Facebook’s privacy policy shouldn’t be a surprise

Screenshot of Liam's Facebook page

As May proved a very busy month for me, I didn’t get the chance to put fingers to keyboard on the topic of Facebook’s evolving privacy policy in a timely fashion. Still, it is an important topic and one that does require addressing, if for no other reason than the popularity of Facebook as a social networking site.

An Evolving Beast

Facebook started life in 2004 by connecting students at Harvard University. As the popularity of the site grew, it expanded its offerings to university students across the United States. With yet further interest and with added investment, Facebook has grown into the massive entity it is today. Over the course of the years, Facebook has rolled out additional functionality and services to its members – albeit not always in an easy to use or intuitive manner.

Still, as the number of Facebook members grew (with now more than 500+ million users!), the Palo Alto based social media company has looked to expand its services. Group pages, personalized URL’s and fan pages are good examples of Facebook’s efforts to develop commercial value for its members – and profits for Facebook.

As Facebook’s worldwide members cross the half a billion mark, we can be sure that Facebook will continue to explore business opportunities, encouraging members to use its service as a valuable medium for connecting with their own respective customers.

Something for Nothing

A key element of Facebook’s value to its business customers is the ability to deliver demographics on a company’s fans. For smaller businesses, which historically have been unable to collect such detailed market research, Facebook offers the potential to access important insights into its customer base. Yet, in order to deliver those insights, Facebook needs to gather the personal details and interests of its members. Our personal details are what drives the insights feature on Facebook. Without specific information on our gender, age, location and interests, Facebook’s insights would be of significantly less value. Facebook has a commercial stake in making more and more of our private information available to businesses.

It seems obvious then that Facebook would over time, perhaps pressured by investors, come to think of the exchange of our private information as a fair trade for the free usage of Facebook’s functionality — i.e., keeping in touch with family and friends.

Even in this age of internet sharing and free offerings, Facebook cannot really offer its services completely for free. It must find a way to cover the cost of hosting 500+ million users. The age old adage of never getting something for nothing rings true here as well. We get free usage of Facebook and its offerings in exchange for giving away control to some of our private information.

The Privacy Problem

The real issue with Facebook and its documented woes with its privacy policy is that it is not very transparent, or user friendly. Admittedly, not everyone is fussed by this (consider the silent majority of Facebook users who do not complain about it on Facebook or on their own blogs). Yet for the vocal ones who do take umbrage with those policies, I share their concerns, particularly from a customer-service standpoint.

As a business, Facebook relies on its customers to promote it. Existing customers (i.e., members) encouraging friends and family to join Facebook increases the commercial value of the website. The significant changes in Facebook’s privacy policy are off-putting to their most vocal customers. That strikes me as a potentially dangerous policy, especially when Facebook’s own executives don’t embrace their privacy policy in practice. Admittedly, it’s not been disastrous yet, but I wonder what will develop in the near future. Might we see legislative intervention to force Facebook, and other social networking websites, to be more transparent in their offerings?

P.S. If you’re interested, the New York Times has a decent write-up on how to edit your Facebook privacy settings.