Facebook’s climbdown: what’s going on?

Who reads the terms of service when they sign up for a new service?

Well some people do, thank goodness and when the Consumerist blog spotted some heavy handed clauses about ownership of content on Facebook (interpreted as “we own your stuff forever” by many) all hell broke loose across blogs and Twitter accounts in the connected world. Some prominent bloggers, like Perez Hilton even started to organise a boycott of the site.

Facebook’s decided to take the embarrassing step of climbing down and reverting to an old set of Terms and Conditions for now, while it thinks about how to phrase things a little more sensitively.

The whole episode is redolent of the Facebook Beacon episode a while back, when the social network tripped up over revealing people’s online purchases to their friends without their consent. It was a clumsy move and a real setback for Facebook.

Many people are suspicious of Facebook, its scale, its backers, the amount it knows about people using it. They think – rightly or wrongly – that its instincts are to lean toward closed over open, control over collaboration. This latest episode is a setback to Facebook’s efforts to be loved by the digerati.

Marketers meanwhile are attracted by Facebook’s size and the time people spend there, but often confused about where the value is. An effective ad model has yet to emerge, development challenges, API updates and the organisation’s relative immaturity makes it hard work to keep in the game and for them to make sense of the opportunity.

Facebook’s become the biggest social network in the world now by most measures, but its commercial success and longevity as a platform are far from a done deal. The challenge shouldn’t be underplayed of how Facebook delivers value back to its investors – no one has done this before on this scale.

If Zuckerberg et al crack the secret, master the high-wire act of balancing between open networks and commercial success they wll be business heroes forever. Failure will leave Facebook looking like a last mass media model folly, a phenomenon that lasted a few years before its users took their social graphs with them and headed for the freer environs of the open web.

Hence the repeated apologies from CEO Mark Zuckerberg and efforts like the setting up of the Facebook Bill of Rights and Responsibilities (you can join the group on Facebook if you like – 22,000 have done in the few hours it’s been live) to set the record straight.

They need to work hard to re-build and keep the trust of their networks – the bloggers, the brands, the everyday users – in order to keep the Facebook project rolling.

Maybe for future challenges like this Zuckerberg et al need to reverse the process they’ve been through: open up the debate, look for suggestions from the crowd, then bring in the lawyers to see if they can build something that will work…

So, lastly, there are a couple of lessons from this (at least) for brands in social spaces – or rather reminders of what we kind of knew already:

• You don’t “own” a social space, you care for it. It’s another demonstration that when you own and run a social space, a community platform, the community will feel that it is in control.
• Crowds online can be as smart as the smartest people in them. Just because “most people” don’t understand or care much about a particular issue doesn’t mean it won’t blow up. Expert users found this issue and explained to everyone else why it mattered if Facebook owned the rights to your status updates and holiday snaps.