It's Business, Not Privacy

Last week Facebook said that they would no longer support Google Friend Connect. Apparently there were a number of disputes between Google and Facebook behind the scenes but publicly Facebook claims that they won’t support Google Friend Connect due to privacy concerns. The reality is that it’s business strategy. Ultimately the new Google Friend Connect service acts as an intermediary between social networks and external social applications that reside on third-party websites.

It’s a great notion but the reality is that is reduces the ability of Facebook to track what is taking place on external sites. Tracking the applications on third-party websites is one of the most import features of Facebook Connect. Additionally, applications can update the Facebook newsfeed in turn helping those applications promote external websites. Facebook’s support of Google’s new standard will prevent information from being tracked via the Facebook newsfeed.

While it’s in the user’s best interest to be able to export their friends to other sites, it’s not in Facebook’s best interest to let you do that without them knowing. Why? Well if you go and use your data to participate in other activities around the web, Facebook isn’t able to keep track and in turn their newsfeed can be accurately updated. Is all information about your social interactions going to travel through Facebook?

Not necessarily but as Friend Wilson pointed out yesterday, it’s not the data, “it’s the flow of the data through the service.” If Facebook opens up to Google Friend Connect, it means that social activities will take place on the web under the approval of Facebook but without Facebook’s knowledge of what’s happening. We surely can’t have that happening!

Sure, people have figured out ways to export Facebook’s friend data but it requires a hack and is not technically allowed under Facebook’s terms of service. If you can figure out a way to get that data from Facebook, great! Facebook doesn’t want to openly let other people use data provided by its users to have interactions not under their control.

It’s an ironic position. Facebook opened up their platform and gave developers an almost equal opportunity to compete for user attention. They are about to do this for applications residing on third-party websites as well. In my opinion, Facebook’s concerned that opening up the data completely will somehow reduce their valuation. What I’ve come to realize over the weekend is that it doesn’t. We live in the attention economy and even if Facebook completely opens up, they will still have our attention.

That’s because as Fred Wilson puts it, “provides an incredibly valuable service.” The challenge that Facebook faces is one that many other sites (such as Twitter) face. How do we effectively monetize attention? The television used to place ads in between our television shows but that won’t work in an on demand world. I can’t believe I’m saying this but Facebook may turn out to be the emperor with no clothes.

Facebook has created one of the most valuable communication platforms on the web (outside of their horrific messaging system). This has led them to become one of the leading sites on the web globally. They still face the problem that many other web-based social services face: how do you monetize social? Earlier this weekend I argued that data portability kills social network sites. The reality is that it doesn’t, it just strips of those sites clothes.

That’s the only reason Facebook isn’t going to jump in and embrace total data portability. Would you strip naked for the world to see if you didn’t have to?