Facebook: The Backlash

Man is there a lot of Facebook hatin’ going on at the top of techmeme this morning.


It’s always like this, the euphoria is followed by the backlash. Facebook has had a great year, the evolution from a service for students to a service for everyone, the opening of the platform, and the $15bn valuation from Microsoft. It’s hard to beat the year they’ve had.

But now the backlash is here. It’s largely related to their efforts to monetize their service via behavioral targeting and the social graph. I’ve said my piece on that. I welcome their efforts to use what they know about me and my friends to make my experience on Facebook better.

But it sure appears that I am in the minority on that. But more than the reaction to the new Facebook ad system, it appears that everyone is in let’s pile on mode. Nobody’s been a more consistent bear on Facebook than Umair. And he really let’s them have it in this post. Umair says:

Like I’ve been pointing out – the real strategic problem is that
Facebook is a faux revolutionary. There’s little but evil in its DNA.
It’s not concerned with making things better, exploding yesterday’s
orthodoxies, etc – it’s just concerned with domination, control,
subordination and other obsolete massconomy games.

I totally get what Umair is saying. He compares Facebook to Google and he sees one company that’s out to make its world better and one that is out to make the world better. Maybe that’s true, but I think Facebook’s problems are more that its trying to figure out an appropriate business model under a glare of attention that is way higher than the one Google faced back in 2000 when it launched adwords.

I am optimistic that Facebook will learn and adapt and get to a good place. There’s too much at stake and it’s users can and will leave if they don’t like the experience. I’ve got three huge Facebook fans in my house and I see no evidence that is happening any time soon.

#VC & Technology

Comments (Archived):

  1. stone

    Fred,You’ve been around long enough to know where some of this is coming from — their very young CEO. He can’t possibly have the depth of experience to know how the web would react to some of this stuff. It also appears that he lacks the depth of character to know that shading the truth, if Louise Story is correct, is also a terrible idea.He needs someone, an investor or mentor, to place their hands on his shoulders and tell him “it’s time”. He’ll know that that means, I suspect, because he’s been waiting for it since the beginning.They cannot afford big missteps like this. You can make lots of mistakes when you’re young, but you can NEVER afford lots of BIG mistakes. This is very close to being a BIG mistake.

  2. Rex Hammock

    Fred, while I agree with you, I think also the backlash in this case, goes a bit beyond Facebook’s success as a product — and is beginning to pick at the founding mythology and character of the CEO. I think there are those (like me) who think Facebook provides a great pathway to the future and is so good a service, that I’m willing to put up with their early failures and tone deafness — if they keep heading in the right direction.I believe Scott Karp has a good analysis of where some of the backlash is coming from: Facebook’s – a misuse of a perceived monopoly strength.But Kara Swisher is tracking another stream from which this current backlash flows: A young, myth-creating CEO who apparently has a long history of something I wish I could call fuzzy hype, but could prove to be out-right lying.This is not a mere tech-blogger blow-back reacting to success — It’s not a good week when you get a New York Times reporter publishing a story about how you lied to her — or when a magazine throws some heavy-duty resources to piece together a story that displays a pattern of unethical (or immature) business practices — and your react by bringing legal actions against the magazine with claims so feeble a judge immediately dismisses them.Again, I’m sure you’re right about this being “the way it always is” — theres some jealousy and envy associated with the reaction. But there is also something more going on in this wave of news.

  3. Berkay Mollamustafaoglu

    I typically find myself on the other side of the privacy debates and don’t have a problem with a site learning from me implicitly and fine tune its services offered. But there is much more going on here. Facebook is violating many principles you often emphasize in your posts. They are not being transparent and honest and losing our trust. They have never mentioned that they were collecting data about my behavior even if I opt out (and even if I’m not logged in).Once trust is lost between two parties, life gets harder for both sides. I hate the fact that I have to look for hidden motives under everything facebook does. I much rather have the “trust” and share information openly. But these guys left a yucky taste.. and I’m afraid they may ruin it for everyone in the industry, even the well intentioned ones …

  4. stone

    To all,More good points from Rex, etc. I think we’re all kind of saying the same thing in different ways. Facebook is clearly a breakout service and could be around for the next 20 years if they play their cards right, but they need “great” leadership & stewardship to make this happen. Without working there it’s hard to know where these stories and mistakes come from, but it’s becoming clear that there’s a pattern emerging. Violate your users trust and quickly “fix” the problem before it gets too bad. The lawsuits and stories of unethical behavior is NOT common. As a matter of fact, Fred, please point to the parallel stories at Google. I think they are going to be very hard to find.

  5. PXLated

    I think there’s a big difference, Google started out with “do no evil” and even if they don’t necessarily uphold that in everything they do, they seem to strive for that. Facebook seems to be a “do evil” company at it’s core. That’s not easily solved, and it probably isn’t limited to the founder.

  6. stone

    Totally agree that Google and Facebook are different, but leaders matter. And, if much of the bad news about Facebook is consistently tied back to Mark Z., his investors are going to have to take a stand and fight for better stewardship. This doesn’t mean that Zuckerburg is out of the game. He can still make decisions about core strategy, and he’ll likely always keep his board seat, but he’ll have a strong counter-weight to content with. One that will prevent big mistakes from happening.

  7. Anon

    I will give Mark some credit, but mostly LUCK IMO, for getting Facebook to where it is today. But to treat a 23-year old as a seasoned executive, that’s just plain ridiculous.

  8. agawley

    The main difference between beacon / facebook ads and adwords is that adwords was designed (and conceived) from the start as a way to make search better. I guess beacon has some value to users (if they have appropriate control over it), but I have yet to see a single facebook ad that’s designed to enhance my experience as a user. The ad programme seems relentlessly focussed on the needs of advertisers (and that is another big difference to google). I still think that facebook is doing a good job of mapping out a big chunk of the graph and they have built a nice little application (that can be pretty helpful) on top of that. Unfortunately they were doing that 6 months ago. So I think users would be a bit more forgiving if there was a better answer to the question ‘what have you done for me lately?’

  9. Anon

    BTW, Google’s “Do No Evil” motto also came from their young inexperienced founders, Larry and Sergey. Again, don’t give those 2 credit for where Google is today, that credit goes to the CEO Eric Schmidt. If Larry and Sergey had been successful initially, their technology would have been acquired by Yahoo or other big companies. And I heard Larry and Sergey were vehemently opposed to advertising initially, they wouldn’t know how to build a business even if it bit them in the ass. IMO, Google is pure evil and seek to dominate everything in its path and then some.

  10. Woo Pirate

    I deactivated my Facebook about six weeks ago; I was less than impressed with how the company handled many of the allegations that were being lobbed against it by privacy advocates.Facebook has shown very little respect for it’s user base. This is no where more evident than in the way Facebook treats users who want to leave the service. Deactivating an account is easy, but deleting an account requires that the user jump through countless hoops, and delete every single piece of information they’ve ever posted on the site. If you’re a heavy facebook user, expect to spend hours tracking down every wall post you’ve made, every group message you’ve sent, every picture you’ve uploaded. Worst of all, Facebook does a good job of hiding the very possibility that users *can* delete their accounts. I only learned about it recently. One day, when I’m feeling particularly masochistic, I will take the time to reactivate my account and nuke all the posts and uploads I’ve done to the site.Facebook is like an obsessive stalker who tricks you into lending him your diary, your photo albums, and your rolodex. When you finally realize you’ve gotten involved with a stalker, you’re told that the only way you’ll ever get rid of them is by taking back all the stuff you’ve lent them. Of course, all your goods are hidden in a giant labyrinth, so you’ll have to find your way through the maze first.It’s like a treasure hunt!Except you’re playing for the freedom to be left alone. A prize that, once won, leaves you very bitter about having to win it.Now I’m reading reports that Facebook beacon affiliates send all customer information to Facebook. From a Blognation USA post:”Facebook isn’t simply learning about every action taken by Facebook users on affiliate sites, it is learning about every action taken by every user of these affiliate sites regardless of whether they are Facebook users or not.”Great. If I do business with a beacon affiliate, my information gets sent to Facebook whether I want it to or not.I know a few companies I won’t be doing any business with, then.Facebook suffers from incredible hubris; if it doesn’t get over itself, it will collapse under the weight of it’s own self-importance.

  11. Don Jones

    This is a classic example of the early adopters making a lot more noise than the mass market inside FB. I’ve recently started an account and a company page, and notice A LOT of business people actively using the service, in addition to the average consumer.FB just needs to make the kerfuffle go away and it will continue its huge growth…

    1. fredwilson

      i think you are right Don.that was essentially the point of my postfred

  12. awilensky

    THE question is, ‘what is the critical use case’; even in consumer properties, there has to be a compelling reason beyond fun to monkey around and share information. We have not seen repeatable, compelling cases where Facebook or Myspace users say, “I need this, I couldn’t do this before” Except for the independent musicians, whose life would be changed if the plethora of social sites were to evaporate? Of course they are not going anywhere, even the useless twitter has created a home for compulsive presence.What these properties do is extend the model of interaction beyond what came before. There are critical use cases for social interaction technologies in product service, management communications, consumer self service, and more.However, it has been a bitter fight getting any traction for these critical use cases – either the verticals do not appeal to the VC’s, or the current digerati at the helm of the in-vogue white-box services are not stimulated by such bread and butter applications. Pity.

    1. fredwilson

      judging from the amount of time my three kids spend on Facebook, I’d argue that they’ve done a very good job of creating a compelling use case. these kids run their lives on facebook. they do their email there, they assemble their parties there, they consult with friends about homework there, etc, etc.facebook is not a trivial service to the high school and college kids i knowfred

  13. stone

    Fred,With all respect, the main thrust of the messages is not about the viability of Facebook, rather, it’s about the viability of ZuckerBurg. Don’t you have a comment about that? Also — someone could’ve made the same strong case for Myspace only a few short years ago. I sat and watched my nieces and nephews ‘play’ with Myspace for hours only two short years ago. Today, they barely use the service. These things tend to be faddish.

    1. fredwilson

      I think he’ll be running the company and that my kids will all be using it two years from nowFred

  14. curmudgeonly troll

    The background article that was the object of the lawsuit is pretty juicy.http://www.02138mag.com/magazine/article/1724.htmlIt's not just a pile-on or a backlash, it was a substantive misstep, and the damage control suggested they didn’t really understand what they did wrong.Facebook has potential as a universal groupware platform, but still quite a long way to go.

  15. Kendal H

    Fred,I think there is a fundamental difference between this backlash, and the backlash of the mini-feed. When the feed backlash came about for facebook, it was the users that were angry. They didn’t like it and they let it be known. Whether it was through facebook groups, or at school or at that friday night party. The difference here, is that with this most recent backlash, it is the tech crowd and media that are firing it up. You don’t hear the users complaining. You don’t see the enormous user backlash like you did for the feed service. It is a big difference. The last backlash was driven by the people using the product. This backlash is being driven by the media (and that includes tech blogs). Care to comment?

    1. fredwilson

      Yeah, the only backlash that matters is the users. From what I can tell, they still love facebookFred

    2. wallbang

      my hope is that young users have completely turned off advertising and are confident they can look beyond the ads :)hope is a strange emotion…

  16. DanRunion

    1. Google *has* made my life better as well as Google’s. Business pretty much depends on that type of symbiosis (duh). Those that are tearing down Beacon (and Facebook) don’t realize that currently the network (Facebook, MySpace, etc.) isn’t worth anything, b/c no one has access to it or the ability to aggregate any info out of it. No ability to react to it. Simple fact is that you have to give at least some info to get value back out. You can’t have your cake and eat it too in this case.2. I’ve not found a use for Facebook as a user or business person yet. IMO, Beacon c/would change both.So I really wish these band wagoners would STFU and take a step away from the blue Kool-Aide of ideology. Got a better idea guys or do you just want to gripe?

    1. fredwilson

      I took a poll last night of my three kids. I explained beacon and all that people are concerned about to them. They said:1 – they don’t plan to cut back their use of FB 2 – nor do their friends3 – they don’t like the idea that everything they buy/do on the internet, outside of FB, could end up in the news feed. They want to be able to control that at the time of purchase/action.4 – they like that some of the things they do get into the news feed. Like if their friends are also going to the same concert they are, etcBottom line – I think beacon is important and facebook can get it right, like it got the news feed right.fred

      1. DanRunion

        Do they realize that basically the same data is being collected on them when they walk into any of the stores owned by say Limited Brands? Perhaps the data is *more* anonymous as it’s not published to all of their friends, but the company is still getting conversion and then tons of personal data if you buy w/ a CC.

      2. Anon

        Fred, with all due respect, that’s a very small sample you have. The reason why Facebook is valued at $15B is the industry perception that they have untapped potential when it comes to advertising to their users. Companies like Coca-Cola, and now Overstock and Travelocity, pulling out is a big sign that the perception has changed dramatically and will likely deteriorate. Even if Facebook completely reverses itself now and implements full opt-out, the damage is already done. While the users may be happier, it doesn’t help Facebook’s valuation because they aren’t the ones paying the bills.

        1. fredwilson

          I understand its a small sample but they are the user base not the people blogging about facebook on techmemeFred

          1. Anon

            Just to play devil’s advocate, here’s a different perspective from Facebook users in their 20s, also considered a core user base, http://www.alleyinsider.com…See the comment at the end from Dan Frommer, a 25 year old avid facebook user.

          2. Boris

            Anon, even opinions on that blog are mainly from people involved in the tech and or security industry — not really representative of the core Facebook user. Just because he’s 25, doesn’t change the fact that he’s probably more sensitive about tech/security/privacy issues.fred, if it makes you feel any better about your 3 data points — as a 19 year old Facebook entrepreneur, I always try to gauge the market (aka people here at University). Most people I’ve asked or questioned don’t even know what Beacon is or they’ve never seen it. Most people don’t care. I can’t emphasize enough how strong of a brand Facebook is with my generation. This is totally a Warren Buffet type company — this is like Coca Cola. They can make New Cola, and get people pissed off, but in the end we will all keep coming back to Facebook — it’s that awesome/meaningful to us.

          3. fredwilson

            That’s my point.It’s a juggernaut that is not likely to be stopped by a backlash on techmemefred

          4. Anon

            If only I had a penny every time I heard a teenager claiming to be a facebook entrepreneur, I would be rich by now. In the meantime, if you wish to bury your head in the sand about how evil Facebook is, read this article titled “Facebook’s Beacon Ad System Also Tracks Non-Facebook Users”http://www.pcworld.com/arti…

  17. rwmillis

    I completely agree that this is an issue which normally faces a company before they reach this sort of large scale scrutiny. But regarding the Umair statement, since when are domination, control and subordination “obsolete massconomy games”? We may not like to see these methods employed by our favorite companies, but it’s silly to pretend that fundamental economics have been rendered obsolete by the idealism of digital startups. Like it or not, News Corp, Apple, General Electric and just about every other corporation are doing just fine employing “obsolete” tactics in business.

  18. Michael Beckner

    There are two corollaries to what I’m reading in the thread, and I’d appreciate any feedback. Consider me Devil’s Advocate.1. For all the people who are screaming Evil / Doomsday about FB, is not the current situation simply fuel for a pre-existing perception? I’m not seeing a lot of considered analysis, but I am sensing more of the same pro-open / con-FB sentimentality.2. What does this situation say about the brands involved in Beacon? While I understand that the current problems would give a major brand (e.g. Coke) pause, what does this say about existing Beacon participants (not FB per se) who willingly send a user’s information back to Facebook even when the user in question does not want said brand to do so? (See the last few para.s here: http://www.techcrunch.com/2… It’s one thing if Facebook just screwed up — admit it, move on to bigger & better — it’s another thing entirely if major brands like the NYTimes are knowing participants in this data free-for-all.My $.02