Facebook/Zuckerberg's Greed, Violating Trust, and the coming Privacy Crisis

Greed. Excessive greed. It seems to be the systemic problem of the times, whether it's bandits like Bernie Madoff and Alan Stanford (the latest massive financial fraud), or Internet companies like Mark Zuckerberg's Facebook, or any business for that matter. And it usually happens when things start going really well... executives get over confident and forget about one of the most important relationships in business: Trust. Trust isn't something you can make up by doing business in greater volumes. Just because business is going well doesn't mean customers, partners and employees don't have a choice and will just have to "deal with it". And just because a business has leverage over their constituents doesn't mean greedy decisions don't have consequences... they do. Whether we chose to recognize it or not, trust is a dimension present in every relationship, and when we chose to violate it at the expense of our relationships with our stakeholders, there are consequences.

Zuckerberg/Facebook failed on two counts. First, Facebook changed the user agreement, which previously stated Facebook didn't have rights to user's contents, to granting themselves (Facebook) broad sweeping rights to users content, even after they've left Facebook. Secondly, they "snuck" in the change to the agreement resulting in Facebook being "outted", rather than Facebook being up front with users about the change. Of course Facebook can do whatever they want to with their user agreement. It's their service and their agreement. But that doesn't mean Facebook should and this situation demonstrates exactly why.

The irony of this situation is attention about the Facebook issue was greatly amplified through the social networking services themselves (Facebook, Twitter, blogging, etc.). I personally learned about the news from a very healthy discussion (and a lot of outrage) by the users I follow and talk with on Twitter. That amplified outrage resulted in Facebook announcing they would do an about-face (pun intended) and go back to their old policy.

I believe we risk a coming "privacy crisis" in social media and online services just like we're dealing with the credit and financial problems of today. We share massive amounts of personal information, which in many ways is the fuel, or value, for users of social networking sites. The community built by social networking services is certainly a big part of their value too, but underpinning all of this is a very strong element of trust. Violate that and it's extremely easy for users to turn away or stop sharing their personal information.

Users share a lot more personal information than they should, largely because the damages from doing so haven't yet crossed the "it's not worth risking it" threshold. But you know it can and probably will happen. It may happen because of a very visible identity theft situation or could happen by a company violating users' trust, as Facebook did in this case.

When users lose their trust in a social networking site like Facebook, or any other for that matter, those businesses could face some serious business consequences, given their business is built upon the private and personal information shared by users. The result will be diminished business, loss of users, or a possible shutdown all together. A real tragedy would be a company doing it to themselves as Facebook has the potential of doing in this situation.

I'm not saying or predicting this is the demise of Facebook, far from it. This is only one incident in Facebook's relationship with users and could (should) serve as a warning sign for all social networking and media sites about the importance of trust with users. Let's hope we all learn some good lessons from Facebook's situation and work to make social media a phenomena that's with us for a long time to come. 

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