commercial pains at Facebook

05Feb08

Facebook has recently faced the problem many social networks and online community sites have approached once they pick up enough revenue from display advertising to start to think about how the business will achieve serious commercial returns.

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The introduction of the Beacon advertising system on Facebook in January was meant to enable advertisers to link Facebook users to relevant content held on external sites.

One of the inherent strengths and flaws with Facebook is that your group of Facebook friends know what you are doing. So when you join, leave or, in the case of Beacon, buy something on a linked site; your preference is broadcast to your social network.

On the personal relationship side, I’ve already been informed by two friends that they broke up with their partners because they removed the ‘in a relationship with’ link from another Facebook member. But now imagine the guilty secrets of your music, movie or fashion taste being broadcast to your social circle.

Beacon was supplied automatically enabled. Meaning you had to disable your transaction information from each partner site manually. Facebook believed that this opt-out clause would be enough to placate the community of service users.
But as Mark Zuckerberg, Facebook founder, wrote on the official Facebook blog “We’ve made lots of mistakes building this feature, but we’ve made even more with how we handled them.”

It appears Facebook were forced into a U-turn with Beacon, partly because so many Facebook users were sending complaints to the Information Commissioner. Malware, software which doesn’t provide an inherently benign service for the consumer, is common on web-sites. But it seems the members of Facebook don’t take too kindly to their social privacy being personalised and commercially exploited to the point where they feel a little exposed.

A second recent criticism of Facebook has been the way the network holds on to your data if you close your account. In effect consumers can’t easily delete their account and personal details from Facebook when they wish to stop using the service.

In one example, service user Alan Burlison discovered Facebook didn’t delete his details when he deactivated his account. He said “It wasn’t until I reached the final screen of the account closure process that I realised they were going to keep my details.”

As Burlison’s blog (blogs.sun.com/alanbur) explains, he complained to Facebook without any effect. So he then involved Channel 4 and the Information Commissioner in the issue. A formal complaint was made by the Commissioner and the story appeared on Channel 4 News.

Alan then mailed a link to the Channel 4 news item to Facebook’s CEO and their Chief Privacy Officer. Miraculously his account was completely closed within 24 hours.

Facebook, from my view, still have the best social network interface. But making money from a free service will of course always raise problems with the consumer. Particularly if the network users invest vast amounts of personal data in the system without expressing their permission for their social world to be exploited or shared commercially with others.

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