It's an odd feature of the internet business world that, over and over again, a genius idea erupts on the scene and then, like a little Mount St. Helens, blows it's own top off simply because it isn't prepared to deal with its own internal growth pressure.
The nits of what undoes these internet products and their companies rarely is technical. A good idea can survive technical glitches -- remember Twitter being crushed by volume over and over? But users kept coming back to the good idea.
Usually what undoes these guys is something like adolescent arrogance. Thinking that because you're getting really big, really fast; that this also means that you must be really smart and grown up too. That you know what's best.
Facebook is on the verge of becoming yet another genius product that self-destructs because didn't know how to deal with itself. It doesn't know how to behave itself in company.
The particulars for an internet business failure most often come down to a screw up in the relationship between the business and it's users, and that's the case with Facebook too. The particular issue for Facebook is wrapped up in user privacy and matters of what is "private data", who owns it and what can be done with it.
Facebook has, in the American style, been quite cavalier about consumer privacy rights. Though it has, from time to time, said otherwise, Facebook has always acted as if it can do whatever it wants with its users' private data, including -- quite brazenly -- claim that it, Facebook, owns its users private data.
Over the years that Facebook has existed there has been a back-and-forth of words between Facebook and its users, or Facebook and privacy advocates; but none of this has ever effected how Facebook has actually really behaved with consumer private data. Facebooks' partners and application building associates can pretty much grab any user data that they want and then do anything they want with it -- including pass it around to other parties that have nothing to do with the relationship between Facebook and its consumer users.
Through most of Facebook's history the product has so good, so compelling, that the users, as a group, have either ignored or just put up with Facebook's casual use of their data. In the last year or so, though, the relationship has been changing.
The words of popular techie critics -- not just privacy advocates, but the mass-media geeks -- have started to register with consumer users of Facebook Even Pogue has noticed that Facebook has problems with privacy.
At anytime in this history Facebook could have tried to fix the problems. That is, they could have looked at the privacy problems and fixed them as problems having to do with protecting consumer privacy. Instead, Facebook looked at these as being problems of consumer perception -- that the consumers weren't seeing that it was OK for Facebook to do whatever it wanted.
For the most part, Facebook's "solutions" have been either changes to the language of their monumental privacy statement -- the gist of which is: "if you post it, we own it" -- or cosmetic changes to the ways that users can chose what can be disclosed and to whom. The only real functional changes to private data controls over this time have been to make it easier for programmers to get to and harder for consumers to protect.
So now we come to the make or break time in Facebook's history -- if we haven't already passed it -- when Facebook has the chance to do the right thing by consumer privacy and, in the process, save itself, or continue on the adolescent path of ignoring all around it because it is big enough to do whatever it wants.
Will we see Facebook making its way to join the grownups, with Google and Yahoo, or will Facebook be waving to its friends MySpace and AOL as it walks into the wall?