Facebook Face-Off

MetaData: Facebook Face-Off

Elizabeth Corcoran, 02.17.09, 12:50 AM EST

The social network's members fret about how it will turn chitchat into cash.

The blogsphere erupted Sunday evening following an observation by the blog Consumerist that Facebook, the watercooler of this generation, recently tightened its policies for using the data that we all so freely share on its platform. The blog summed up the problem succinctly by asserting the new Facebook rules amount to: "We Can Do Anything We Want With Your Content. Forever."

Facebook founder Mark Zuckerberg fired back but sounded a bit wounded by the attack. "We wouldn't share your information in a way you wouldn't want," he said in a blog post on Facebook on Monday. "The trust you place in us as a safe place to share information is the most important part of what makes Facebook work."

Do people really think that their private information is sacred anywhere on the Web? You can read some detailed accounts of the specifics of this dustup here and here, among other places. Zuckerberg has gone to some lengths to say that Facebook's recent changes in its terms of service simply enable the service to let you save copies of your messages and photos and that of your friends. "We still have work to do to communicate more clearly about these issues," Zuckerberg wrote.

Even so, it's lunacy to think that Facebook isn't scrambling to figure out how to make use of all those comments about what movie you liked the most last week or your favorite brand of jeans. Yes, its traffic is spectacular: in 2008, a staggering 6.6 billion "friendships" were made on Facebook. If real life mimicked Web life, that would mean that just about everybody on the planet could have at least one friend.

But unless Facebook gets better turning chatter into cash, it won't have much of a business.

So far, Facebook has made limited headway in weaving advertising into its site. Small-time operations can pay a few cents per ad to deliver their message to people with a certain set of demographics. But earning pennies for ads isn't a passport to a great business.

If Facebook really wants to collect serious money for sharing its "friends" with the highest bidder, that could mean giving up some of the innocent, playful gestalt of the site and yielding to advertisers' demands for a more intimate look at users' characteristics. That may not sit well with Zuckerberg, who cherishes the aura of Facebook more than he does its income stream.