- Illustration by dmitri jackson
200 million members and growing every nanosecond, Facebook has become part of the global lexicon, and the envy of the high tech industry, politicians, and business leaders in only five years. Yet the "social networking" site is still struggling for a real business and revenue-generating model; moreover, it must cater to and retain its fickle, addicted, and/or disenchanted users (and advertisers) while fending off upstart competitors. Presently, the social networking site that CEO Mark Zuckerberg and Chris Hughes co-founded may be their downfall.
To fully grasp the phenomena and many issues surrounding Facebook, you have to follow the money. Start with $65 million: That's the settlement Facebook's co-founders had to pay three of their Harvard classmates in July 2008 for stealing their idea for a site called ConnectU. Add the $200 million cash infusion that Russia-based Digital Sky's partner Alexander Tamas pumped into Facebook last month for a 2% stake in the social networking site, then factor in the $240 million that Microsoft paid for a 1.6% stake in the site in October of 2007, and you will see the numbers simply don't add up.
Hardly two years ago, Facebook was estimated to have a market value of $15 billion, which is why Microsoft paid far more for less of Facebook than the Russian did recently. The buzz is but vapor; Facebook, and social networking for that matter, aren't businesses but, rather, novelties, distractions, and yet another means to mine your personal lives and data to sell to advertisers and other, maybe malicious, entities.
Market analysts now peg Facebook's value at around $10 billion or less, and its CEO has suffered accordingly: At 24 years old, Zuckerberg was the youngest person to ever appear on the vaunted Forbes 400 list of richest Americans, with a personal wealth of $1.5 billion in 2008; now Facebook's CEO is only a millionaire.
Fret not, few question Zuckerberg's tenacity to take advantage of others. And we gladly give him all he needs.
The Novelty, and Neurological
In the past four hours, I have been poked five times, received a Boogie-Down Hug, invited to a Mafia War, snowball fight, bong battle, to take several quizzes (one on my IQ, another to know "what happens when you are in Awesomeland"). I've learned more about my "friends'" mornings than I care to know. No offense, but I don't consider half of the people listed as "friends" of mine on Facebook as true friends.
The thrill of Facebook wears off within weeks. Reconnecting with old friends, exchanging the requisite three total emails to catch-up on where we are and what we've done, suggesting other friends we know or may want to know... The inherent ability to take 200 million users and find connections (definition: social networking) is the biggest breakthrough in civilization since the Roman Empire built roads to connect all of its outposts.
Now, each time I'm on Facebook I feel overwhelmed and rarely informed. Numb, that's the overall feeling of social networking - virtual messages from distant friends, news outlets, marketers, scammers, political strategists and somewhat strangers - that, in the end, amount to very little. Add Twitter and I'm a zombie, and that's the result, as a recent study by the University of Southern California showed.
"In a media culture in which violence and suffering becomes an endless show, be it in fiction or in infotainment, indifference to the vision of human suffering gradually sets in," explained USC sociologist Manuel Castells. In effect, being bombarded by both serious and silly information overwhelms the brain's "moral compass" and forces it to shut down, making us "indifferent to human suffering."
We now have politicians Twittering from Obama's State of the Union, journalists and soldiers sending updates from Iraq and Afghanistan, protestors uploading from Iran and China, online marketers and frauds, and myriad others offering every tidbit about their lives. The brain simply can't handle so much information - it all gets distilled into something less urgent, more manageable - leaving us numb to real events, true tragedies, that friend who is depressed and really needs you to pay them a visit, not poke or invite to a snowball fight.
This is the irony of social networking: Instead of connecting us, social networks allow us to avoid actual interpersonal interaction. Meanwhile, the sheer volume of information being shared has made us less aware of each other, and our brains unable to differentiate between what is important, or more minutiae.
The Distraction, and Data
In addition to a basic loss of empathy, social networking has a hard cost on productivity. And this is another area of that differentiates and divides us from others. A study in 2007 pegged the price at $250 million each day - That's lost productivity in the UK alone, due to Facebook usage at the workplace. Australia loses $4 billion annually.
Yet, in the United States, the focus is not on lost productivity but the potential gains of employees utilizing the tool that is social networking, ideally increasing creativity, teamwork, and overall productivity. Instead of blocking Facebook, YouTube and other sites from corporate networks, American firms are encouraging workers to use them, citing the notion that "a happy worker is a productive worker" and avoiding the backlash of employees who are not allowed access to favorite sites or feeling as if they are being watched.
But they are.
Post 9-11, and especially in the workplace, privacy rights should be assumed to be nonexistent. Americans already know that the Bush Administration worked with AT&T and other major telecommunications companies to track and store every phone call we made. Given the breadth of surveillance - domestic and abroad - by American spy agencies (even California Congresswoman, Jane Harmon, was wiretapped by the Bush Administration), all of our electronic communications and virtual visits (phone, text, email, Facebook, YouTube, YouPorn et al) have been compromised.
Instead of calculating the cost of Facebook on worker productivity, the European Union is now proposing legislation to monitor all Facebook user activity. Citing anti-terrorism efforts, the Intercept Modernisation Programme (IMP) directs all ISPs and sites to store user data from March 2009 to present. As-of-yet an unofficial program, and needing full EU support, IMP continues to monitor all Internet traffic, social networks especially.
The London bombings in 2005 provided the urgency for measures like IMP, with UK Home Office Minister Vernon Coaker reinforcing that the directive doesn't currently cover social networking sites like MySpace, Bebo and Facebook, but should. However far-reaching, invasive, and "unspeakably offensive" (according to privacy rights groups), government programs like IMP are all too easy in today's climate.
"The wet dream for spy agencies," described one NSA contractor (who was interviewed on the condition of anonymity) of Facebook and other social networking sites, adding, "9-11 and the Patriot Act opened the floodgates on data collection. Intuitive and inter-relational, these sites are great for domestic agencies, but rather arcane for our present situation."
If the CIA had a Facebook for terrorists pre-9-11, that 9-11 may have not happened is mere speculation. Today's terrorists are strictly "off the grid" - passing directions and dollars only in person, usually via third parties - and offering unique challenges that our spy agencies are still struggling to fully counter.
"The masses consider social networking Web 2.0; we are using what I would describe as Web 8.9, with live satellite feeds, drones constantly uploading real-time locations and activities. This should be no surprise to anyone," he adds, careful not to tip-off anyone to modern techniques by the assorted agencies, "But our challenges are incredibly complex. Imagine your friends speaking seven different languages and rumors have them on every continent on Earth at any given time. Facebook and other social networking sites pale in comparison to the translation and real-time issues we overcome daily. If you think it's dull reading your friends' daily updates, try watching them entering an outhouse and having to sit and wait."
However dismissive of the current capabilities of the social networking sites we use - as well as the overall effectiveness of our current clandestine methodologies and technologies -spy agencies still have an affinity for social networking sites. Actually, the CIA recently asked for a meeting with Facebook's CEO Zuckerberg, "for insight into how the intelligence community can take advantage of the meme," and a Facebook spokeswoman said that the meeting didn't take place due to scheduling conflicts.
Conflicts - of interest and basic morality - consistently come up regarding Facebook.
The CIA has its own Facebook page; actually it has dozens in different languages, yet fewer friends than most Facebook users. If that doesn't raise concerns, consider the fact that the Pentagon is now Tweeting reports on incidents and battles in Iraq and Afghanistan; "Afghan & coalition forces killed four militants & detained two suspects in a Wardak Province operation targeting an IED-network commander," read the Tweet (followed by a Facebook update) from our Pentagon last month, which is spending $550 million dollars this year on "Public Affairs" and has recruited experienced journalists and new media experts to assist in its efforts.
Deaths and detentions are now mere electronic blips, and our brains unable to differentiate such serious military campaigns, our soldiers in harm's way, or another poke from a distant pal.
Though the Bend Police Department does not have an official Facebook presence, other police departments nationwide and international are monitoring the site, and flashes of their intrusion into social networks have had humorous results. Knowing that the police were watching, underage kids in the UK and America have been posting fake parties, promising kegs and a plethora of drugs. But, when the police arrive - their only clue that an illicit underage kegger was happening coming through Facebook - the kids have delighted in informing the police that it was only a joke. Who's busted now?
Nevertheless, for recruiting, to counter insurgents' propaganda, or to reach the public at large through new outlets, our police, intelligence, and military agencies are deeply embedded in our social networking. And only adding to noise that makes us more numb to critical issues that we should care about, but our brains are too overwhelmed to differentiate between. Add to this the recent flurry of Tweets and Facebook messages during Iran's disputed election - both sides exporting reports and updates every second - and the result is pure noise, with no ability to tell if it's a reformist, government propagandist, or our own intelligence agencies offering the latest "news from the ground."
Narcissi Would Be Proud
Last week, Facebook announced a new service to allow users to create their own URLs branching off the main Facebook.com page. Instead of randomly generated digits, you may now own your own page. Your brand, all you, all the time...
Facebook explained this is an invaluable improvement to the site, to make it easier for users to find their friends, but the ancillary impact is inherent. For, in addition to updating your friends on how you felt while waking, the length of time it took to brush your teeth, what you had for breakfast, any news or organizations you may care about at that moment, Facebook is offering you a broadcasting platform of your own - And much, much, more.
First and foremost are privacy concerns, as my managing editor pointed out: Just a cursory review of a user's Facebook site gives both friends and criminals enough information about daily life to take full advantage. You're going to the store and wanted everyone to know? Great! A burglar now knows to hit your house while you're away. You love chocolate and are wearing that outfit today, the one you just posted as your profile pic? Awesome! I know what you look like, where you're going, and what to offer in order to coax you into my van.
Consider the case of Jill Davis, a friend of mine in Portland. New to the social networking experience, she joined Facebook a few months ago and immediately started getting "friend requests" from a guy named Dave. Thinking she knew him, at least through other friends, Jill added Dave --- And Dave started inundating her with pickup lines and assorted links to porn and other suggestive material. Jill's husband, Mark, didn't appreciate Dave's advances very much, so Dave was un-friended. And then "Chris" started making friend requests, using the same profile picture of Dave. Jill's Facebook experience was tarnished by an imposter, so her total number of friends has since been idled at under 10.
Thanks to Facebook, your friends and others now know you, maybe better than you do, and Facebook will go to any lengths to know you and everyone in your network better. "Lexicon" is one service Facebook created long before offering personalized Facebook URLs; essentially, Lexicon tracks your every statement so Facebook can report back to its advertisers about how you feel about their products. New Coke? Gap? The military campaign in Afghanistan? Facebook is databasing your every statement, post, text, picture, as well as others' reactions - Remember how you can click if you "Like" anything on your friends' pages?
Such "invaluable improvements" to Facebook haven't come without concerns. "Beacon" was launched in November 2007, billed as an "ad service." Within one month, though, a CA security researcher found that Beacon was monitoring users even when logged-off of Facebook. Wherever users went, without their knowledge, Facebook knew, and was reporting all of its millions of users' browsing activities to advertisers and other entities. This is spyware, illegal for most, and Facebook was embarrassed by the uproar and promised to fix Beacon. Last month, however, as I was researching an investigative article for a magazine, I noticed that "Facebook.com" kept flashing in the bottom left corner of my Firefox browser window - Is Beacon still stalking us? Facebook says no, but we can hardly trust them.
Just ask the three Harvard classmates with a cool idea for a social networking site called ConnectU back in 2003, an idea that the co-founders of Facebook stole and became rich. CEO Zuckerberg is the bad-cop among the co-founders of Facebook, with Chris Hughes the angelic good-cop. Defying logic and ignoring the charisma and multicultural grassroots efforts of Barack Obama's campaign staff, the magazine Fast Company ran a cover story about Hughes, with the title: "The Kid Who Made Obama President." Delving into how Hughes was Facebook's front-line man to aid in modifications and support for Obama's outreach efforts via this one site, the article reads more like a love letter than investigative piece.
You will find few cover articles about Hughes' co-founder Zuckerberg, however. The CEO of Facebook is usually too mired in controversy, including the outrage in February of this year from users and privacy groups when Facebook's terms of service seemed to imply that it owned all user content - even after users terminated their accounts. Zuckerberg responded with a blog post, saying that "people own their information and control who they share it with..." Yet the terms of service language did not change for another two months.
Now it begins with "Your privacy is very important to us." Then goes on to say "This IP License ends when you delete your IP content or your account (except to the extent your content has been shared with others, and they have not deleted it)." Basically, you own all of your content - your identity - even after you terminate your membership with Facebook, expect if you share it with others and they have not deleted it. Join a social networking site and create an identity, add pictures, videos and other personal thoughts, but dare not share any of it with your "friends" because, should you quit the site, the information you shared is still out there and part of the bigger Facebook holdings. Thanks, Facebook! Our privacy is obviously very important to you, unless we use your site.
Fear the Backlash
Given plummeting market value, flagging user trust, and no real revenue stream other than selling our information to advertisers - despite being the rage of news outlets, politicos and spy agencies - what is the future of Facebook? CEO Zuckerberg has tried to allay investor fears by saying that the site's focus is on growth, not revenues. If the site's market value drops by another one-third, it may be ripe for purchase by Google (which is hardly interested, and already attempting several forays into social networking - and already knows our browsing behavior) or a major media outlet. Rumors of the sale of Facebook are growing, and it is telling that I was recently invited to a group called "We Will Not Pay To Use Facebook. Need As Many Members Possible To Stop This!"
Speculation only, but Facebook may be going to a subscription model (one example being tossed around is five hours for $12.95). And Facebook users are rioting - And using Facebook to spread their concern. Should it go to a subscription model its 200,000,000 users will drop by over 50%, even 90%, according to industry experts. Remember, Facebook still isn't making money, only burning through it - more focused on growth than revenues for now - but something eventually has to give. Its investors won't tolerate losses for long, and Facebook does have terabytes of your data for sale.
More bad press - outed for revealing too much about its users - or by going to a subscription model, the Facebook phenomena will be over.
Not social networking, per se. Yet another free (advertising-driven of course) site will replace Facebook. Many already exist, browse around and know that Facebook is probably watching, just read the terms of service.
Then create your online self once more; pick only the best pics of you and, always, lie. Befriend everyone, accept every invite, say you love their products, smile too much so they don't know what you're thinking. Confuse the monitors; junk-in junk-out; give them nothing about you that they can use. Because that's why they're here, to use you. Lie, logoff, then leave the computer behind and go find your real self, friends, a true social network that no one cares about but you.