[LINK] HBR: 'Facebook's Culture Problem May Be Fatal'

anthony.w.hornby at gmail.com anthony.w.hornby at gmail.com
Wed May 26 23:07:43 AEST 2010

Interesting analysis - thanks for sharing

Regards Anthony

On May 26, 2010 10:10pm, Roger Clarke <Roger.Clarke at xamax.com.au> wrote:
> Facebook's Culture Problem May Be Fatal

> http://blogs.hbr.org/cs/2010/05/facebooks_culture_problem_may.html

> Bruce Nussbaum

> The Conversation Blog

> Harvard Business Review

> 4:28 PM Monday May 24, 2010

> Facebook's imbroglio over privacy reveals what may be a fatal

> business model. I know because my students at Parsons The New School

> For Design tell me so. They live on Facebook and they are furious at

> it. This was the technology platform they were born into, built their

> friendships around, and expected to be with them as they grew up, got

> jobs, and had families. They just assumed Facebook would evolve as

> their lives shifted from adolescent to adult and their needs changed.

> Facebook's failure to recognize this culture change deeply threatens

> its future profits. At the moment, it has an audience that is at war

> with its advertisers. Not good.

> Here's why. Facebook is wildly successful because its founder matched

> new social media technology to a deep Western cultural longing — the

> adolescent desire for connection to other adolescents in their own

> private space. There they can be free to design their personal

> identities without adult supervision. Think digital tree house.

> Generation Y accepted Facebook as a free gift and proceeded to

> connect, express, and visualize the embarrassing aspects of their

> young lives.

> Then Gen Y grew up and their culture and needs changed. My senior

> students started looking for jobs and watched, horrified, as

> corporations went on their Facebook pages to check them out. What was

> once a private, gated community of trusted friends became an

> increasingly open, public commons of curious strangers. The few,

> original, loose tools of network control on Facebook no longer proved

> sufficient. The Gen Yers wanted better, more precise privacy controls

> that allowed them to secure their existing private social lives and

> separate them from their new public working lives.

> Facebook's business model, however, demands the opposite. It is

> trying to transform the private into a public arena it can offer

> advertisers. In doing this, the company is breaking three cardinal

> cultural norms:

> 1. It is taking back a free gift. In order to build profits, Facebook

> has been commercializing and monetizing friendship networks. What

> Facebook gave to Millenials, it is now trying to take away.

> Millennials are resisting the invasion to their privacy.

> 2. Facebook is ignoring the aging of the Millennials and the

> subsequent change in their culture. Older Gen Yers want less

> sociability and more privacy as actors outside their trusted cohort

> enter the Facebook space in search of information and connection.

> These older Millennials want more privacy tools for control of their

> information and networks.

> 3. Facebook is behaving as though it owned not only its proprietary

> technology platform but the friendship networks created on it. It

> doesn't. Millennials believe that ownership of their networks of

> friends belongs to them, not Facebook, and resist their

> commercialization.

> Facebook, under intense pressure, is belatedly agreeing to streamline

> and strengthen its privacy tools. That will lower the anger of its

> audience but increase the anxiety of its advertisers. The brand value

> of Facebook has already taken a hit and competing social media

> platforms that promise privacy are beginning to appear.

> What lessons can we draw from the Facebook flameup? Lifecycle changes

> can trump generational change and cultural values perceived as

> crucial at the age of 13 can be very different at 20. A business

> founded on the values of a generation, such as Facebook, has to keep

> up with, and respect, evolving lives and needs.

> Ownership in the social media world of networks is different from

> selling products and services in the traditional marketplace.

> Understanding the underlying cultural context of "free," "gift," and

> "creation" is important to businesses, including and perhaps

> especially high tech companies. It is not impossible to monetize that

> which is free. Apple did that with 99 cent songs on iTunes. But it is

> difficult.

> Giving economic value to social networks is the new holy grail in

> advertising and the media. An army of economists and mathematicians

> are at work on this task. To date, most of the work has focused on

> metrics — how many friends, how many linkages, how much influence.

> Facebook's problems with privacy highlight the need to understand

> culture as well.

> --

> Roger Clarke http://www.rogerclarke.com/

> Xamax Consultancy Pty Ltd 78 Sidaway St, Chapman ACT 2611 AUSTRALIA

> Tel: +61 2 6288 1472, and 6288 6916

> mailto:Roger.Clarke at xamax.com.au http://www.xamax.com.au/

> Visiting Professor in the Cyberspace Law & Policy Centre Uni of NSW

> Visiting Professor in Computer Science Australian National University

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