Facebook's Online Identity War

It's trying to be the de facto standard for online ID—in ways that are making privacy advocates nervous

By Douglas MacMillan

On the walls of Facebook's Palo Alto (Calif.) headquarters hang multiple prints of René Magritte's painting The Son of Man. The company's execs see the image of a man's face obscured by a green apple as a metaphor for the millions who surf the Web anonymously. "Part of what Facebook is trying to do is help people take the apple away," says Chris Cox, the company's vice-president for product.

Facebook has good reasons to push people to be up front about who they are online. As the world's largest social networking site, it stands to reap a fortune if it can help customize advertising and product pitches to the characteristics of each user. But many people are reluctant to share personal information on the Web. They're particularly concerned about entrusting their identities to companies such as Facebook, which seeks to profit from the information it collects. "Fundamentally, Facebook is a business," says Kaliya Hamlin, co-founder of the Internet Identity Workshop advocacy group. "Their business is about monetizing the people in their network."

Almost any online activity leaves traces of your identity, from a Google (GOOG) search (what you're looking for) to an Amazon.com (AMZN) visit (what you're buying). Yet there's no widely accepted identity standard online—the equivalent of a driver's license or Social Security number. Facebook wants to change that by creating a digital calling card that could be used to identify people pretty much wherever they go on the Web. To help in the effort, in August Facebook hired one of the pioneers of online identification. David Recordon co-founded OpenID Foundation, a nonprofit group that maintains a set of open standards for Web identity. He plans to apply the foundation's principles of openness and transparency to Facebook. Already, the social network lets new users register with their name and password from Google's Gmail service, and Recordon says similar arrangements with other companies are in the works. "Standards are the plumbing layer of the Internet," says the 23-year-old. "For them to be successful they have to be freely shared."

Facebook argues that most services on the Web become more useful when they know something about users. One early example is Facebook Connect, a program that lets users log into their profile and interact with Facebook friends on more than 80,000 Web sites. When people sign in to YouTube (GOOG) with Facebook Connect, the video site highlights clips their friends enjoyed. For President Barack Obama's inauguration, CNN let online viewers use Facebook Connect to chat with others watching the ceremony. Almost 60 million of the social network's 350 million users have signed up for Facebook Connect in the year since it was introduced.

Facebook Connect is also integrated into Web-connected devices, including Apple's (AAPL) iPhone and Microsoft's (MSFT) Xbox gaming console. The technology lets friends play games and catch up with each other while they're away from the PC. Facebook expects that as a greater variety of devices connect to the Net, users will see even more benefit. For example, you may soon be able to get in your car and tell the GPS to direct you to a person, rather than an address. "That kind of disruptive change can apply to a lot of different industries," says Bret Taylor, who works on Facebook Connect.

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