Image via CrunchBaseThe whole Facebook privacy thing reveals a large strategic problem Facebook has created for itself.
It has become popular precisely because people feel they can trust in the control over the level of sharing they have - and the limitations on what each individual regards as 'going public'. For most Facebook users going public means sharing with friends. And for most Facebook users friends mean friends (which is why the vast majority don't have hundreds).
It's structurally a collection of hard-edged networks - silos - self-limiting communities rather than the adhoc, fuzzy-edged self-forming communities of the kind that Twitter (and the blogosphere for that matter) enjoys. It was built for privacy - so the hard-edges are a natural outcome.
I have written about the risk Facebook has built into its model, previously: Hoarding Data Can Seriously Damage Your Wealth and How Twitter is Going to Beat Facebook
I think the guys at Facebook understand this problem more and more as they scale. And I think that's why they keep introducing the Twitter-like conversation elements. But it's also why they keep pushing what they can get away with on privacy.
While I do believe in the longer term our notions of private/public will shift over time, that's not what the vast majority of their 500m (that's a guess) users have signed up for. So when what they, very seriously, regard as their private data starts getting used for FB's own purposes - serving unwelcome ads, for example - things kick off.
The guts of the problem, it seems to me, is that Facebook is developing business models as if it's a media owner. ie we've got all this great content - let's sell ads on it. Let's flog wasteful, ineffective ads on it (remember kids, click-thru rates are somewhere down round your ankles, even in uber-targeted Facebook-land).
But Facebook isn't a media owner. All the media on it is yours. You made and shared it. It's yours not theirs.
Facebook is an enabling platform. Indeed it has the potential to be a collection of any number of enabling platforms. And if it could only start believing that (Zuckerberg and co must know it) then it could start to earn a crust in an appropriate way.
When it recognises that it'll spot its business model. And it sure as hell ain't ads.
It's much closer to this kind of thing...
And only Facebook has the data through which it could find people who care about the same stuff across all the friend-to-friend silos, and reach out to them to bring them together to surface the wikifixes for products and surfaces the brands need. No one else could do this.
That's quite some competitive advantage.