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How Facebook Betrayed Users and Undermined Online Privacy

Facebook has collected loads of private information about their users -- information that is being sold to marketers.

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Way Forward

Privacy is on the front burner for a reason: social network providers are eager to have the income from marketers and advertisers that help them sell their products in the most efficient way possible. This means that the data users are so eager to keep private has value. The Faustian bargain people make with social networks—your personal information for a platform to share it on—has been changing. Facebook and other networks are collecting far more information about their users than ever before.

That information, and aggregated versions of it, can and is being sold to marketers one way or another. Once you share your data on a network—even with your friends—you cease to own it. The social networks are scrambling to provide clever “products” and ways for you to input more and more personal information on their servers. In the scale of what they are collecting, the benefit to users who have given up most of their privacy is negligible.

Why should users give Facebook their information, preferences, relationship flow chart, and the ability to infer what it isn’t told directly? Users have almost no control over how information about them is used, or who ends up with the rights to use it in the future. But imagine how much users would share if they were building for themselves an income stream with their data. Imagine if Facebook revolutionized the industry and partnered with users to monetize their personal information, and in so doing the users took a share of it.

Trust is crucial for the sustained success of social networks. It may seem to Zuckerberg that Facebook users are tolerating the erosion of it well and keeping their accounts. But as soon as a viable alternative begins to pick up momentum, a mass exodus could ensue. Facebook could easily and quickly become the new MySpace. First, the early adopters achieve a critical mass at another new networking site. Then, the next wave of the techno savvy looking to bail start to migrate. And a little while later, only mom and dad are left on Facebook wondering where the kids went.

Viable alternatives are already springing up. A new network has been touted in the media that allows users to fully control the information they share by setting up their own personal servers, called “seeds.” Raphael Sofaer, co-founder of Diaspora, says that centralized networks like Facebook are not necessary. “In our real lives, we talk to each other,” he said. “We don’t need to hand our messages to a hub.”

Facebook’s growth curve is so strong that the recent privacy flaps seem not to have affected the numbers, but that can be deceptive. The biggest threat to Facebook is what Augie Ray, senior analyst at Forrester Research, calls “death by a thousand privacy cuts.” Messages about how Facebook has turned on its users and betrayed their trust are flooding the feed, and a new application called PrivacyDefender, a tool that automatically configures your Facebook privacy settings, is doing brisk business. The accumulation of lawmaker concerns, high-profile deleters, organizations raising consumer awareness, and security bugs (such as those found in Yelp) can create growing and important problems for Facebook.

Facebook is working on plans for its one billionth user celebration, projected to take place before the end of 2011. What better way to celebrate than for Facebook to announce a new philosophy for its relationship with its users: one of real partnership and respect. A plan could follow that specified how users will participate financially from the use of their data. Share personal information? No problem. Opt in? No problem. Facebook will be doing things differently, and it will get very different results.

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