The Secret Cost of Using Facebook

Facebook CEO Mark Zuckerberg speaks at a conference in San Francisco on April 21, 2010 Marcio Jose Sanchez / AP

If you don't spend your days glued to tech blogs, you might not know about the latest trend among hipster techies: quitting Facebook. These folks, including a bunch of Google engineers, are bailing out because Facebook just changed its rules so that much of your personal profile information, including where you work, what music you like, and where you went to school, now gets made public by default. Some info is even shared with companies that are special partners of Facebook, like Yelp, Pandora, and Microsoft. And while there are ways to dial back on some of this by tinkering with your privacy settings, it's tricky to figure out—intentionally so, according to cynics.

The fear is that people are being lured into Facebook with the promise of a fun, free service, and don't realize that they're paying for it by giving up loads of personal information. Facebook then attempts to "monetize" one's data by selling it to advertisers that want to send targeted messages.

Most folks using Facebook have no idea this is happening. Even if you're very tech-savvy and do know what the company is up to, you still have no idea what you're paying for Facebook, because people don't really know what their personal data is worth.

The biggest problem, however, is that the company keeps changing the rules. Early on, you could keep everything private. That was the great thing about Facebook—you could create your own little private network. Last year, the company changed its privacy rules so that a lot of things—your city, your profile photo, the names of your friends—were set, by default, to be shared with everyone on the Internet. Sure, you could change everything back and make it private. But most people probably didn't bother. Now Facebook is going even further by insisting that unless you agree to make things like your hometown, interests, and friends' names public, then you can't list them at all.

The whole kerfuffle is a misunderstanding, according to Elliot Schrage, Facebook's vice president of communications and public policy. In his version of events, the company is simply making changes to improve the service it provides to users by giving them more "granular" control over what they share, and if people don't share information they have a "less satisfying experience." Facebook is innovating so rapidly, he says, that people don't fully understand what the company is doing, and that change is scary.

Some critics think this is more about Facebook looking to make more money. Its original business model, which involved selling ads and putting them at the side of the page, totally flopped. Who wants to look at advertisements when they're online connecting with their friends? Facebook denies that financial motives drove the changes. "Of all the criticisms, that's the one I find most distressing—that anything we've done is damaging to users in order for us to make more money," says Schrage.

And not everyone thinks it's such a bad thing to have less privacy online. Some users, like Robert Scoble, ap-plauded Facebook's new policies. "I wish Facebook were MORE open!!!" he wrote on his blog. "I haven't cared about privacy for years."

But others are saying that this isn't what they signed up for when they joined. The privacy issue has already landed Facebook in hot water in Washington. In April, Sen. Charles Schumer and two other senators called on Facebook to change its privacy policy. They also urged the Federal Trade Commission to set guidelines for social-networking sites. In May, a group of 15 online-privacy groups filed a formal complaint with the FTC accusing Facebook of "unfair and deceptive trade practices." "I think the senators rightly communicated that we had not been clear about what the new products were and how people could choose to use them or not to use them," Schrage concedes.

Losing a few people won't hurt Facebook, which has more than 400 million registered members, most of them oblivious to the debate over privacy. In fact, I suspect Facebook will end up being to this decade what Microsoft was to the 1990s—an ever-more-powerful company with tentacles that reach into everything. I also suspect that whatever Facebook has done so far to invade our privacy, it's only the beginning. Which is why I'm considering deactivating my account. Facebook is a handy site, but I'm freaked by the idea that my information is in the hands of people I don't trust. That is too high a price to pay.