For Facebook, it's the best and worst of times.
On one hand, the social networking site now boasts 400 million users, and new data from analytics company ComScore suggests it earned about 176 billion display ad impressions in the first quarter of 2010, good enough to place it ahead of Yahoo and Microsoft. Facebook's newly redesigned site, according to Jefferies and Co. analyst Youssef Squali, offers more opportunities for ads per page; if its subscriber numbers continue to grow, Facebook's CPMs (costs per thousand impressions) could eventually pass those of Microsoft's or Yahoo's sites.
On the other had, though, Facebook now faces something of an uprising from users increasingly concerned about the Website's privacy controls and how their personal information may be used to increase that all-important ad revenue. On May 13, a European group of data protection authorities sent Facebook a letter complaining that alterations to the Website have potentially "changed the default settings on its social networking platform to the detriment of a user." And U.S. lawmakers have been urging the Federal Trade Commission to take action regarding social networking sites' privacy controls.
A YouGov BrandIndex survey found that the "buzz score" for Facebook among users over the age of 35 had dropped from 26.7 to 21.2 in the past few months, indicating a more negative perception of the site for that age group. At the same time, however, "buzz" among 18-to-24-year-olds rose from 32.8 to 44.8. Given the time frame, that negativity among older Facebook users could very well be due to privacy concerns.
"Social networks don't have to be at odds with protecting privacy," said Jeff Chester, executive director of the Center for Digital Democracy. "The problem is when companies like Facebook become obsessed with monetizing every bit of their members' data, and throw caring about privacy out the digital window. A responsible social network can balance generating profits with also protecting privacy."
On May 13, Facebook hosted an internal all-hands meeting, apparently to discuss privacy issues. Simultaneously, the company issued two new security features designed to protect user accounts. Previously, one of Facebook's top executives made comments designed to tamp down users' privacy fears.
"It's clear that despite our efforts, we are not doing a good-enough job [of] communicating the changes that we're making," Elliot Schrage, vice president for public policy at Facebook, wrote May 11 on The New York Times' Bits blog. "Even worse, our extensive efforts to provide users greater control over what and how they share appear to be too confusing for some of our more than 400 million users. That's not acceptable or sustainable."
As part of the solution, Schrage proposed that Facebook users become "fans" of the About Facebook Page and Facebook Site Governance Page, which provide company policy updates. "At the same time, we will work to make our settings easier and simpler," Schrage wrote. "Our desire to innovate and create new opportunities for people to share sometimes conflicts with our goal [of creating] an easy and accessible user experience."
Additionally, Schrage claimed that Facebook cares about users' privacy: "My biggest concern reading these comments has been the incorrect perception that we don't care about user privacy or that we'll sacrifice user privacy in exchange for advertising. That's just not true."
Despite the public-relations press by Facebook executives, however, the irritation felt by many users seems to have continued unabated.
"Facebook protects its users from hackers," one commenter wrote below CNN's "Facebook Launches New Security Feature" article May 14, "but raids each user's information for marketing purposes and, with the recent update, has made user profiles nothing more than a checklist of 'like' pages, groups and activities."
Another commenter asked, "How do you feel about being bombarded with advertising and spam targeted specifically to you based on the info you put on Facebook?"
"You should know that when you add friends, upload content, interact, state preferences, everything you do on Facebook, every action is monitored and recorded for use and sale by Facebook," wrote yet another commenter. "You should know that even when you set your privacy controls to a high level it only affects other users. It doesn't protect your information from Facebook."
As of 2 P.M. EDT on May 14, about 1,518 people had recommended the CNN article on Facebook.