Facebook and Privacy

Since it’s the thing to discuss Facebook and their Privacy issues, let’s.

It’s been discussed to death why unilaterally setting an individual’s privacy settings to ‘Public’ is bad.  It is potentially illegal (depending on which country you are in and your policies); it removes a customer’s choice and most importantly, it annoys your customers.

Since that’s been done, let’s talk a bit more about the marketing implications about Facebook’s current strategy. And let’s be clear here – consistent, repeated actions such as this constitute a strategy.  Even if it is a bad strategy.

Social network sites are built and succeed due to two major factors:

  • their technology
  • a critical mass of individuals

Right now, Facebook holds the edge on technology, but barely.  It won’t take long for some site (whether it’s a new upcomer or heck, even Google) to build a platform that is just as good if not better.  Technological advantages as a strategy is very, very difficult to upkeep and very expensive.

The more dangerous for Facebook’s long-term survival is that of critical mass.  Once a viable alternative appears, if the level of ‘pain’ experienced by customers on Facebook is sufficient, they will begin to migrate.   Critical mass works both ways – if Facebook loses a sufficient number of customers, the drop will become exponential.

It’s worth noting as well that Facebook is still not profitable.  As such, if the investors decide that Facebook’s current policies are affecting them badly enough, there just might be a slight revolt.  Whether it’s a withdrawal of capital (i.e. cutting losses) or a coup.

Overall, if you own or run a company that collects private information; it’s nearly always better to keep your customers happy.  Build and keep their trust, and that will allow you to build your business.

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