MediaFile

Facebook wasted no time acting with impunity by (once again) diluting member privacy protections this week. But it needn’t have hurried. Any semblance of democracy was washed away at noon Pacific Time Tuesday, when a vote to have votes on policy changes went down in flames. It solidified the world’s largest social network’s rule by fiat. This may be good for business now, but in the long-run it could backfire.

On Tuesday not enough Facebook members weighed in on whether they should keep their right to vote down policy changes. The vote didn’t count unless 30 percent of the service’s 1 billion members bothered to vote.

The vote to keep the vote failed to meet the arbitrary threshold — by 299 million votes.

At pretty much the same time that vote ended, Facebook changed a number of privacy settings. Some made it easier for members to control what others knew about them by more prominently displaying who could contact them and who could see their “stuff,” in the parlance of Facebook. A different modification was a big improvement: a one-button link to block someone.

Another big change was the sort of matter on which members might have wanted to offer feedback: The elimination of the right to opt out of searches on Facebook. Director of Product Sam Lessin told the New York Times that only a “single-digit percentage of users” availed themselves of this feature. But as Nick Bilton notes in the article, even 1 percent of a billion is 10 million people who would rather be left alone and now won’t be.

Instagram, the mobile photo sharing app that Facebook bought for about $700 million, has been doing something new over the past few weeks. Up until now, one couldn’t see all of a user’s Instagrams online, the way you could, say, see all of a Twitter users’ tweets. But in recent weeks, users’ collections have been uploaded to the Internet automatically (see my profile page as an example). Instagram never bothered to ask for permission. Don’t want people to be able to easily access all your pictures from your Web browser? Too bad.

Between the Instagram change and other more substantive and complex alterations to Facebook’s user-feedback policy this week, the world’s largest social network has a clear modus operandi: What’s good for Facebook is good for you. This is the Facebook Doctrine.

Along with relatively innocuous Instagram changes came word that Facebook intends to eliminate its very modest experiment with democracy. It was a scheme by which members could undo changes (but still not stop them from happening before they took place). The rules Facebook put in place established a transparent process: A policy could be reversed if it received more than 7,000 comments, more than 30 percent of people on Facebook participated in a vote, and if that plurality voted against it.

Facebook has reached an almost unimaginable milestone: 1 billion people are active users. It is hard to get your head around that number, which represents one-seventh of the world’s population (and not every one of us even has Internet access). It’s almost half the total number of people estimated to be on the Web at the beginning of this year.

Even CEO Mark Zuckerberg can’t quite seem to comprehend it: “It’s really humbling to get a billion people to do anything.”

But despite gangbuster growth, Facebook is based on a tricky business model: The more they use members’ shared information to target them for advertisers and marketers, the less members are likely to go along, and the more they’ll realize the bargain they’ve struck. Just as Facebook effectively redefined “Friend,” it is pushing the boundaries of the public-private divide.

Editor’s note: This piece was originally published at PandoDaily.com. 

This past week I heard two rational arguments on the fate of Twitter from two smart investors.

One was an argument that it’ll likely fail in its bid to become a public company. The logic went like this: Facebook, Groupon and Zynga have proven the private markets are fundamentally horrible at valuing companies. In the early stages, that doesn’t particularly matter. But when you get into pre-IPO secondary shares being bought and sold, it does. Just ask the people who bought pre-IPO shares of all three of those companies.

Twitter – with its relative lack of a business – was always a more dubious growth bet than those other three, buoyed by the sheer strength of its product. And now, there’s just no way it’s worth anything close to the $8 billion it was valued at at the last round, this person argued. If Facebook, Groupon and Zynga have all had a greater than 50 percent haircut – Twitter can’t even dream of going public now.

Facebook has now gone through its first trial by fire as a public company, slightly exceeding revenue expectations (with $1.18 billion) but showing a big loss in its first reported quarter ($157 million). Facebook shares were pummeled in after-hours trading; the company’s market cap has been slashed in half in just 10 weeks.

This is a bad, bad situation for Facebook’s early shareholders, 97% of whom are individual, retail investors – unlike those at the other big tech titans, which are majority-held by institutions: Google (68%) and Apple (67%). That Facebook’s percentage is so high suggests that Facebook is a stock for the masses. The masses need a hero.

That hero is not Mark Zuckerberg. He needs to get out of the way – not because we can judge him a disaster based on a single’s earnings period, but because he isn’t playing to his strength. He’s letting down the average folks who saw something shiny and new, but are now seeing shades of overhyped tech redux.

We are losing our faith in TV news as fast as those high-speed chases it’s so happy to show us. At the same time, we’re driving like maniacs on the social-media highway, letting it all hang out with the top down.

What do they have to do with each other? Both are advertiser-supported media. One prints money, the other not so much, at least not yet. And yet one is on the downswing, the other ascendant. What does this say about human nature and tapping into elusive and guilty pleasures?

In its annual poll, Gallup Politics found that only 21 percent of respondents expressed a “great deal” or “quite a lot” of confidence in TV news – less than half what it was when the poll was first conducted in 1993, but down only a point from last year.

With more than half of the U.S. public on Facebook and more than 200 million tweets sent each day (about 30 percent from the U.S.), American life is continuing to enmesh itself with social networks. But for the CEOs of the top 500 U.S. companies, social networking is a small — if existent — piece of successful living.

In a report released Thursday by Domo and CEO.com, the online presence of Fortune 500 companies’ top executives was compared to that of the general public, revealing that less than 30 percent have at least one profile on social networks. The vast majority have none.

Some of these accounts sit inactive — five of the 19 CEOs on Twitter have never tweeted — while others seem underutilized — 25 of the 38 CEOs on Facebook have less than 100 friends. The only social network that these executives outdo the U.S. public on is LinkedIn, the “world’s largest professional network.”

The two speakers from Twitter -- Ryan Sarver and Doug Williams -- had just left the stage at Big Boulder, a data conference I'm attending in Colorado, when Twitter, the service, went down Thursday. Neither of them have anything to do with keeping the service up and running, but the restless audience probably still would've thrown the hotel-provided notepads and candies at them if they could've. Such was the level of dissatisfaction about the Twitter platform's outage yesterday -- and let's face it, any day a service we rely on goes out, even when the crowd in question doesn't consist of users and consumers of social big data, and the odd journalist.

The outage may have been poorly timed for Sarver and Williams, but the incident speaks to a larger problem the companies represented in this room are facing: building on top of social platforms.

Consider Zynga. The high flying gaming company, built primarily on top of Facebook's Open Graph, has faced record lows in its stock as investors have lost some confidence in the company's ability to continue growing. Or consider just about any other company, social or not, that is trying to reach its fans and customers in the social media world.

Silicon Valley start-up Swipp says it has raised $3.5 million in funding from venture firm Old Willow Partners, an early investors in Groupon. It will use the cash to develop and launch its first products sometime in late fall. On the subject of what exactly those products will be, Chief Executive and co-founder Don Thorson was cagey. But it seems like he’s aiming to create a social network where it would be easier for consumers and merchants to analyze or make money from data than on say Twitter or Facebook.

“With (so many) people connected we should be able to do so much more than just tell each other where we’re having lunch,” said the executive, adding that conversations on social networks like Facebook and Twitter are “pretty cool stuff but not meaningful data. The bigger the network gets the smarter it should get.”

A basic Twitter search of a particular hot topic like a service price increase or a new product can already give a snapshot of how people are reacting, But that’s not enough for Thorston “We think that’s just a really 1.0 way of being able to extract information,” he said. With Swipp “you’ll have quantifiable data on that topic.” For example, it could figure out what percentage of comments were complaints and what percentage were positive.

In his first appearance at the World Wide Developer’s Conference as spiritual leader of the Apple faithful, CEO Tim Cook made it clear that he intends to not just further Steve Job’s vision but expand upon it. It’s never been more clear that Apple is intent on world domination.

Conspiracy theory? No. Try inescapable conclusion.

What else are we to make of Apple removing Google Maps from the iPhone? Google Maps was a core feature on the very first iPhone, but it will disappear in an iOS software update announced Monday at Apple’s developer conference.

Apple’s tension with Google is legendary. They began as friendly neighbors in largely complementary businesses – former Google CEO Eric Schmidt was even on Apple’s board. But after the introduction of the Android, Steve Jobs’s anger at Google’s entry into the mobile phone business was palpable.