Why Facebook's Terms of Service Change is Much Ado About Nothing

By Mark Sigal
February 18, 2009 | Comments: 4

peace-sign.jpgFirst came organic growth (via universities). Then came integrated growth (via an open network, open platform play).

Next comes perpetual and predictable social utility services, and that assumes homesteading more of your online data.

This includes things like your social connections, your conversational threads and any social media content shared in the public cloud.

Looked at with intellectual honesty, you would have to agree that there is a big "snail trail" that you create when you participate in social networks that is natively (naturally) interlinked with Topics and Users.

If you quit The Community, it just isn't reasonable to assume that the substrate that you have created and all of the interconnects (jointly forged with others) should magically disappear.

To build contexts, share content and create conversational ties, you need a sense of permanence and co-creation "skin in the game."

No less, you want a thriving market of developers committed to bettering your information aggregation, information filtration, player and playback experience.

If in doubt, let me present "Exhibit A," the iPhone 2.0 Platform.

From where I sit (based on experience with iPhone/iPod touch), the more integrated the better, but Facebook has also shown that they understand the importance of robust customization controls, especially where matters of personal privacy are concerned, so I would give them the benefit of the doubt that they understand the big picture.

The Reason for the Heartburn

So what is the big hullabaloo REALLY about? I would argue that the dog of this is a level of unease with the power and prominence that Facebook finds itself holding.

Facebook has made some past missteps, and at times, they can come off as immature and maybe a bit insular in terms of how they present major initiatives fully formed (with seemingly limited user feedback).

At the same time, they've earned whatever place they hold in our hearts by delivering material utility that doesn't have an obvious ceiling or "gotcha" (i.e., they maintain a healthy balance between predictability, customize-ability and extend-ability, without sacrificing stability).

Thus, you have to trust that Facebook's goal isn't to rip you off or sell your data to the lowest bidder, or you shouldn't participate. Go where you feel you can better trust.

That said, this should be a fixable wake-up call for Facebook that they need to better establish a better bond with their community. Simply pledge to be open, honest and earnestly engaged.

One final comment. If we are truly honest with ourselves, the real tail of the Facebook TOS dog is that at least part of it was a knee-jerk "human greed" response.

In the abstract, we feel that this is our content. We created that picture, right?

If there's money to be made by Facebook off of those great baby pics, we should get a few shekels for our contribution.

My take? You just have to get over the fact that when you plug your ingredients into community soup, not only is much of this (but not all) a one-way trip, but you are receiving ample consideration for the contribution.

That isn't even remotely the same as saying that you are giving away any of your rights to the picture, any more than when Google indexes the images on your web pages. You still own the underlying web site and content, but Google gets to monetize those snail trails and make them searchable for eternity.

We don't begrudge Google that (not yet, at least). We don't begrudge Apple for turning mobile devices into instant teller machines.

Facebook is enabling us to create and cultivate an endless supply of intelligently linked snail trails. Why begrudge them for that?

Epilogue: The story ends happily. Recognizing that perception is reality, Facebook smartly rolls back to the earlier TOS until they figure out how to better explain "Why Now?"

Editorial comment: We are scared of the shadows.

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I've written on social networks extensively in the past, most recently here on O'Reilly (Investing and the Social Networking Lifecycle). Facebook is right on schedule. At some point after the service hits the big time, the cost of maintaining what amounts to a free service catches up with the SN. They look for ways of monetizing their assets, and inevitably someone in accounting comes up with the realization that "hey, maybe if we laid claim to all of the resources that people have been uploading (be it pictures, avatar information or what have you), then we can sell them."

Up until this time, most of the migration comes from the earliest adopters, who've discovered that their quiet little secret beach has now been invaded by millions of others. Once the threat of monetizing personal content comes up, however, the second, much larger wave of migration occurs.

From this point on, Facebook has entered its senescence. It may take three or four years for it to be really noticeable, but it is now entering the next stage in its development, where people are being replaced by pseudopeople (i.e., bots) and people's avatars begin to grow stale.

Hi Kurt,

That is certainly a plausible scenario, and the history of social networking suggests these things are like popular restaurants/bars.

The crowd migrates once things get to being too established.

That said, I don't think that that is the case with Facebook. I think that we are moving from teen wonderlust to settling down years in social networking, and to the extent that FB is responsive to needs of community, maintains balance between predictibility of functions, customizability and extendability via their platform play, they will be okay.

I just don't believe that this is nets out to entropy.



Keep in mind that Yahoo and AOL, which were both once "hot" commodities, are still around, albeit by the skin of their teeth. I see social networks as having the same dynamic as star formation (and for many of the same reasons). I see FaceBook as being a white/yellow class M star about 10-11 billion years in its life-cycle. It's reached stability, and will probably be around for a while longer.

However, internally there's a build up of helium and heavier elements in the core that has been accumulating, but until recently has generally not been involved in the fusion process. The announcement (and subsequent backing off) of taking control of community property is analogous to a star's core temps/pressures reaching a point where helium is now beginning to fuse to lithium. They are spending money providing the service than their making, and this is reducing the energy (money) to continue to provide services in the same way.

The sun's probably already started this process, but at this stage its still contained - the pressures involved are keeping the fusing helium locked up in the core. However, the sun is now in a process of slow expansion that will peak in another three billion years as gravity loses ground against internal radiative pressures (financial losses).

Indeed, its likely that FaceBook will continue to increase in popularity and usage for some time, just saying that the seeds of entropy are already there. I'd also say that the current credit crisis will have an effect here, because FaceBook will have a harder time keeping afloat financially than it would have had even a year ago.

Hi Kurt,

I think we view FB's position differently, and we probably read the tea leaves on AOL and Yahoo moral of the story differently.

In the case of FB, it is entirely possible that things play out as you suggest but my guess based on watching FB's moves is that they have a healthy dose of vision, enough arrogance to think that they can pull it off, enough pragmatism to course correct when they screw up, and they seem plugged into users and user experience.

In case of AOL, they forgot their core (paying subscribers) and failed to keep innovating as the web took hold. To be fair, when you get addicted to frothy ad markets and when you are in the middle of the internet bubble reality distortion can happen but once things got off track, they never course corrected.

In case of Yahoo, they never integrated their services such that a typical user who uses 2-5 services from Yahoo has a better experience than those who use one. Plus, they developed extreme Google envy, and did what at lot of big companies do; gravitate between defensive protect the core strategies and gee whiz bang innovations that seem cool but never fit in with a larger plan. If they stuck to: "we are an integrated media company, and we want to deliver the best, most integrated user experience, one that rewards loyalty" it might have been a different story.

The hard part is that alot of companies lose their core, lose the innovation DNA and become silo'd.

Will that happen to FB? Maybe but they have a lot of runway to grow, I believe.



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