What Facebook's Stumble Can Teach Your Company

Every firm will eventually have a social media strategy and all executives will face some of the same issues Facebook navigates today about who owns what online

By John Sviokla

Posted on The Near Futurist: February 19, 2009 10:57 AM

When you share information on a social site: Who owns the content? Who controls it?

This question at is the core of Facebook's current turmoil around its terms of service. Last week they tried to keep more rights on content for themselves, but a few days later they backed off. Why should your company care? Well, I believe every firm will eventually have a social media strategy—and all executives will face some of the same issues Facebook navigates today.

Of course I have enormous respect for Mark Zuckerberg, its founder, who at the age of 21 turned down about a billion dollars for his rocket-growth company. How many of us would have been able to turn down that sum, at that age? Facebook has over 175,000,000 members—which makes it the 6th largest "country" on the planet, all done in five years. (For a formal theory of why Facebook grew so big, so fast, see Reed's Law on the mathematics of self-forming groups. See David Reed's site, or this business-focused article by my firm, or the Harvard Business Review article on the topic.)

Yet every new social and knowledge technology creates new challenges to common practice and legal frameworks. The printing press birthed copyright. Today, the standard practice by web companies seems to be captured by Google's mantra, "Do No Evil." From the customer's standpoint, this means "Trust Us." A Mark Zuckerberg blog post seems to also say "trust us."

But the firms don't "trust" their user base.

The user agreements we don't read, but do acknowledge, claim many rights to content, rights to remove content, limits on liability, binding arbitration, and unilateral ability to change the user agreement at their will—just to name a few typical clauses.

Given my upbringing as a rapacious capitalist, I feel that firms like Google and Facebook which provide tremendous value for free deserve a lot of leeway. After all, no one is forcing me to use them, and with the crazy state of tort law I am sympathetic to firms that want to don heavy legal armor when dealing with a broad global public with contingent fee-incentivized lawyers at their beck and call. At the same time, these firms are brokering in the audience's attention, social connections, and personal data—and the old notions of expecting people to read the fine print and trust the providing company may work today, but are unstable in the long term. I believe that it is time to begin a new dialog with the broad public—not just the lawyers—and begin a new set of discussions about what is "fair" and "right".

Why is this a hard issue? Well, Facebook is providing a whole new type of medium for social interaction and thereby creating a set of relationships, assets, and capabilities never known before. Moreover, many of the "goods" on the site are co-created with pairs, groups or networks of people—so it is only natural that there is confusion about who owns and controls what. As Zuckerberg points out in another blog entry, if a user forwards an email to a friend, and then the user leaves that mail provider—the copy of the mail on the friend's computer is not deleted. In addition, because computers can store so much, so easily, and for such a long time—we all worry that we might give away some personal information that will haunt us later.

In order to begin the navigation of these tough tradeoffs, I offer four principles:

Principle 1: Allow users to own their content and identity.
Facebook does a great job at espousing this and they have this as a core principle. It is a core tenet by which they build up trust with their users. It needs to be preserved and amplified.