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Facebook Is Flirting With a Big Business Backlash

Facebook Is Flirting With a Big Business Backlash

Facebook's race to monetize its content is fueling its drive to make everything open, and users and company brands alike may get left behind in the dust. Businesses are very sensitive about protecting their brand logos, and customers who feel a firm's association with Facebook intrudes on their privacy may not be customers for long.

By Renay San Miguel
05/21/10 5:00 AM PT

Was it only four years ago that the anti-Facebook crowd was backlashing against the concept of the News Feed? Time sure flies when you're accusing the world's biggest social network of invading its users' privacy.

Forget about the current spasm of criticism; hating on Facebook has been the default setting for a sizable portion of the technosphere -- and, it seems, a big chunk of the network's users -- for a while. Type in "anti-Facebook groups" in Google and you get a hit parade of mainstream media articles and blog posts zeroing in on Mark Zuckerberg's creation. Time Magazine focused on the anger expressing itself back in 2006 with a flurry of "I Hate Facebook" groups on the network, venting about the then-new News Feed, which announced all your friends' activities to the world -- so-and-so likes this, whats-his-face is now friends with that-guy-there, etc.

Facebook was barely more than a college-based Web phenomenon and had just made itself available to membership for anyone 13 years of age and older when Time's Tracy Samatha Schmidt wrote, "Like it or not, Facebook's face may be changing for good. The social networking site, which was originally an exclusive website for college students, has expanded to include high school students and corporations. Sponsors now spend thousands to advertise on the site, and politicians are also tapping into Facebook. For Zuckerberg, the News Feed allows Facebook users to better keep up with each other. 'All the most interesting stuff that's going on is presented to you,"' Zuckerberg told Time recently. "'The analogy would be instead of an encyclopedia, it's now news. We're emphasizing what's going on now.'"

Deja Vu

But what went on back then was invading users' privacy, said critics. Sound familiar? And yet the News Feed is still around, and those "I Hate Facebook" groups on Facebook could not throw cold water on the social network fire. Eight million college-based members went forth and multiplied to 50 million global users in 2008 when the Times Online website headlined its article, "The Anti-Facebook Movement." The gist of that story? University students in the UK who were boycotting the network for what they saw as its disdain for user privacy: posting profiles on Google and letting advertisers target users via demographic data. Yet those same "Facebook refuseniks" were lamenting how they were missing out on campus activities and social events because organizers of such were using Facebook pages as promotional tools to save money and generate feedback, thereby immediately turning the non-joiners into the uncool kids.

The Times' Bertan Budak wrote, "University club and events promoters are becoming increasingly dependent on reaching their target audience through electronic invitations via social networking websites -- with Facebook being the popular choice of such sites, according to Sumaer Amar, an events organiser, who runs Sumaer & Co., a company that provides students in the North of England with club, R&B and costume themed nights. 'Promoters generally use Facebook to promote their nights because it's fast, easy and free,' explains Sumaer, who is also studying for a business degree at Stephenson College, Durham University. 'With the RSVP function [on Facebook] they also let us [promoters] know what kind of a turnout to expect.'"

Risky Business?

Three things should be clear by now: Sumaer is probably on his way to a profitable career as a digital media strategist/content director for a major marketing firm, Zuckerberg and company have shown time and again (with the notable exception of the Beacon ad data fiasco) that they are going to do what they want to do with user data -- privacy issues be damned -- and a business/marketing angle has always played some kind of supporting role in the Facebook story.

And therein lies the real danger for Facebook regarding the latest backlash: Small, medium and large businesses may actually start paying attention to the privacy issues and wonder whether their credibility and customer trust are at stake.

Social media marketing specialists have told me in previous stories how much value Facebook and Twitter can bring to companies and their brands. The distance between brand and customer is narrowed; interactivity and user feedback via comments on Facebook fan pages and tweets encourage conversations with human beings, not lectures from faceless corporations. The new Open Graph platform, with the omnipresent "like" button seeding the Web, turns that Internet into the mother of all recommendation engines. What company wouldn't want to engage in all that?

Yet a very influential social media analyst, Jeremiah Owyang of Altimeter Group, has dug up some reasons why companies should be afraid, be very afraid, of recent Facebook controversies. In a post on his Web Strategy blog titled "How Facebook's Community Pages and Privacy Changes Impact Brands" -- a post that's making the Twitter rounds among marketing types -- Owyang shares some points raised during his talks with "a handful of brands and their representatives."

Facebook's race to monetize its content for advertising purposes is fueling its drive to make everything open, even if users and brands get left behind in the dust. New "Community Pages" aggregate content from Wikipedia and Facebook users via wall comments. The idea is to let everybody talk about subjects of mutual interests, but it's also pushing corporate information and logos from those Wikipedia pages out to new destinations. The social network's new moves are intended to maximize search engine optimization, but they could also mean confusion for customers who run into that info, thinking its the official company Facebook page. And there's that thing about some users not realizing their wall comments could be heading somewhere else on the Web without their knowledge. Community pages also don't let you leave comments; where's the interactive love in that?

Once again, Facebook does whatever it wants with member data and "asks for forgiveness later," as Owyang argues. That apparently goes for companies as well; Owyang says brand representatives he spoke with weren't notified about the new pages. A loss of trust in Facebook by companies mixed with their customers' concerns about privacy and how FB is using their data can result in a volatile combination; both brands and customers could take their business elsewhere.

I say "could" because in spite of what is clearly a pattern by Facebook of disregarding users' concerns, the company has grown to 400 million-plus members. People keep joining and sharing, and businesses keep following the potential money. I doubt the recent "boycott Facebook" dates will have any impact, and a few bloggers and tech-watchers are coming to Zuckerberg and Facebook's defense. (I'm waiting for the "Leave Mark Alone!" video on YouTube, done a la "Leave Britney Alone!"-style).

Yet Facebook really rolls the dice by playing haphazardly with the trust of businesses, and the resultant trickle-down effect involving user trust. There's a reason why companies zealously protect their brand and logos; they know consumers don't look scour their neighborhood supermarket for anything that says Proctor and Gamble. They're looking for Pampers. A brand is their face to the world. And now Facebook wants to tinker with that.


TechNewsWorld columnist Renay San Miguel started his journalism career with his hometown newspaper in Texas in 1979. He moved to television in 1985, anchoring, producing and reporting in Austin, Dallas and San Francisco before joining CNBC as a technology correspondent from 1997 to 2000. Following a stint with CBS MarketWatch, which included filing tech stories for the CBS Early Show, San Miguel joined CNN Headline News in 2001 as an anchor/tech reporter. He also contributed digital content for CNN.com. After his 2007 departure from CNN, San Miguel founded Primo Media and now freelances in television/online reporting and media consultation. San Miguel is host/managing editor for Spark360, which produces news-style paid content for SMBs distributed via branded Web video portals and social media platforms.


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