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Facebook: Microsoft deja vu?

There are increasing parallels between Microsoft’s strategy in the 1990s and Facebook’s today. Microsoft didn’t rise to the top of the industry by being nice. Whenever they could, they expanded aggressively, seized opportunities, and eliminated any potential competitors. In particular, Microsoft pushed their solutions, applications and APIs on to the market. When the network effects started to play in their favor during the tornado phase, they ignored normal market rules about being responsive to customer needs and preferences. All that mattered was what was best for Microsoft.

This created a situation where most early adopters, thought leaders, and people in the IT-industry itself loathed Microsoft, their inferior technology and their simple solutions for the mass market. However, the mainstream market ignored the warnings from the IT elite and gladly adopted Microsoft’s proprietary solutions which they were spoon fed by the distribution channels.

Now history is repeating itself, with Facebook in the same role as Microsoft. The massive privacy invasions carried out by Facebook are every bit as evil as Microsoft’s dirty tricks. The tech community, civil rights activists and privacy advocates are highly critical. There are signs of a backlash. Many people are uneasy and upset about the changes to Facebook and the insidious invasion of their privacy. As they begin to understand the extent to which their privacy is being infringed upon, users are choosing to make their Facebook accounts more and more impersonal. Some are even using aliases instead of their real names in an attempt to protect their privacy.

There is no user value in giving up your privacy. Users don’t ask to have their personal data made transparent. If they want their information to be public they can change their privacy settings. Most choose not to. But there is huge value for Facebook to push or trick users into accepting that their personal data is a commodity owned by Facebook. The language in the Facebook account settings and help pages is deceptive and often confusing. The slick rhetoric and complicated settings are all part of Facebook’s goal: to get you to give up as much of your privacy as possible – sometimes without even informing you.

However, just like the Microsoft case in the 90s, I think the majority of people will continue to use Facebook anyway. Most users seem not to care or do not understand when Facebook makes stealth changes in the user privacy settings from opt-in to opt-out or exposes their user data to external partners.

Users may dislike Facebook’s bullying but it is probably the smartest strategy for the company. User data is a gold mine for Facebook and it will probably provide advertisers on third party websites with even better customer data than what Google can offer.

The old controversy about Microsoft will most likely be dwarfed by future Facebook controversies. Facebook seems destined to engulf the open internet. Their intent seems to be to collect the user data and social graph for the richest billion people on the planet in order to eliminate their privacy. They are well on their way to achieving this goal and considering how many users are addicted to Facebook, Zuckerberg seems unstoppable.

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