Companies & Industries

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

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.

Principle 2: Make all "sharing" options default to the most conservative setting.

One of the problems with Facebook is that many of the default options allow extensive sharing of photos, personal behavior, status, and other things you do on the site. Being relatively new to Facebook myself, I changed my marital status to "married"—a few months after I joined the site. I have been hitched to Eileen Marie for 28 years, but I forgot to put that in my profile when I first signed up, and when I casually changed my status, it sent a notice to all my friends that I had become "married." Of course, I received gentle ribbing from a few of my buddies saying things like, "it's about time."

Why do I suggest that firms start conservative on defaults? Well, behavioral economists like Dan Ariely have shown the power of defaults is tremendous. For example, when organ donation on a driver's license is "opt-in" about 10% of people sign up. If it is "opt-out" then over 80% of people become donors. If something as emotionally and socially important as organ donation changes radically by what the default option is, imagine the impact on Facebook. Many of their problems could be avoided if they had more conservative default options.

Principle 3: Create a better infrastructure for anonymity and tracking of content.

Zuckerberg points out that no email service today allows you to track and delete content you sent to someone. Well, that is an entirely solvable technical problem. It is possible to have content that "resides" in a shared area which can be accessed but not copied. So, you can imagine any user having the ability to upload information which is "accessible" but not "copyable." It might take some significant technological investment, but we need such new implementations that allow for communal access to content which is still controlled. Such an implementation would allow the removal of any content that you want to be revocable and removable in the future.

Principle 4: Don't sneak up on the audience.

The simplest and perhaps most obvious thing that they could have done is to engage their audience before they made the change. I believe much of the anger of their audience has to do with the fact that it was "discovered" by The Consumerist—not clearly announced by the company in advance. As people have more and more personal information, and engage their social network within Facebook they need to know that major changes will be discussed with the community at large. This makes for slower managerial decision making, but it is the cost of having such an important social product.

As business leaders we might feel a certain schadenfreude watching the upstart Zuckerberg deal with this set of issues, but remember that all customers are getting more social all the time. We all must create a rapid reaction force to deal with the new instant-mobbing behavior which will follow any emotionally laden missteps, like the change in Facebook's terms of service.

Companies should want to have social media user groups organized passionately around their product or service. Many of these customers will be sharing powerful new information about how to use your product or service, testimonials, even new uses and content. But if you don't get a handle on how to establish a deep understanding of "fairness" you may be blindsided by some future backlash—which will undermine their trust in your firm and your brand.


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