Facebook’s Fall from Grace

By Rachael Barthelmes, Intern

Privacy has always been one of Facebook’s largest issues, and most recently Facebook’s ‘Sponsored Stories’ feature has spawned a nasty and expensive lawsuit. ‘Sponsored Stories,’ described by Mark Zuckerberg as the ‘Holy Grail’ of advertising, is a feature that transmits users’ interactions with brand pages to their friends. For instance, if I like OPI’s Facebook page, an advertisement will appear on my friend’s page saying “Rachael Barthelmes likes OPI.” The advertisement will also include my photo and a link to OPI’s page. For advertisers, this model is in fact somewhat of the ‘Holy Grail’ because it allows their ads to appear as ‘friend to friend’ recommendations.

While this feature may be beneficial to advertisers, Facebook users have become enraged that their ‘likes’ are being publicized and used for advertising purposes. As the ‘Sponsored Stories’ feature does not give users the choice to opt out of the feature and does not pay for the right to use Facebookers name for publicity purposes, many users have voiced that they feel taken advantage of and trapped. As a result, five California Facebook users recently took action and filed a lawsuit against the social networking site for violating their privacy and abusing their personal information for profit. The lawsuit was settled under the terms that Facebook will allow members to control which content they feel comfortable being used for ‘Sponsored Stories.’ These changes are estimated to cost around $103m in revenue and will be effective for the next 2 years. Additionally Facebook has agreed to pay $10m to charity as part of the deal.

Many of us wonder about Facebook’s future, regarding how long it will last and what direction it will head in, particularly in wake of this recent lawsuit I’m stuck wondering if Facebook will every truly be able to escape these constant privacy battles. Facebook’s ‘Sponsored Stories’ lawsuit is far from their first privacy upset; most memorably, back in 2010 for example Facebook found themselves in another scandal when applications like Farmville, FrontierVille, and Texas HoldEm Poker were leaking users’ personal information to advertising companies. Balancing garnering profit for the site and keeping users happy has proved to be Facebook’s biggest hurdle, and I worry that it will be its downfall. What do you think Facebook’s future holds? Will Facebook flop like MySpace? Or will it continue to grow into the next Google Empire?

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