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Startups Sell Privacy in a Facebook-Dominated Social World

Photographer: David Paul Morris/Bloomberg

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Photographer: David Paul Morris/Bloomberg

The Facebook Inc. 'like' logo is displayed on a computer screen and reflected in water droplets in San Francisco.

At London's Digital Shoreditch festival, a two-week-long event attracting thousands of ambitious tech entrepreneurs, one session speaker had this message: Don't become the next Facebook. Become the next WeChat.

In a talk titled "The Death of the Social Network & Rise of the Chatting App," Lutebox Chief Executive Officer Ali Ahmed outlined why he's convinced that users' desire for social privacy will be the downfall of Facebook.

"Private apps are dominating the social media scene by shifting behavior away from broadcasting over Facebook," Ahmed said, "and more towards private, personal engagements with your friends."

Of course, predicting the demise of a $59 billion company is perhaps a bit premature. And dealing with privacy concerns is not exactly new for Facebook, which took some heat last year over proposed changes to its user agreement for photo-sharing app Instagram, which London-based Lutebox competes with.

But it's those outcries over control and privacy that have Ahmed and other developers taking heed, especially in Europe.

Ahmed highlighted the success of private chatting apps such as Tencent's WeChat, which is forecast to have at least 400 million users by the end of this year, and WhatsApp, which sees an average of 8 billion inbound messages a day.

Meanwhile, private photo-sharing app Bonfyre launched late last year, promising its users more control over their content. Other startups, such as Familio and Ahmed's Lutebox, offer private photo sharing to other niche markets.

Easily the biggest private photo-sharing success story has been Snapchat, an app where images are so private, even the intended recipient is only allowed to see them for 10 seconds.

In the wake of Instagram's privacy faux pas, Snapchat's ephemeral ethos has proved incredibly popular. The company's CEO Evan Spiegel said in April that the service had seen a surge in volume, with its users now sharing more than 150 million photos a day. That's nearly four times the number shared on Instagram.

But Snapchat has found that with increased popularity comes increased scrutiny. Earlier this month, the Electronic Privacy Information Center filed a request with the U.S. Federal Trade Commission that Snapchat be investigated for using deceptive business practices in claiming pictures and videos "disappear forever." The center cited research that showed Android phones stored the files outside of the traditional gallery application.

Before that filing, Snapchat wrote a lighthearted blog post, saying that if you "watched an episode of CSI, you might know that with the right forensic tools, it’s sometimes possible to retrieve data after it has been deleted."

It seems that similar to our Facebook "friends", "privacy" is often a term that's loosely defined.

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