You’re probably also familiar with the 2006 News Feed fiasco, the Facebook Beacon fail and the fact that Facebook wasn’t profitable as quickly they’d like to have been (for those of you not in-the-know, it took til they reached 300 million users to be cash flow positive).
The News Feed and Beacon taught Facebook to push the limits of privacy to gain pageviews (and thus relevance and perchance $$) and taught users, for the first time to be wary of Facebook, regarding their privacy.
From the standpoint of “online business models,” (which is somewhat of an oxymoron) this is an interesting crossroads. To what degree can users’ data be used without violating their (own social norms of) privacy? Is (total, clear and absolute) transparency about user data usage enough to maintain users? Is policy the correct intervention? What do users want from the social web? When and why do dissatisfied users leave a service?
I don’t think the open web should have to get a day job to underwrite and support its values–so how does a company make money *online,* maintain relevance, and not infringe on user’s privacy? Will Facebook figure this out before more and more users leave?