THE BLOG
07/21/2013 05:11 pm ET Updated Sep 20, 2013

Facebook Fatigue or Facebook Fracture?

Getty

"The makers of our constitution undertook to secure conditions favorable to the pursuit of happiness... They conferred, as against the government, the right to be let alone -- the most comprehensive of the rights and the right most valued by civilized men."
Justice Louis D. Brandeis (1856-1941)

There's been a lot of online chatter lately about Facebook fatigue. That's what happens when you design a popular platform. Everyone suddenly comes gunning for you. But if you go beyond the rumor mongering, dig a little deeper than the hearsay, you'll discover that Facebook is dealing with something far more serious than the doldrums. Simply put, Facebook is floundering under the weight of its own scorched earth policy towards privacy. This policy has created a growing base of disenchanted users that could cause the company to come crashing down a lot sooner than people realize.

At the root of Facebook's problems is a misunderstanding of social media and its relationship to privacy. Danah Boyd, a senior researcher at Microsoft, correctly pointed out in a Wall Street Journal piece in 2011 that positioning privacy and public platforms as opposing forces creates a false dichotomy. The truth is that people want both. Nothing within the nooks and crannies of the Internet suggests that we can't have both. It's a matter of blending our rapidly changing technology with our rights as law-abiding citizens.

Back in the day when our Founding Fathers stood around in their breeches, frock coats and powdered wigs making laws, they tried to establish democratic principles such as aspects of privacy that could withstand the evolution of our society. A few hundred years later (in 2010 to be exact), Mark Zuckerberg comes along and declares those privacy points and all others, stated or unstated, dead for all law-abiding citizens. I think that's a great model for a dictatorship, but not a democracy. These dangerous beliefs, entitlements to our privacy, are what is driving the current influx of privacy-centric platforms such as Path, DuckDuckGo, and my company, Sgrouples.

In its most recent Consumer Confidence Edition, TRUSTe revealed that 94 percent of U.S. online adults want the ability to control who can collect their personal information and track their activities online. This is not Facebook's modus operandi however, which I think is a fatal mistake. In Facebook's world, all our content is fair game. There's no transparency. That's what makes it's social media's Orwellian Big Brother. Facebook exposes our private data to third-party app developers, including the mining of information without our knowledge through friends who use a Facebook app. It covertly surveys browsing activities on non-Facebook websites that utilize a Facebook "Like" button (regardless of whether you click on the button or not). It data scrapes continuously, inundating us with targeted advertorials to drive our behavior, to profit off of our privacy.

Earlier this month, Facebook completed its roll out a revised search engine that simplifies how people find shared content. That sounds great on paper. The bad news though is that the search engine provides an easier way to dig up information, your information, which may have been overlooked or was previously harder to find.

If that's not bad enough, countless bugs within the platform constantly put our private data at risk. Nir Goldshlager, a leading member of Facebook's "white-hat hacker program" who has personally reported more than 100 bugs, claims that he has received requests from foreign governments offering to buy information on Facebook's vulnerabilities. That won't help me sleep at night. Furthermore, a reported bug last month leaked the private contact information of more than 6 million users. Packet Storm Security, who helped report the issue, estimated Facebook's figure as conservatively low because it failed to incorporate non-Facebook-users who had their contact information uploaded by active users. No, that's not a misprint. Facebook actually stores and correlates information about any uploaded contacts, whether they're a Facebook user or not. Does knowing that frighten you? It sure frightens me.

In a 2012 Associated Press-CNBC poll, three of every five Facebook users said they had little or no faith that the company would protect their personal information. More interestingly, an astonishing 51 percent of young adults consider Facebook a passing fad. What I think should scare Facebook about these numbers is that they're coming not from outsiders, but from the people actually using and supporting its platform. Clearly they're doing something wrong that's impacting user loyalty and trust.

This is more than my opinion here. Usage statistics echo these sentiments. ComScore recently estimated a 4.8 percent drop over six months in unique U.S. visitors. Socialbakers revealed a loss of 600,000 users in Great Britain and a 3.3 percent drop in Australia. Similar numbers are appearing across Western Europe. In fact the only growing numbers are primarily coming from the developing world, which doesn't help Facebook much because of the expected lower monetization per user. In response to these decreased projections by the way, Facebook has stopped posting numbers concerning active users.

Lou Kerner, a social media analyst with a Los Angeles-based investment bank points out that as Facebook nears 50 percent penetration in countries, growth tends to slow. Older people lose interest. Younger people question privacy. "I think more than driving people away, it's (privacy) stopping people from coming," says Kerner. Translation: a smaller influx of new users added to a decreasing active base equals an Internet brand's downward spiral.

So how soon will this demise occur? That's hard to say. Internet brands can rise and fall in the blink of an eye. Based on Facebook's last reported numbers, they have close to 900 million active users. But even that figure is inaccurate because the company defines "active user" as inclusive of non-users who share content with Facebook friends. The bottom line is don't be surprised to pick up your newspaper (to those who still read one), or see on the Huffington Post in the not-too-distant future the last chapter of Facebook as a relevant social media entity. It won't be a tragic ending as much as an important civics lesson in privacy, mainly our own.