Privacy says the Age of Facebook is over?

Mark Zuckerberg arguing that lack of privacy is the natural state of things - Read Write Web:

....in the last 5 or 6 years, blogging has taken off in a huge way and all these different services that have people sharing all this information. People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people. That social norm is just something that's evolved over time.

"We view it as our role in the system to constantly be innovating and be updating what our system is to reflect what the current social norms are.

"So now, a lot of companies would be trapped by the conventions and their legacies of what they've built, doing a privacy change for 350 million users is not the type of thing that a lot of companies would do. But we viewed that as a really important thing, to always keep a beginner's mind and think: what would we do if we were starting the company now, and starting the site now, and we decided that these would be the social norms now and we just went for it."

This has allegedly been a change from the early Facebook ideology:

This is a radical change from the way that Zuckerberg pounded on the importance of user privacy for years. That your information would only be visible to the people you accept as friends was fundamental to the DNA of the social network that hundreds of millions of people have joined over these past few years. Privacy control, he told me less than 2 years ago, is "the vector around which Facebook operates."

So - merely reflecting Social Change, or is Facebook making the change deliberately itself? Bear in mind that this form of lack of privacy is very beneficial to Facebook financially, as it makes the system a marketeers dream, so there is a certain sense of "he would say that wouldn't he". It is striking that just as Facebook is arguing more that "Privacy is Dead", just as we are seeing additional concern about privacy overall.

We've been following Facebook for 2 odd years now, and I think there are 3 points to make looking at their overall behaviour:

(i) Facebook was probably never that privacy friendly, just looking at its original T&C it clearly always had in mind the game of grabbing content to re-use as they see fit. In the early days they no doubt had to put on the sheeps clothes of being privacy friendly because hats what users wanted, but Beacon showed the wolf underneath.

(ii) Their behaviour from Beacon on has shown a steady progression in attempting to reduce privacy, despite continual user resistance. Its been a two steps forward, onse step back process.

(iii) Now that they have taken in large amounts of investor money at ridiculous valuations, the pressure is on to IPO - and thus to find a business model that justifies a ridiculous valuation. What better than a rationale that says 400m plus people's data has a "right to scrape" tag on it for all marketeers?

So here is a possible scenario - Facebook is driving for an IPO as its backers want payout before the inevitable emergence of the Next Great Social Network devalues it - they have seen the rules via Bebo and MySpace and Last.fm - and thus all hands are being put to the pumping of its prospective stock price. The aim is to drive to a peak of value before the (slower moving) dynamics of privacy worries catch up with them. The cry is "Apres moi les Deluge" - as with every pump comes the dump, but of course by then the people who have gone through the IPO have the brass in pocket.... leaving the new owners with the problem of a service which has created a reputation for abusing its user privacy at about the same time as "Next Gen" social nets start to emerge.

Update - this reminder from Howard Lindzon that (i) Facebook is not the first to attempt privacy scraping and (ii) follow the money:

The age of privacy did not end in 2004 with Facebook and the social web.

Equifax, Transunion, Capital One, American Express and their cousins raped our privacy and Facebook is a long overdue new competitor in a new age of what I would call ‘User Controlled Privacy’. If we are lazy, Facebook could be really big and powerful and we will be very aggravated with them.

Our spending habits are what is worth the most money. Our intentions are what is worth the money. It is why Mint.com could so quickly sell for $170 million and may have been really cheap. I long to see some real competition to Equifax, Capital One et al and Facebook and Twitter could take the lead in this. I would love to see a new system, but I don’t live in fantasyland and Equifax will not go quietly.

For now, Facebook can make a killing off gossip and dating leads. There are a few lost jobs from drunk tweets. But so far, they have 300 engineers, Russia owns them and I am worried that my phone bill could be $1 trillion from my daughter playing Farmville.

When Facebook has to deal with the government, the lobbyists and the lawyers at Equifax and Transunion, I may start to listen to Mark Zuckerberg.

The point about financial data being the real golden goose is important to keep in mind. Next step, Facebook buys Mint or somesuch?

Update - thoughtfully nuanced counter-argument by fellow Tuttler Joanne Jacobs.