doesn't stop to taste, much less digest, the treats (our data) his parents are paying for (we're giving to Facebook).

When we feed Google's data machine we're rewarded. Clicking on the right search result gets us better results. Suffer through bad voice recognition on GOOG-411 and we get excellent speach-text capabilities on Android Phones. When we buy things on Amazon, it determines what else we're liable to like and produces recommendations. Open Source software takes the most popular features and builds them into the next release. Many national governments are opening data repository sites.

The social contract has been established

We, the users, will feed your site data. In return, we expect data of exponentially greater value fed back to us.

“People are a lot more willing to give away a lot of stuff as long as it results in some benefits that they value.”

Stephen J. Hoch, Prof. at University of Pennsylvania (via The New York Times)

Facebook breaks this contract. Give Facebook your photos, your invite list, your secret communications and what do you get back? "Elegant organization."

That clean design is a nice starting point – but it's only a beginning. Facebook's greatest accomplishment it providing a central repository for the social graph. That is a great leap forward, but unfortunately, Facebook stops there. Simply listing the social graph really isn't enough of an accomplishment.

Google elegantly organized our web search – and then it started datamining. Amazon elegantly organized our shopping, and then it started datamining. NetFlix elegantly organized our movies, and then it started datamining.

Facebook's sole attempt at datamining has been the newsfeed (driven by EdgeRank). A somewhat useful, mystical, piece of technology that has to criteria for success. (Think: do you really know if your "Top News" is showing you the best stuff?)

What Facebook could do

Frustratingly, Facebook's opportunity is nearly endless. Knowing the identity of our friends, and their friends, and what everyone is interested in, should enable a recommendation system based not just on advertising but entertainment, politics, jobs, and product reviews.

For instance: Facebook's Events product is a feature-poor copy of evite – lets turn it into a Yelp killer.

Facebook got push back when they invented blippy years too soon (it was called beacon). What they should have done, is realized that we don't want private information like what we've bought shared — but there is public information that can be elegantly organized.

What if Facebook "magically knew" where we had been? Facebook has the world's largest photo sharing site – which has location tagging. Facebook doesn't even need to look at our geo-tagged photos, event locations, or status updates to figure out where we've been. But, if it did, Facebook could take the data and combine it into their events product.

With the knowledge of places my social graph have been, the new Yelp Facebook Events offer places to go for dinner, vacation spots, or the best bars. Facebook could even steal a page from Groupon and offer discounts to the best places. Facebook can solve Yelp's biggest problem — Identity — and revolutionize the e-vite/group buying spaces all at the same time.

Too bad.

It's not worth deleting my Facebook account – I still find the product useful. But, I'm happy to jump ship to the first site that provides value beyond simply listing my social graph.

FWIW, I'm horribly disappointed with my ability to articulate my argument in this post, but I felt it was time to publish and be done.