THE BLOG
02/21/2014 12:32 pm ET | Updated Apr 23, 2014

WhatsApp With Facebook?

A few weeks ago, Facebook marked its tenth anniversary with Look Back videos and a self-congratulatory letter by company founder Mark Zuckerberg. That same week, in what could only be termed as the epitome of irony and poor timing, Princeton's Department of Mechanical and Aerospace Engineering released a study suggesting Facebook could lose upwards of 80 percent of its peak user base by the end of the decade. Talk about a buzzkill.

So if you're Facebook, how do you respond? Ignore the study and refuse to dignify the results with a response? That's too mature. Formulate a detailed rebuttal supported by verifiable statistics and data? That's too logical. How about belittle an Ivy League institution and then go on a 19 billion-dollar spending spree to uplift your spirits and try and shore up your deteriorating constituency? Clearly that would be crazy, irrational, and reeking of desperation, which of course is why that's exactly what Facebook did.

Pulling a page from the Vatican's prosecution of Galileo, Facebook's data scientists struck first by mocking the messenger, in this case Princeton, along with the entire field of statistical analysis through a satirical study of Princeton's decreasing student body. The point was to illustrate "a fun reminder that not all research is created equal -- and some methods of analysis lead to pretty crazy conclusions."

True, not all research is created equal, but the difference here is that unlike Princeton's study, Facebook's hi-jinx humor didn't provide any. You'd think if those comedic data scientists had enough time on their hands to poke fun at Princeton, that maybe they could have also found time to generate evidence to support the relevance of their own company. Of course if there is no evidence, then that creates another problem.

The point of the Princeton paper was to examine online social network dynamics, not to deliver a sermon on the mount about a countdown to the end of days for Facebook. If indeed, the study had concluded that Facebook's relevancy would outlive cockroaches not to mention space and time, would Facebook have decided to respond in parody or might they have chosen to anoint the study as a Nobel Prize worthy treatise on social media?

More important, if Princeton's report did not represent an iota of truth, would Facebook have felt the need to go out and acquire WhatsApp for $19 billion? Consider these interesting facts. Facebook spent six times the amount it offered for Snapchat for an application that Snapchat outpaces in terms of time-spend per user. The price tag is more than double its own annual revenue, and this for a chat program that has little revenue. Furthermore, Facebook basically just bought WhatsApp's 320 million active users for close to $50 a seat. In comparison, Rakuten an Internet commerce company, just spent $3 a user for message application Viber's 300 million users. Suddenly that WhatsApp deal smells all the fishier.

Here's the simple truth. Facebook has failed to keep their eye on the prize, focusing on advertorial profits instead of its true profit source; its user base. Call it Facebook fatigue, Myspace-itis, or the social media blues, the fact remains that the company has lost the coveted youth market to more enticing apps (including the one it just bought) and angered their remaining core base with a scorched earth policy towards privacy.

Yes privacy, Facebook's Achilles heel. As Michael Zimmer pointed out in a recent Washington Post editorial, the problem with Zuckerberg's privacy philosophy is users are losing control of their information to advertisers and third-party platforms. In his latest attempt to circumnavigate the issue, Zuckerberg reframed the loss of privacy as the gaining of a shared world community that can solve the world's problems. Lost in this argument of course is that in sacrificing our privacy as the means to achieving the desired and positive end negates the power of the conclusion itself.

The worst type of invasion of our privacy is the acceptance of the invasion of our privacy. The truth is that the majority of people are neither naïve about Facebook's privacy challenges nor particularly loyal to the social network platform, further supporting Princeton's study. Consider the results of these polls:

• According to Pew Research from December 2013, while Facebook remains the dominant social networking platform, a striking number of users are now diversifying onto other platforms.
• According to a November 2013 Global Web Index report, Facebook's active usage in 2013 has declined from quarter to quarter.
• According to Piper Jaffray's semi-annual report on the habits of teens, only 23 percent of teens currently deem Facebook as the most important site as compared to 42 percent a year ago.
• According to a Reason-Rupe September 2013 national survey, more people trust the IRS to protect their privacy than they do Facebook.

If Facebook refuses to address the elephant in the room, then we must. Now that Facebook has violated consumer trust, they will be hard-pressed to earn it back. Even if they continue to acquire some of the trendiest applications in the marketplace, those applications by default will be branded as Facebook property and will lose face in terms of users and privacy advocates alike.

The lesson here is that contrary to Facebook's beliefs, we are not products, but rather social people who want to control how we share our lives and protect our privacy. As the Red Sea in social media parts, we are left to choose which side to swim in. Will we drown along with our rights in a sea of advertising and profiteering, or will we swim in the calm waters of social media innovation where socializing and privacy calmly float together towards the same shores?