The Facebook Effect

by David Kirkpatrick

  “Facebook Connect is the future of the way that platform is going to work,” says Zuckerberg. “I don’t think it’s going to be these little applications inside Facebook. It will be whole websites that just use people’s information from Facebook in order to share more information.” Now he says that Facebook’s internal platform, which enabled applications to operate inside the bounds of the service, was merely “an important training step.”

  Despite widespread enthusiasm for the opportunities Connect offers to tap into Facebook’s hundreds of millions of users, some potential partners are skeptical. “It’s a Trojan horse strategy,” says the CEO of one New York–based media company who pays close attention to Facebook but has no intention of deploying Connect. He sees it as a method to get between him and his customers. He predicts that once Facebook makes sites dependent on its log-in and access to users, it will start making demands. For now there is no charge to use Connect, but he expects that to change.

  Connect will also most likely become a vehicle for delivering advertising. This possibility has been downplayed by executives thus far. But Dustin Moskovitz, who speaks more freely now that he’s left the company, says sites that use Connect will ultimately be able to display ads provided to the site by Facebook. “[They] will know which Facebook user is on their site,” he explains, “so [they] can use all of Facebook’s ad-targeting information. That’s absolutely core to the Connect strategy.” Sharing in the revenue that these targeted ads make possible on other sites could become an important business for Facebook.

  Another function of Connect is that it will give Facebook even more information about users, including data no longer limited just to what they do on Facebook.com.

  In January, around the time Zuckerberg was donning his tie, a potentially serious internal crisis erupted at Facebook. As President-elect Obama was assembling his cabinet and advisers, he hired Lawrence Summers to be the chairman of the National Economic Council at the White House. When Summers had been secretary of the Treasury under Bill Clinton his chief of staff had been Sheryl Sandberg. Summers and Sandberg have remained close, and some senior people at the company worried she might join the new administration and thought it a real possibility. She decided to stay put. She was becoming an essential partner to Zuckerberg.

  In February, the year got even more serious. Facebook’s legal department posted a few changes to the company’s “terms of service,” the legalese that is intended mainly to indemnify a company against lawsuits by disgruntled users. This new version of the rules, which every new user must stipulate they have read and agreed to, even though they usually don’t, were at first ignored by virtually everyone. But at 6 P.M. on Sunday, February 15, a blog called the Consumerist, published by Consumers Union, took a close look at the changes and published a post titled “Facebook’s New Terms of Service: ‘We Can Do Anything We Want With Your Content. Forever.’”

  The article expressed alarm about the terms and quoted a section about what happens to content you post: “You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to…use, copy, publish, stream, store, retain, publicly perform or display…” Actually, that terrifying-sounding language was unchanged from the previous version, but in a key change, a subsequent clause had been excised. It said that if you removed your content from Facebook, this license would expire. Removing that clause changed everything, in the opinion of the Consumerist. Its recommendation: “Make sure you never upload anything you don’t feel comfortable giving away forever, because it’s Facebook’s now.”

  This post was quickly picked up by a number of other blogs and by many in the mainstream press. Suddenly Zuckerberg was under unexpected pressure. How, asked a swelling volume of articles appearing around the world, could he assert he owned the information Facebook’s users posted there? He couldn’t. And in his opinion, he hadn’t. But unlike in some earlier incidents, he was prepared to say so immediately. By 5 P.M. Monday he had posted a lengthy and thoughtful response on the Facebook Blog, titled “On Facebook, People Own and Control Their Information.” “In reality, we wouldn’t share your information in a way you wouldn’t want,” Zuckerberg wrote, attempting to reassure users. But then he went on to explain the complicated new legal terrain that a service like his now operated in. Users want to control their own information, but they also want to control and sometimes move information other users have entrusted to them—such as cell-phone numbers, photos, etc.

  It was not enough. A twenty-five-year-old user from Los Angeles named Julius Harper quickly created a group called People Against the New Terms of Service, which soon merged with another protest group created by Anne Kathrine Petteroe of Oslo, Norway. By Tuesday the group had 30,000 members. By Wednesday it was 100,000. Again the tools for rapid communication and organization that Facebook gives its users were being deployed against it. Meanwhile, the Electronic Privacy Information Center and twenty-five other consumer protection organizations were preparing to file a complaint with the Federal Trade Commission on Wednesday.

  Zuckerberg quickly surrendered, less than three days after the original article appeared. At 1 A.M. on Wednesday, he announced on the blog that Facebook was temporarily reverting to the old terms of service while it decided what to do next. He had said even in his earlier note that he agreed that much of the language in the terms seemed overly formal and needed to be simplified. In this late-night note, he invited Facebook’s users to join a newly formed company group to discuss what the terms ought to say, and promised “users will have a lot of input in crafting these terms.”

  The following week Zuckerberg announced that Facebook had created two new documents: a set of Facebook Principles to lay out the “guiding framework” for company policies, and a “Statement of Rights and Responsibilities” that would replace the old terms of service. He asked people to comment on both, and announced that users would be invited to vote for or against them before they went into effect. He ended with a kind of rhetoric you seldom hear from CEOs: “History tells us that systems are most fairly governed when there is an open and transparent dialogue between the people who make decisions and those who are affected by them. We believe history will one day show that this principle holds true for companies as well, and we’re looking [forward] to moving in this direction with you.”

  In subsequent weeks Facebook lived up to its pledge. It invited the creators of the original protest group, Harper and Petteroe, to help it evaluate and organize comments about the documents. Zuckerberg announced a vote that would be binding if at least 30 percent of Facebook’s users participated. Since, the week before, he had announced that Facebook now topped 200 million active users, that meant 60 million people would have to vote, an unlikely prospect. But he was at least in theory submitting to the will of the people.

  In the end only 666,000 votes were cast, with 74 percent of users favoring the revised Statement of Rights and Responsibilities. The Consumerist pronounced itself satisfied. Internet activists were impressed. Jonathan Zittrain, a professor at Harvard Law School and author of the alarmist book The Future of the Internet—and How to Stop It, wrote an admiring article noting that Zuckerberg had encouraged Facebook’s users to view themselves as citizens—of Facebook.

  Zuckerberg was pleased when I talked to him two weeks after the results were announced. He planned more such votes in the future. “If we do something controversial, what this will really mean is that we’re accountable to our users,” he told me. “We now need to communicate with them clearly about it. I think that keeps us honest.” It was a serious year, but he was displaying a seriousness to match it.

  In March 2009, Facebook made yet another dramatic set of changes, this time explicitly aimed at co-opting Twitter. The changes in this redesign were most visible not on your profile, with its “wall,” but on the home page where you first land in Facebook and see information about your friends. The top of that page now sported a publ
isher box just like the one on your profile. The message was getting louder—Share! Beneath this box, the News Feed had morphed into what Facebook now called a “stream,” a continuous list of updates and other information from friends. But the stream also included updates from a new source: pages where you had become a “fan.” Now becoming the fan of a commercial Facebook page was almost identical to following a person or company on Twitter.

  The new streamed News Feed differed from the old one in two fundamental ways. It was updated in real time (like Twitter), and it was not based on an algorithm (neither was Twitter). The old News Feed depended on software that watched your past behavior and attempted to guess what you would be interested in. You could never be sure what would surface. The new stream, by contrast, was what the eggheads at Facebook loved to call “deterministic.” You determine exactly what appears there. Facebook added filters on the left side of the home page to help you control what appeared in your stream. You could use them to see videos, or photos, or status updates, for example. You could also put friends and pages into groups to create different personalized views of the stream. Now, for instance, you could see just family members, or people from your high school class, or employees at Facebook, or your best friends.

  It was a heady and confusing mix. There remained a small algorithmic section on the home page called Highlights, an unappealing list of small items and tiny photographs on the lower right side of the page. Few people found it very useful. And this time Facebook abandoned the previous redesign’s deliberately gentle introduction process. There were no trial periods or parallel versions to ease users into the changes. But it was immediately apparent that many of Facebook’s 175 million users did not like the changes.

  Nor did the company’s increasingly defensive staffers expect them to. As soon as Facebook began to roll out the new design someone created a satirical group entitled I AUTOMATICALLY HATE THE NEW FACEBOOK HOME PAGE. Many of the group’s members worked at Facebook. Its description read: “I HATE CHANGE AND EVERYTHING ASSOCIATED WITH IT. I WANT EVERYTHING TO REMAIN STATIC THROUGHOUT MY ENTIRE LIFE.” Staffers posted facetious remarks. “BRING FACEBOOK BACK TO ITS FORMER GLORY. HARVARD-ONLY,” wrote one. “I will hate this redesign until another iteration, in the event [of] which I will love this redesign and vehemently oppose the successor,” wrote another, sarcastically.

  Two weeks after the redesign, yet another Twitter-like feature was added—new privacy settings that enabled you to open parts or all of your profile to everyone on Facebook. And in what would be the coup de grâce, plans were in the works to enable users to “fan” individuals. Adding such asymmetric connections for individuals would more or less complete Facebook’s mimickry and make it possible to function essentially as if you were on Twitter. But while Zuckerberg originally planned to add this feature in June 2009, he still hadn’t by February 2010.

  By mid-2009, Twitter had 50 million members, and Facebook continued running scared. “Every time I hang out with a Facebook employee, they ask me what I think of Twitter,” Moskovitz told me in May. One thing even he worried about was that top engineers were starting to choose to work at Twitter rather than Facebook (or his own new start-up). “At Facebook we feel like if we address this, we can definitely win,” he said, “but we would certainly feel like shit if we just like weren’t paying attention and Twitter did something we didn’t understand and got past us.” Facebook board member Marc Andreessen, who is also an investor in Twitter, told me around the same time that the two companies were “elephant bumping.” “It’s too late for somebody to compete with Facebook on Facebook’s turf,” he said. “So when the threats come, they will be disruptive in nature, right? Disruptive threats tend to come up from below. They fly up your tailpipe, instead of coming straight at you. So Twitter is the kind of thing that Facebook should be very aware of.”

  Sean Parker, who tries hard to stay involved in Facebook product decisions from a distance, was a longtime advocate of turning News Feed into a stream that looked more like Twitter. Zuckerberg in fact resisted it for a long time, but the growing competitive pressure from Twitter, along with relentless politicking by Parker and others like Adam D’Angelo, finally convinced him. “Mark always told me he wasn’t going to do it,” says Parker, “but in classic Mark style he listens and listens and listens and then at some point comes to the conclusion on his own that this is the way it has to go.”

  Facebook’s longtime self-definition as a place to connect with people you know in the real world is becoming slowly but steadily less central. To be a “friend” requires a bidirectional interaction. Both you and your friend must accede to it, as Parker explains. But now there are other sorts of useful relationships in Facebook. Parker predicts Facebook will, over time, formally separate the three components to becoming a friend with someone on Facebook—declaring that you know them, giving them permission to see your own information, and subscribing to see all the information they produce.

  Zuckerberg concedes that “the concept of a ‘friend’ is definitely getting overloaded.” He says that word was useful to “get people over a bunch of hurdles.” Most importantly it got them used to sharing a lot of information about themselves—after all, only friends would see it. But Facebook has offered only a binary choice for your relationships with others: friend or nonfriend. It will gradually offer more subtle ways to tune interactions with people. Friending will become more nuanced to more accurately reflect the various degrees of connection we have with people. All of us who have agonized over whether to accept a friend request from somebody we barely know will have more options.

  But something else is going on as well—over time Facebook will become about much more than friendship. The first indication of that was when it added fan pages and sent page updates into your News Feed alongside updates from individuals. Ethan Beard, a Google veteran who is now marketing boss for Facebook’s platform and a key member of Zuckerberg’s team, explains: “As we’ve continued to evolve our thinking we’ve realized there is more to the graph than just people—the objects, items, organizations, and ideas you are connected with. Anything. By mapping out all these things we can come up with an extremely robust sense of a person’s identity.” In other words, the fact that you’re a fan of U2, a coffee shop in your neighborhood, and Ayn Rand says more about you than the fact that you friended someone you met at a conference last year.

  The future of Facebook will involve giving people tools to uncover relationships with other people that are manifested through common interests and behavior. Such a new direction poses the risk that it could make Facebook feel more like a place for marketing and less like a place for friendship.

  As Facebook maps out all these additional connections and monitors every user’s interactions with them, Zuckerberg predicts users will be sharing an ever-increasing volume of data. “Think of it as just this massive stream of information,” he says. “It’s almost the stream of all human consciousness and communication, and the products we build are just different views of that. The concept of the social graph has been a very useful construct, but I think increasingly this concept of the social stream—the aggregate stream for everyone—will be as important.”

  When he thinks about the evolution of this stream, Zuckerberg makes a comparison to Moore’s law, the prediction by Intel’s Gordon Moore back in the 1960s that the number of transistors that could fit on a computer chip would grow exponentially over time. He thinks there is a similar exponential phenomenon at work in social networking. In a decade, he believes, a thousand times more information about each individual member may flow through Facebook. This hypothesis has corollaries he finds intriguing. Says he: “People are going to have to have a device with them at all times that’s [automatically] sharing. You can predict that.”

  In urging Facebook’s users to turn more of their updates and other contributions into public broadcasts, and by attempting also to shuffle in their commercial behavior as well as their interactions with friends, Zuc
kerberg is gambling that people will over time care progressively less and less about privacy and that they will actually want all the additional information that will be coming their way. It’s not just the increased volume of information that’s potentially problematic. Will people tolerate so much information about themselves getting loose on the Net? With a considerable portion of the world’s population on board, Facebook may become a giant experiment in personal disclosure. Zuckerberg says he remains committed to giving people the privacy controls they want. Whether he can resolve these contradictions as he changes the software beneath more than 400 million users will be fascinating to watch.

  In late April 2009, Facebook quietly made a change as radical as any it had ever attempted. With the release of something called the Facebook Open Stream API, the company laid groundwork that could transform the way people use its service. The Stream API is a sort of companion to Facebook Connect. If Connect is a way to extend Facebook’s platform across the Web, the Stream API represents a way to distribute the experience of being on Facebook outside the service itself. That may sound odd. Today we mostly take for granted that the way users consume Facebook information is on their home page at Facebook.com.

  The Stream API lets any site take that feed and publish it elsewhere—even potentially to alter and add to it in a way that could not happen inside Facebook. It will let other services build sites that look and feel much like Facebook itself, even though the data flows will still be controlled from Facebook’s servers. If I want, I could build my own website where any Facebook user could see their entire News Feed. Users can act at these external sites much as they can inside Facebook. Data can flow back into friends’ News Feeds, too. The software service called TweetDeck enables this already, among others.