No One Really Cares About Facebook's Privacy Flap -- Except Congress

Consumers May Whine, but No Business Has Suffered For Treatment of People's Private Data

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Josh Bernoff
Josh Bernoff
Go ahead. Name me one company of a significant size whose business suffered due to its treatment of people's private data.

Unless I'm missing something, you can't.

TJX put 45 million credit cards at risk. Do you even remember (it happened in 2007)? Has anybody stopped shopping at TJ Maxx? Can't see the impact.

In the online world, I can't name a single significant company that had a problem. They pay lip service to being concerned about privacy, but, in fact, a small number of verbal people whine, but very few leave. If a site is useful, most people (not you, the smart readers of this blog, but average everyday people) vaguely wonder about what happened, but won't give up their site.

So let's take this context and apply it to Facebook. We've had multiple revisions of the privacy policy. We've had CEO Mark Zuckerberg saying that privacy is no longer a social norm. And we've had web searches on how to leave Facebook trending. But still, Zuckerberg says not many people are leaving.

Forrester's own quick pollshows that few are leaving -- and our readers are way more knowledgeable than the general Facebook population.

Read the new Facebook announcement carefully. Here's my analysis of what Zuckerberg is saying: Facebook's engineering process led them into this spot. It's not that Facebook is against your privacy, it's just that they weren't paying close enough attention -- they were concentrating on connections to the open web, like the "Like" button. But now the outcry is loud enough that they've fixed things with a simpler set of settings.

Not stated, but in the background, is this key fact: the more private your content is, the more Google can't index it. The more public it is, the more Google searches can land on it. Facebook is trying not to be part of the splinternet, but its own members won't let it.

What does this mean?

First, the most important impact of the Facebook flap is not on its own members, but on Congress. Regulation would cause lots more problems than a few members leaving. This is the real battle to watch, and the one that was probably quite persuasive in getting Zuckerberg to change his tune.

Second, if Facebook followed the path it was on, it risked becoming the first significant company to lose business due to not paying close enough attention to privacy. Eventually, some company will create something so compelling that they think privacy doesn't matter. At that point, we'll see which people prefer -- fun/utility, or privacy. And I'm betting fun/utility wins. Because while few will admit it, Zuckerberg might be right -- privacy isn't much of a norm any more.

What does this mean for you as a marketer or website? The angel on my right shoulder wants to tell you to behave carefully with people's information. But the devil on my left says you won't lose many customers even if you don't. Just remember, it only takes one violation to trash your reputation. So long as you don't care about that, the consequences may be limited.

ABOUT THE AUTHOR
Josh Bernoff is co-author of "Groundswell: Winning in a World Transformed by Social Technologies," a comprehensive analysis of corporate strategy for dealing with social technologies such as blogs, social networks and wikis, and is a VP-principal analyst at Forrester Research. He blogs at blogs.forrester.com/groundswell.
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