Two Canadian campaigners have declared 31 May as Quit Facebook Day in protest at the company's decision to make more of that valuable personal data available to advertisers without the users' permission or, in some cases, without their knowledge. Their protest reflects a growing feeling of unease about how internet giants such as Facebook and Google, and upstarts like Twitter, use the information we give them.

It also completes a miserable few weeks for Facebook's 26-year-old founder Mark Zuckerberg, the whiz-kid who lists "openness", "revolutions" and "making things" in the interests section of his own Facebook page. Zuckerberg is facing a rebellion by users over privacy and has been warned by regulators in Europe and the US that the company may be in danger of breaching data protection laws.

Worse still, a new Hollywood film produced by Kevin Spacey, The Social Network, is set to portray an even younger Zuckerberg, who set up Facebook six years ago after being dumped by his girlfriend while studying at Harvard, as a sexually insecure computer nerd.

For the first time there is a danger that the fairytale about the man from White Plains, New York, who turned a site for his college friends into a global phenomenon might not have a happy ending.

In truth, the great Facebook revolt is unlikely to happen overnight. The social networking site is weeks away from announcing its 500 millionth registered user and is still expanding at a healthy rate. Nearly 40% of the world's internet users have a Facebook page they have visited at least once in the past month and it is not just the young who use it; 28% of the site's users are older than 34, a demographic that has plenty of cash to spend.

In terms of scale, if not profits, Facebook is second only to Google. A small rebellion by a few thousand users is unlikely to dent its prospects. Yet recent changes to the site's privacy settings, which determine how much personal information users can keep hidden, have prompted an outcry that senior executives, Zuckerberg included, cannot ignore.

At a stroke, the company made most of that information accessible to other users by default last month, although it continued to allow subscribers to apply restrictions to who can see what, should they choose to. Those "privacy settings" are complicated to change, however – users are faced with a menu with up to 150 options – and few can work out how to do so; many have concluded Facebook is simply trying to hoodwink consumers into sharing more information than they would like. For an internet company that has built its reputation on honesty and openness, and grown rapidly by exploiting the good feeling that surrounds a medium in its infancy, there can be few more damaging allegations.

A routine executive meeting at Facebook's Californian headquarters earlier this month turned into an emergency discussion about privacy amid fears that pushing through the changes without consultation might do irreparable damage to the company. Simon Davies, a former consultant turned privacy campaigner who knows most of Facebook's senior management team, says: "My information from the people who participated is there is a sense the company has gone off the rails somewhat and realistically it could go downhill. The feeling in the meeting, as I understand it, was that, right or wrong, [the] privacy [issue] was damaging the company and that, right or wrong, something has to change."

The company is likely to simplify its privacy settings, possibly as soon as this week. It is reported to be planning to introduce a "master control" that would simplify users' privacy settings. Users would be able to choose which groups of people they wished to share information with – everyone, friends of friends, or just friends. This would replace the automatic system that shares users' information with third parties.

The planned move acknowledges the fact that, as Zuckerberg told Time magazine: "What people want isn't complete privacy. It isn't that they want secrecy. It's that they want control over what they share and what they don't."

This may not assuage wider concerns about how our digital footprints can be exploited, however. The novelty of tracking down an old school friend or boasting about how many people attended your birthday party has given way to anxiety over whether we might have given away too much. Facebook has been criticised for failing to address concerns that paedophiles are using the site to identify and "groom" potential victims.

"It has been exposed to more public relations problems in the last 18 months than any social network business can bear," Davies claims. Potentially more serious, however, is growing anger among Facebook users over the company's determination to mine their personal data for commercial gain.

The company's office campus, in Palo Alto, a community of 50,000 people in the San Francisco Bay area, is a large but unremarkable space that was once occupied by computer giant Hewlett Packard. It's open plan and with high ceilings, and employees can break off from their work to play table tennis; bikes litter the floor; and some of the lifts have been painted by a New York graffiti artist.

Visitors describe the atmosphere as "orderly yet bohemian". Yet behind the trendy façade, the company is carrying out a prosaic task, collecting information for what is in effect the largest and most sophisticated direct marketing exercise ever undertaken. Facebook is handing over information about its users' favourite films, brand of coffee, what car they drive, even their shopping habits, to companies that will pay handsomely for it. Selling data to "third parties" underpins the company's business model, which, like that of many internet companies, is built on acquiring huge scale and reach quickly, then making money later.

The company is worth about £10bn, but that valuation is based on optimistic expectations about future profits. Banner advertising can generate only so much cash. If shareholders, including Microsoft (which paid £117m for a 1.6% stake in 2007) are to see a return on their investment, Zuckerberg must persuade users that even a free service like Facebook comes with a price – in this case allowing big corporations a glimpse of their spending habits.

Facebook users did not sign up in order to be targeted by marketers, of course, and the internet has proved resistant to overt commercialisation in the past. When Rupert Murdoch's News Corp bought MySpace for $580m in July 2005, the company used it to plug its own products and the site's hip audience of teenage music fans soon began to search for other online hangouts.

Most observers predict that Facebook is too well established to go the way of Friends Reunited, Bebo or Excite, internet fads that failed to turn overnight popularity into lasting success. But if Facebook flirts too brazenly with commercial partners, it may see its growth slow down dramatically.

On his own Facebook profile, Zuckerberg demonstrates he still has the right credentials to claim membership of the IT fraternity by listing The Matrix, Dark Knight, Iron Man and Star Wars among his favourite films. The enigmatic Facebook founder also lists "eliminating desire" as one of his interests, alongside "breaking things".

Breaking Facebook now would be a remarkable achievement, given its global dominance. But in order to fix it, Zuckerberg must resolve the tension between what users want to tell Facebook about themselves and what Facebook wants to tell other companies about them.

TROUBLED HISTORY

2004 As Facebook grows in popularity at Harvard, fellow students sue Zuckerberg, claiming he copied ideas and code from their social networking site ConnectU.

2006 With nearly 10 million users, Facebook launches a "news feed" application displaying users' recent activity on their friends' home pages. Members campaign against the "invasive" feature, prompting Zuckerberg to publish an apology and introduce privacy options to allow users to decide what is shown.

2007 Six major firms, including Vodafone and Virgin Media, withdraw adverts from the site after their ads appear on pages for groups linked to the BNP.

2008 Campaigners call on Facebook and other social networking sites to clamp down on pro-anorexia groups after experts say that such groups have played a significant part in young people developing eating disorders.

2009 Accused of being a tool for cyberbullying and cyberstalking after users are attacked by people they met on the site. Teenager Keeley Houghton becomes the first person in Britain jailed for posting death threats on the site.

2010 After the number of complaints alleging grooming and bullying on the site quadruple, British police accuse Facebook of "arrogantly" ignoring children's safety. The site is blocked in Pakistan after a contest entitled "Everybody Draw Mohammed Day" provoked street demonstrations. The decision to open Facebook data to third-party websites drew widespread criticism, including a letter from the European commission.

Source >  Guardian