Facebook Inc. has rankled politicians from Amsterdam to Washington for failing to protect personal privacy. Yet for all the criticism, users are flocking apace to the world's largest social network.
Facebook had 519.1 million users last month, up from 411 million in September, according to ComScore Inc. And the site continued to add traffic this month, even as U.S. lawmakers, the American Civil Liberties Union and 30 European countries lodged complaints that Facebook has been reckless with personal data.
"I don't think we're going see an immediate and large migration away from Facebook," said Augie Ray, an analyst with Forrester Research Inc. in Foster City, California. "There isn't a real clear alternative for people to do the sorts of sharing that they've really come to expect and enjoy. What Facebook needs to make sure is that their actions don't create demand for that competitor."
Chief Executive Officer Mark Zuckerberg and other executives will unveil a simplified approach to privacy controls today at the company's headquarters in Palo Alto, California. Critics have blasted the current approach to privacy as overly complex and tilted toward making more information public. The past few weeks have been "extremely humbling," Facebook Vice President Chris Cox said yesterday.
'We're Quitting Facebook'
Internet companies are grappling with heightened scrutiny of how they gather and use personal information. Google Inc. came under fire in Europe and the U.S. after it mistakenly collected private data from Wi-Fi networks while working on its Street View service.
Some Facebook users, citing the privacy settings, have threatened to abandon the service. A website called "We're Quitting Facebook" asks visitors to commit to leaving the site May 31. It had enlisted fewer than 16,000 people as of yesterday.
"For there to be any impact, there would have to be tens of millions," said Chris Hoofnagle, director of the Berkeley Center for Law and Technology's information privacy programs at the University of California. "There's so much buy-in to the platform that the company can act pretty aggressively and users won't hit the delete button."
Even so, Facebook can't afford to ignore the issue. Privacy groups have urged the Federal Trade Commission to force social- networking companies to keep a tighter lid on users' data. Facebook also needs to preserve a trustworthy image to maintain ties with its advertisers, such as Starbucks Crop. and JetBlue Airways Corp.
'Self-Regulatory Regime'
"For Facebook and other online companies, they've had a self-regulatory regime with sporadic enforcement for a decade," said Ryan Calo, who runs the Consumer Privacy Project at the Center for Internet and Society, which is housed at Stanford University. "They have to actually be concerned that Congress or the FTC will intervene in a way that actually subjects them to substantive requirements."
While privacy is a consideration for users, many are wedded to Facebook's features, such as messaging, social gaming and running feeds of friends' status updates. The average user creates 70 pieces of content monthly and is connected to 60 pages, groups and events, according to Facebook.
Facebook's U.S. traffic was 4.7 percent higher last week than in the week ending May 1 -- before the latest privacy concerns spread. The site accounted for 8.5 percent of Internet visits, according to Experian Hitwise in New York.
'Like' Feature
The company drew criticism after adding features to the site last month. One addition automatically connects users to three outside websites, unless they specifically opt out of the service. The sites -- Yelp.com, Pandora and Docs.com -- tailor visits from Facebook members based on the user information. Another feature, called "Like," lets people display their preferences for outside websites and pages.
"If they can put together a system that's easy to use and makes it clear to Facebook users exactly what they're sharing and not sharing, then, yes, it can stem the tide of criticism," said Patrick Kerley, a consultant with Levick Strategic Communications LLC in Washington. "They've somehow managed to not communicate well on this platform that is so well known for its ability to communicate and share."
Zuckerberg said Facebook "just missed the mark" with its privacy settings. New controls will be simpler to use and make it easier to turn off third-party services, he wrote in the Washington Post this week.
Regulatory Threat
Since it's hard to switch information to another social- networking site, users have a tough time leaving, the Berkeley Center's Hoofnagle said. That leaves the threat of regulation as the company's biggest immediate challenge, he said.
In an April 27 letter, four U.S. senators pressed Facebook to rethink its latest features so that users can keep more personal information private. One of the senators -- Charles Schumer, a Democrat from New York -- also asked the Federal Trade Commission to provide privacy guidelines to social- networking sites.
Earlier this month, 15 consumer groups filed a complaint with the FTC. Officials from 30 European countries also wrote a letter to Facebook complaining about the privacy settings.
Hemanshu Nigam, founder of online-privacy advisory firm SSP Blue in Los Angeles, says social-networking users are already careful about what they put on the sites.
"They're choosing what to put online in the first place, so they're not so much concerned about it being visible or not," said Nigam, who used to be chief privacy officer at News Corp., which owns Facebook rival MySpace. "They've already gone through the vetting process of deciding whether to put it online in the first place."
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