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Facebook Privacy Fail

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The editors at Top Web Design Schools decided to research the topic of:

Facebook Privacy Fail

Facebook has over 1 billion active users, but at what cost?

#FAIL Privacy = Public:

Facebook's mission statement includes: "making the world a more open place," but who really wants it that way?

PRIVACY FAIL #1 2009- Facebook reset their privacy settings without warning.

- General public could see:
- profile picture,
- friends lists
- "About Me" page,
- "Work and Education"
- "Family Relationships"
- date of birth
- "Posts I Create"
- status updates
- links
- photos
- videos
- notes

PRIVACY FAIL #2 After manually switching privacy setting to "Friends Only"

- "Friends Only" did not prevent all personal information from being shared with 3rd party applications or friends of users signed up with 3rd party applications.
- "unfair and deceptive business practices." -Electronic Privacy Information Center (EPIC) (Don't know what this means)
- Today 17% of users still use no privacy settings at all
- 13 million US facebook users have never opened their facebook privacy settings.
- Consequences of unknowingly posting private information publicly?
- - a feed to see facebook updates of individuals with no privacy settings
- On any given day: 4.8 million users post where they would be and when.

PRIVACY FAIL #3 - 2010 Facebook got busted providing users' name, age, hometown and occupations to online ad giants.

- Contracting facebook's own privacy policy section 5: 'we do not share your information with advertisers without your consent'
- Result: Nike Begus's name and picture began showing up on retail sites like Amazon to advertise the product.
- Fail for the future:
- Children's Online Privacy Protection Act (COPPA) prohibits websites from gathering information about children under age 13.
- "That will be a fight we take on at some point... My philosophy is that for education you need to start at a really, really young age." -Zuckerberg
- Today there are over 5 million users are underage with Facebook profiles.

#FAIL Timeline

The things you'd like to forget, Facebook remembers. And then goes and tells everyone.

Facebook put everything on Timeline, it was the users job to clean it up

- When Timeline became compulsory
- 7.96 % like the new feature
- 8.39 % will eventually get used to it
- 51.29 % worried about Facebook Timeline
- 32.36 % don't have a reason for still having a Facebook account
- computer security firm Sophos survey
- Facebook frequently changes its user interfaces, much to the dismay of users, but Timeline was different.
- Not only did it changed the whole fabric of Facebook, it unearthed material from years ago putting many users in an awkward spot.
- Timeline non-optional and once turned on, it could not be undone.

Going public [IPO]: Facebook had to start pleasing shareholders, leaving users high and dry.

- FB Initial Public Offering (IPO)
- $38 per share, 566 million shares traded on first day, market capitalization of $104 billion.
- Dropped to under $18 a share in September.
- Losing more than half its value since the IPO
- $38 - $18 = $20 per share
- someone who owned 100 shares lost = $2,000.
- Has currently only risen to about $27 per share, still down
- "The performance of the stock has obviously been disappointing," Zuckerberg said, "We care about our shareholders."
- The need to appease investors is damaging everyone from blogs to businesses
- Now facebook has to please the over 500 shareholders, meaning increase in prices for consumers.
- The only investors who really made any money from IPOs were already shareholders. Those who purchase FB stock in hopes of an increase in share price such as Google, will not be receiving a big pay day.
- Facebook became more focused on making money, at the expense of users
- paid posts: charging pages to ensure that users see their posts
- more accurate targeted advertising
- Bonus Zucker fail: Zuckerberg showed up wearing a hoodie to the IPO road show.
- if Facebook really is valued at $75-$100b, it will exceed the value of Disney--(not for sure if needed)

Revenue: Putting all your eggs in one basket leads Facebook to out-of-control advertising.

- Facebook as a publicly owned company means they have to increase quarterly revenue to satisfy shareholders.
- Profit driving techniques
- increasing Sponsored stories (ineffective advertising Look at GM, the largest company dropped them 1 week after facebook's IPO)
- Sponsored posts
- How it works and cost per impression
- Before pay posts stats (% of impressions)
- After pay posts stats
- non-paid
- payscale options for costs per #impressions
- "Pay-to-Promote" advertising.
- Currently post only reach about 15% of an account's fans. In order to reach more Facebook gives pages the opportunity to purchase the promotion.
- This form of revenue will only alienate independent companies without the means to pay for promoted posts, leaving already well-off companies to fill up feeds.
- 83% of facebook's revenue is from ads
- advertising costs outweigh the effectiveness, so facebook may have sold information about users to marketing companies
- Facebook has been conducting a study to find connection between user ads and shopping habits. This break in privacy causes a resurrection in the discussion of privacy settings.
- the first three months of 2012:
- sold $872 million worth of advertising
- generated $186 million from Facebook credits for games like Farmville- expected to hit $15 billion by 2014
- User Dissatisfaction: Customers express "dislike" over Facebook's privacy, product and advertising.
- Facebook scored a 61 out of 100 on customer satisfaction on the American Customer Satisfaction Index.
- It was a new record low in the Social Media Category.
- Making it one of the five lowest scoring companies out of the 230 in the report.
- An 8 point drop since 2011.
- With this score Facebook stands below other social media giants like Twitter, Google+, and Pinterest.
- According to the Huffington Post, dissatisfaction stems from privacy concerns, a constantly changing product and the large amount of advertising.