Facebook Learns from Its Fumble

After an outcry over a news feed feature, the site is tightening privacy protectionsand promises to do market testing next time

Mark Zuckerberg is a reluctant poster child for the phenomenon sweeping the Internet known loosely as Web 2.0. Partly that's because he's shy. And partly because he's more interested in building cool new features for Facebook, the social networking site he started two-and-a-half years ago in his Harvard dorm room, than he is in riding the speaking circuit. His take on Facebook is that, unlike many social networking and user-generated content sites out there, it's not about merely helping people find dates or network or keep in touch. Instead, it's about "helping people understand the world around them," he says.

That's why he was so pumped on Sept. 5 to pull back the curtain on the site's new features: The News Feed and Mini-Feed. They're tools that detect anything new about a user profile, such as new pictures, a change in marital status or a new blog posting—and aggregate it all into a news feed all about you. It shows up on your profile page, and the "headlines" are pushed out to preapproved friends. While a typical profile on MySpace, Friendster, Facebook, and other sites is like an encyclopedia entry, this is like an Associated Press newswire feed, giving you an update on any changes in your friends' lives, every time you log on. No hunting around your friend's pages for new stuff, it all comes to you.

A week before the launch Zuckerberg beamed describing it. The site usually only changes bit by bit; a new button here, a less-cluttered column there. But to Zuckerberg, this was an important new direction for the site and he wanted it to come out all at once. The features would further differentiate the site from the rest of the social networking pack, he hoped.

As the team readied to push the button on the new features, they were expecting a big response, admittedly, not all of it positive. After all, the site gets thousands of e-mails after making only the tiniest of changes. And this was big. And unlike most of the interactive tools considered Web 2.0, there was no focus group or test period. It would just go live.


  But nothing could have prepared them for what happened next. By the following day, hundreds of thousands of Facebook's most avid users turned on the site, horrified by what they viewed as an invasion of privacy. Thousands of people e-mailed the company. A group was formed called "Students Against Facebook News Feed." Petitions were circulated. Students in Florida even planned a boycott of the site Sept. 12. It had to be stunning for Zuckerberg, who wasn't granting press interviews. A week before launch, when asked if he was concerned about a privacy backlash, he appeared surprised, saying, "No, these people share stuff already and they get something out of sharing."

They've shared all right. And Facebook is listening. On Sept. 7, the site is ratcheting up privacy protections—the result of around-the-clock coding. On their privacy settings page, people will be given greater control over what items will or won't be included in news feeds. "We are giving people the control they've been asking for," says Facebook spokeswoman Melanie Deitch.

The company plans to post a new blog about the changes and eagerly awaits the response. But at no stage has the company considered pulling the features altogether. "That's just not going to happen," Deitch says. "These are fundamental features in the next evolution of Facebook."

They're also part of a tough lesson being learned by all the sites specializing in building online communities and content generated by users. Facebook's "new" features don't give users access to information they couldn't already track down. It's just aggregated in one area and disseminated in a fresh way. The site wasn't doing anything differently; it simply felt different to the users who provide the information that makes the site so valuable.


  Such fuzzy emotions are important when your site lives and dies on people sharing personal information. And Facebook is wise to move quickly with real changes, rather than just emphasizing what protections are already there or simply pointing out that the information was already public (and it was). It could have been tempting to dismiss the outcry as a vocal minority, amplified by the ability to broadcast thoughts and feelings over the Web, including via Facebook. Total e-mails on the subject to Facebook's customer support group represent slightly more than 1% of the site's nine million users.

But privacy is a big reason Facebook users are so loyal, with more than half of its users coming to the site every day. You can only sign up on the site through a user group, like your college, your high school, or your employer. And you can only search profiles in that group. No one has access to everyone. Users also have tight controls over what they want to be public and what they want to be private. For example, you can show photos to your friends, but not people in your workplace, if you choose. A sign of the confidence that has instilled in people: More than one-third of all users list their cell-phone number on their profiles. Indeed, it's notable that the boycott planned by the most upset users is just for one day. "This reinforces how important Facebook is in people's lives," says David Sze, partner at Greylock and an investor in Facebook.

Ill will may be hard to dislodge overnight. What makes these sites valuable is that your friends use them too. And as upstart MySpace (NWS) taught veteran social network Friendster, loyalties can change fast on the Web, where a competitor is just a click away. Already there are a raft of small companies seeking the kind of campus ubiquity that Facebook has.


  CollegeHotList.com is one such fledgling. It was launched in March by four students at Loyola and New York University. It's available at 70 schools now, and recently about 200 to 300 new users were checking it out a day, says co-founder Chris Mirabile. Since the Facebook controversy started, thousands of people have been coming to the site, doubling each hour at the peak of the controversy, he says. While it's hardly a threat to Facebook now, the team has moved up plans to launch at 1,000 schools in the next few days. In addition, CollegeHotList.com is considering raising some venture capital money to further exploit the opportunity.

Mirabile and his friends started the site because other recent Facebook moves haven't sat well with some college crowds. Take the recent advertising deal with Microsoft (MSFT) and even the decision a year ago to expand the site to high schools. "People thought it was exclusive to college students, and they don't like that their little brother or sister can get in," he says.

Indeed, Facebook finds itself at a crossroads. Can it appeal to users outside of college life without neglecting its core audience? Should it? As it continues to be a trailblazer for Web 2.0 sites, more fumbles will likely come. But don't expect ones like this. Deitch says the company has learned the importance of better explaining and testing new features.

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