Are privacy problems killing Facebook?

Facebook's US growth and traffic both fell hard in June. It seems Facebook's privacy problems are finally having an impact.

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Inside FB also notes that this might be a blip. Maybe everybody was taking advantage of the fine June weather we had and got out of the house for a change. Maybe somebody misplaced a decimal point in their calculations. But I think not. I think a lot of Facebook users got a sudden wake up call as to what was really happening to their data. And now it’s time for Facebook to get a wake up call.

Listen: I rag on Facebook for privacy violations probably more than anybody. And so far, what Facebook has done really isn’t that bad, relatively speaking. It’s what Facebook might do that worries me. Sharing my music preferences with Pandora or my likes and dislikes with Yelp doesn’t bother me – I already use Pandora, and I don’t give a damn about Yelp.

But sharing my brand preferences with select advertisers without my permission would bother me. Sharing my status updates or my political or religious affiliations with companies like Choicepoint or Experian that Hoover up data and resell it thousands of times for background checks would bother me. To the best of my knowledge Facebook hasn’t done that – yet. But it doesn’t mean they won’t.

One out of three users already regret something they posted on Facebook and other social nets. Imagine how much they’ll regret it if it ends up costing them a job, or a home loan, or insurance coverage.

The best, if not exactly original, metaphor here is the frog in the pot of water. Throw a frog into a pot of boiling water and it will jump out. Throw it into a pot of cold water and gradually turn up the heat until it’s boiling, and you end up with frog stew.

Since its birth in 2004 Facebook has been steadily turning up the heat, sharing more and more of our personal information by default with each new iteration. Last month, it seems, the frog had finally had enough and jumped out of the pot before it (ahem) croaked.

Now we’ll see how Facebook responds. Will it crank down the heat? Or is it already so huge that growth doesn’t matter to it any more? Me, I’m betting we’ll see a lot more boiled frogs before we’re through.

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