The Web Uncovered

While the Facebook vote on terms of use are not specifically highly technical, they reveal an interesting tension point for subscriber-based websites who are dependent on advertising revenue.  Who are you loyal to?  Subscribers, Advertisers, or Shareholders?

As always, the answer lies somewhere in between.  In this case, Facebook treads murky water, as their subscription base’s information is what gives advertisers the ability to ultra-segment and target with their ads.  In other words, Facebook has the win the trust of the people who they exploit for advertising sales.  

The takeaway:

Unfamiliar challenges require unprecedented solutions.  Facebook creating a democratic vote on their terms of use are barely short of revolutionary.  Even if both the choices of pre-approved, and it requires a 30% turnout, it is still beyond what any large-scale social network or site has done before.  Consider what other ways you can maintain profitability while retaining subscriber trust.

For those of you who didn’t catch it, check out this article about Facebook in New York Magazine:  Do You Own Facebook or Does Facebook Own You?

  Basically, it is exploring how the Facebook business model effects relationships with both users and implicitly marketers.  This is centered around the change in the terms of service, but ultimately its about determining how to deal with ownership of personal information.  This is very interesting in that there is the contradiction that it is in fact an advertising-ran system, yet they are dependent on user trust in order to remain relevant.  This is a game that many have lost, including Myspace, Friendster, and others.  Read the article here.