Does Facebook Have a Fatal Cultural Problem?

Updated: Has Facebook lost touch with the core of its user base, and could that spell doom for the social network? In a post at the Harvard Business Review site, Bruce Nussbaum argues that Facebook has, and it could spell doom. The former assistant managing editor for BusinessWeek, now a professor at the Parsons School of Design, says that Facebook has alienated the “millennials” who have been its primary users since its early days as a university-only network by pushing the boundaries of what they are willing to accept in terms of privacy as they have grown up and gotten jobs and started families. This, he says, is a fatal mistake — and even rolling out new privacy controls, which Facebook is currently explaining to legislators in Washington, won’t help in the long run.

In a nutshell, Nussbaum argues that Facebook has failed to adapt and evolve as its core user base has grown up. While millennials might have enjoyed a more open approach to privacy when they were younger and in university, as they have grown older and gotten jobs, formed relationships, etc. they are less interested in — and even hostile to — the social network’s attempts to get them to share more of their personal data. Nussbaum’s viewpoint is based on what he says are responses from his students at the Parsons School of Design to Facebook’s recent changes:

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.

Is Nussbaum right? I’m not sure that he is. Yes, Facebook has alienated some users with its privacy changes, and some have likely canceled or deleted their accounts, as some high-profile users have. And there’s no question that the social network could have implemented its new features in a more open way — including not opting people in by default — and communicated better. But this is not the first time, or even the second time, that Facebook has been through this kind of process. Nussbaum criticizes the network for not evolving, but the reality is that it has evolved considerably from what it once was, and has been testing the boundaries of what people want to share for years now.

That has involved a more or less continuous process of pushing to open things up, getting criticized for it, revising and changing, and so on. We can argue about whether Facebook is trying to change people’s expectations of privacy and sharing or whether it is trying to adapt to them (or likely both), and it’s clear from CEO Mark Zuckerberg’s recent op-ed in the Washington Post that the company plans to keep pushing, because it sees sharing information with others as a positive thing both for users and for society as a whole. But then so do lots of other people, judging by the speed with which Facebook continues to add users. And even some of its harshest critics, such as sociologist Danah Boyd, aren’t prepared to write the network off just yet.

The other flaw in Nussbaum’s argument is that he sees the millennials who have grown up now as the core of Facebook’s user base, and losing touch with them as a fatal flaw. Given that the network now has close to 500 million users, and their average age is somewhere in the mid-40s, that group of university students who have grown up with Facebook haven’t been the most important segment for the company for a long time now — not to mention the fact that every year millions of younger users have adopted the network as a social hub, and continue to do so regardless of the public outcry over privacy.

Does Facebook have issues around privacy? Of course it does, and it has to be careful not to let that snowball turn into an avalanche. But assuming it can continue to evolve and change its approach to adapt to what the bulk of its users want — and mollify legislators so that they don’t impose onerous regulations on the company — those mistakes don’t have to be fatal.

Update: Alan Patrick of Broadstuff agrees with Nussbaum’s take on Facebook and its fatal business model, saying the network is caught between its desire to expose more of users’ data for business reasons and the reluctance of users to do this. Patrick says this creates a vicious cycle in which the network has to continue to push the boundaries of privacy in order to attract advertisers, but the more it does this the more it reduces the likelihood that users will want to comply. What do you think? Let us know in the comments.

Related content from GigaOM Pro (sub req’d): Could Privacy Be Facebook’s Waterloo?

Post and thumbnail photos courtesy of Flickr user Crunchies 2009