Does Facebook want to be a public utility?

August 4, 2010

“When I say utility, I mean we are trying to provide people with utility. Our goal was never to build something cool. It was to build something useful.” – Mark Zuckerberg, CEO


In the wake of Facebook’s recent privacy setting change debacle and last week’s public outing of 1/5 of FB’s user info by a well known hacker, there is a question that needs to be addressed that will have a profound effect on the future of the company:

Does Facebook want to be a consumer-based company or a public utility?

Facebook - the public utility

In its headlong rush for growth and aggressive goals for “opening up” user information for use by its advertisers, it is evident that Facebook put aside the needs of its users and their concerns for privacy.  A recent poll shows that a full 80% of Facebook users are concerned about the privacy of their personal information on the site.  But what is even more telling is that polls prior to the introduction of the confusing changes in privacy settings last May showed that a majority of users already had these concerns.

Rather than enacting policies and making statements to address these concerns, Zuckerberg seemed to do an about-face from his past statements about maintaining strict controls over the privacy of its users’ information.  Back in January 2010 he said:

“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 kind 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 what would we do if we were starting the company now and we decided that these would be the social norms now and we just went for it.”

This seems like a particularly naive statement: where is the data to back up his idea that “social norms” dictate an opening up of personal information to be shared by all?  Independent survey data certainly did not support it.  Zuckerberg’s recent statements sound a lot like he stopped thinking about the company as a choice for consumers.  Instead, he has taken on the mindset of an 80s-era public utility CEO: we will decide what is best for our users unless and until the government steps in and regulates us.

As a user experience practitioner it is hard for me to accept that those updated user settings were vigorously tested (see this excellent chart created by The New York Times showing FB’s 170 privacy options).  A skeptic might even say that they were pretested to make sure that they were as confusing as possible to the average user.

Still, Facebook provides an incredibly powerful experience for many users (myself included) and its user base continues to grow, just passing the half billion mark. It is understandable that the company needs to increase its revenue from advertisers to fulfill its business model and reach profitability.  The question is, can the company continue on this same path without the full trust of its users or will it be bested by another technology – maybe someone we haven’t even heard of yet?

The answer to this question is inextricably tied with the first one I posed at the beginning of this post. The future success of Facebook will be highly dependent on whether Zuckerberg and co. are able to demonstrate that their users come first and advertisers second. Some suggestions:

Test and re-test: There is a way to set up privacy settings that can satisfy both users and the needs of advertisers.  The only way to get there is to do user testing across a broad range of user personas, including those based on attitudes re: “trust.”

Hit the road: Zuckerberg should communicate to the world beyond his FB page posts (yes, old media still works – why else write an op-ed for The Washington Post?) and speak directly with users about the company’s goals for the future and its plans for securing users’ data.

Be patient: the company is sitting on a goldmine of information that can be beneficial to users in discovering cool stuff and allow advertisers to reach their target users more effectively.  But it may take some time to work out a system that will please everyone.

2010 may be remembered as the year Facebook and its young CEO grew up.  Or it could be remembered as the beginning of the end.  Only its users will decide.

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Reasons to be grateful: “random acts of generosity” for ecommerce

June 22, 2009

Interesting article in Sunday’s New York Times Magazine about Hyatt’s new “random acts of generosity” marketing approach:  by offering their guests random freebies like free massages and drinks during their stay, Hyatt hopes to win over grateful customers and keep them loyal.  From the article …

Its even better to give ...Jeff Zidell, the vice president who oversees Hyatt’s Gold Passport program, underscores the importance of surprise — both that the favors are “unexpected” and that there’s no discernible pattern to which customers will get them.  The hope seems to be that these grateful customers will reward the chain with future business and also spread positive word of mouth.”

Building generosity into ecommerce

Companies building online interfaces for e-commerce should take note:  inserting seemingly random acts of generosity into the online experience could add up to big wins in terms of enhanced user experience.  Some of the ways companies can do this might include:

  • Save some “specials” or “giveaways” for later in the shopping process, perhaps during check out rather than promoting them up-front.  Specials might include price off or free shipping, a discount off of an additional item, etc.
  • A free coupon for their next order inserted into the package or even a free (low cost) item included right in the box.  Sort of like getting a “free” prize in the Cracker Jacks box, only you weren’t expecting it.
  • A follow up email after the purchase of a high ticket item with a generous offer attached.
  • Random “notes of kindness” sent via email to loyal customers with a coupon offer attached – even if it isn’t attached to a particular sale.

As Hyatt and the researchers that have studied the role of gratitude as it relates to customer loyalty have  discovered, customers like it when companies offer them an unexpected benefit.  And these random acts can add up to big benefits for your company at a time when customers have less money to spend and more places to spend it.