Facebook flaw that could be fatal

Upstarts look to swat Facebook from its lofty perch, but the social network may be its own worst enemy.

By TheStreet Staff Oct 6, 2011 12:34PM

By Joe Mont, TheStreetTheStreet

 

It must feel pretty good to be Facebook. It has some 700 million users worldwide, out-clicks the rest of the Web, including Google (GOOG) -- Google -- and buzz has even started about using Facebook as a search engine.

 

But there remain skeptics. Some might point to MySpace, since in 2007 an estimated one in five Americans used the site, or even to Friendster, once 100 million-strong and now with about 1.5 million users since rebranding as a gaming site (and expunging all older user profiles and content along the way).

 

What did in Friendster, aside from some internal politics, was failing to listen to user feedback, and to some that sounds like Facebook now.

 

While Facebook has scale and the vision of maverick CEO Mark Zuckerberg, its leadership also faces the need to innovate, add features and boost revenue lest it grow stale, bloated and underfunded. Yet every change is met with overstated horror by users enraged that someone messed with "their" Facebook.

 

Almost every aspect of the service is scornfully picked apart -- game-related spam, privacy controls, hijacker apps and links and the stream of banal posts from "friends" about their kids' post-nasal drip, Zumba classes and all-caps rants about Obama and his ties to the Illuminati.

 

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Facebook does not fare well in the American Customer Satisfaction Index (ACSI), a national indicator of customer evaluations of goods and services among U.S. households. The index was founded at the University of Michigan's Ross School of Business.

 

"In 2010, Facebook debuted with an ACSI score of 64 -- the lowest of any measured Web site," an analysis of the data reads. (By comparison, Wikipedia scored 78, the best showing, followed by YouTube at 74.) "This year, Facebook makes a modest gain, up 3% to 66, even though -- or perhaps because -- its user numbers have exploded, reaching almost 1 billion. But considering Facebook's low user satisfaction, its current size dominance cannot be taken for granted in the future."

 

Facebook's pitiful showing over the past two years puts it in the bottom 5% of all measured private-sector companies and in the same range as perennially low-scoring airlines and cable companies.

 

"Facebook is a phenomenal success, so we were not expecting to see it score so poorly with consumers," says Larry Freed, president and CEO of ForeSee Results, which worked with ACSI on the data. "At the same time, our research shows that privacy concerns, frequent changes to the Web site and commercialization and advertising adversely affect the consumer experience. Compare that to Wikipedia, which is a nonprofit that has had the same user interface for years, and it's clear that while innovation is critical, sometimes consumers prefer evolution to revolution."

 

"They're in a situation where satisfaction is very important long term, but while there is not really a viable competitor it isn't going to change a whole lot of their business," he adds. "In other words, if you don't have any alternatives you are going to put up with the challenges."

 

Freed draws a comparison to America Online.

 

"AOL (AOL) is another company that, years ago, early on in the measurement of the ASCI, their scores weren't very strong, but at the time they were pretty dominant. As alternatives came about they lost their way pretty quickly because they weren't doing a good job of meeting consumer's needs," Freed says.

 

Did someone say alternatives? The analysis has one in mind.

 

"For companies that provide low levels of customer satisfaction, repeat business is always a challenge unless customers lack adequate choices, as in the case of near monopolies," it says. "It is possible that Facebook's gigantic user base in and of itself might provide a certain monopoly protection. The first test of this notion will probably come from Google's recent launch of Google+, a social networking service aimed at an audience similar to that of Facebook. If there is a battle for social networking preeminence between Facebook and Google, it will likely center on user satisfaction."

 

The launch of Google+ has surely been the biggest -- and most well-funded -- challenge to Facebook's social media stranglehold.

 

To be sure, even the few who cheered on Google+ unreservedly were rocked by what the vast reaches of the search engine's own domain brought forward Wednesday: a report from Computerworld that brokerage and investment banking firm Stifel Nicolaus was downgrading a "weakening" Google to a hold from a buy; and a far more damning piece by Michael Degusta at theunderstatement.com, with the simple headline Google's Management Doesn't Use Google+. As PCmag summed up the research:

 

In the three months since Google+ launched, only three of the 12 members of Google's management team have posted on G+ . . . Just two of Google's senior vice presidents have posted since August. Degusta argued that Google's senior vice president of social and head of Google+ Vic Gundatora is one of the only vice presidents that has made a serious effort to use the service, with a total of more than 150 posts. SVP of Chrome Sundar Pichi is the only other exception to the norm, with a total of 58 posts . . . Even Larry Page isn't using Google+. He's only posted seven times, and he hasn't been active on the site yet this month. Co-founder Sergey Brin has posted slightly more, but only 15 times. Former CEO and current board member Eric Schmidt hasn't even joined the site yet. None of Google's board members have posted on Google+.

Don't count it out. Abandoning invitation-only and inviting the general public to join Google+ likely brought users to 50 million, says Experian Hitwise, and took the system from 54th in the social networking and forums rankings to eighth.

 

"Google+ is an interesting challenge to Facebook," Freed says. "They are not really a serious competitor until they get the network large enough to be viable. They are seeing great growth in adoption, but it still has to grow a whole lot more before people will abandon Facebook. But if they do become a viable competitor, Facebook is going to have some challenges because of their lack of satisfaction."

 

Competitors smell blood in the water. The open, nonprofit network social media site Diaspora, still in development, has considerable buzz for its un-Facebook-like dedication to privacy and user controls. And Hi5, a social network once given up for dead, is once again gaining momentum with a gaming focus. Tumblr, with its constantly refreshing stream of content, is thus far mostly a youthful addiction, but could broaden its audience. Twitter and the business-focused LinkedIn (LNKD) have carved out markets that can either ultimately supplement Facebook or replace it, user by user.

 

Flying under the radar are niche social networks, many of them adding features to specialized Web sites.

 

"I think the niche social media networks could be, and are in some cases, very powerful," Freed says. "I saw a stat when Facebook hit 500 million members that there are another 500 million members of niche social networks as well. They might be as small as fly fishing enthusiasts, but now you've got people who are there for exactly the same reason and their interests are aligned and all that."

 

These sites, and other upstarts, may want to start rooting for Google.

"I think if Google+ does create some fragmentation in the network, it will open the door to others," Feed says. "They will all look for a unique way of looking at the world to try to entice people to come over. In general, one of the great values of Facebook is that everybody is on it. As it gets fragmented, the whole value of their social network is going to decline."

 

27Comments
Oct 6, 2011 7:27PM
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I had a Facebook account once, but closed it.  I am sick and tired of so many idiots out there who can't type, can't spell and continue to add in their uneducated opinions when they have absolutely no idea what they are talking about.  I couldn't care less about how great your nieces think you are or your dog's "cute bark".  All in all, nobody cares about every little action I participate in and I sure don't care about yours. Not that you're not a terrific person, but the majority of human life is mundane and I just don't care that much about mine, much less yours! :-)  As for Facebook itself - let it die. We were all better off before the distractions of the internet, smart phones and the totally asinine concept of twitter!  We need a huge global EMP!!!!!
Oct 6, 2011 7:29PM
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I got off Facebook mainly because I got tired of reading pretentious, insipid comments by yuppie blowhards! I also discontinued it due to fear of identity theft. I think Facebook is nothing more than a platform for people to try to fool the world into believing they have fulfilling, wonderful lives.In reality, when you constantly have to brag about how great your life supposedly is, obviously it is a sham! I think Facebook is a easy way to communicate with friends and family, but you can do that just as easily with a text message or phone call! I don't see it for the revolutionary website that most people do; to me, it's more pathetic than anything else. My fiance goes on it just to read some of the stupid and ridiculous comments posted by mainly yuppies, and to make fun of them! I hope Facebook eventually becomes a dismal failure-it deserves to, because it sucks!

Oct 7, 2011 4:13AM
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I'll admit I'm on FB but the only time I log on is to accept a friend request and then immediately log back off.  I only keep the account on the off chance I lose touch with someone by losing their phone number or email. 

Do I care what other people ate for breakfast, named their goldfish or partied until they puked?  Not really.  FB is the modern day equivalent of 15 minutes of fame.  People like to feel they are important and that's why we get tedious postings of their life.  Psychologically, it's all about making yourself feel important and FB is the easiest way to expose your inner self to others without actually exposing yourself in person.  I doubt that the persona displayed on FB is the one that many show off in real life. 



Oct 6, 2011 6:50PM
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The intent of Facebook is for you to divulge as much of your personal information as they can acquire. Once they've got it, you might as well give up on any personal privacy. Ignore your narcissistic friends, keep you profile conservatively managed and don't "join" anything that requires divulging all your info. You may have noticed that there's a big difference between "like" and "join". Join is an absolute sellout. Why, because they want it that way. Your information is then out of your control and into the hands of absolutely unscrupulous profile brokers, willing to sell you out, without your knowledge. Remember, it's the advertisers that pay for Facebook, not you. We are not their clients, we're the victims. Great scam.
Oct 6, 2011 9:24PM
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I use facebook myself and I have to say is my main gripe is that they don't care what their users want or what their users think of their changes. The way I see it is the users are what makes facebook the multi billion dollar company that it is, without the users facebook would be nothing but a passing fad. So in my opinion they should listen to their users opinions and desires.

 

Yeah facebook gets paid due to their advertising but without users to view their ads they would make nada, zilch, zero. Look at myspace they didn't listen to their users and destroyed themselves especially taking away the one thing that made them unique which was fully customizable profiles... now look at their userbase and how much it crumbled since like 2009 or so. I left myspace for facebook due to that little detail and if push comes to shove I will leave facebook for diaspora or google+.

 

What is facebook gonna do when all it's unsatisfied users flock to google+ or diaspora and they end up in the same predicament as myspace? As everyone has read above facebook has the lowest satisfaction rating. So what does that tell all you naysayers who wanna defend facebook's way of handling things.

 

Also just because someone doesn't want to have to sort through all the crappy newsfeeds and pick and choose what they want to see, that doesn't make them lazy. I personally don't like the top news feature for the newsfeeds. I liked the newsfeed the way it was before this most recent change. Now what they should've done is added all the ability to pick and choose what you want to see in your newsfeed without the top news bullcrap. By doing whatever they did with the newsfeed in the most recent update they made it so you can't see any of the game newsfeeds like for castle age and yoville like you could before the update.

 

Also another thing that facebook does that is diliked by many users I would imagine is tracking your actions even after you logout of the site. It's called what I do after I logout of your site is my business not yours... that's why the greedy uncaring good for nothing fools have a lawsuit against them now which they will lose since their is no justification for tracking users movements after they logout of the site.

Oct 6, 2011 5:46PM
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I have used Facebook for a while but I must say that I'm dissapointed in the way they have bowed to pressure and became part of the censured puppets of the government, to bad Facebook has turned out to be an agent of the government.

 

Oct 6, 2011 4:30PM
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I do not use Facebook, but even I know the site would have to crash head on into the same iceberg as Titanic in order for it to fail at this point.
Oct 7, 2011 10:41AM
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As soon as a comparable alternative to Facebook comes along, my friends and I will be leaving Facebook.  It's becoming all about the advertisers and not the FB users.  Very frustrating.  The privacy and ability to control who sees posts is almost non-existent. 
Oct 6, 2011 9:05PM
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Facebook has created less than 200 jobs.  It is a loser company.   What a dump.
Oct 7, 2011 3:21AM
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For everyone that has issues with FB, I would tell you to take a serious look at G+! (Google plus) as it is much more intuitive and smoother once you get past the learning curve. The ease of posting to who you want to and not have everyone else privy to it is a piece of cake with their feature called "circles." It has far out paced the other "social networks" since it's start. It reached 50 million users in just 88 days compared to the next fastest to that milestone was MySpace who did it in1040 some odd days. It has quite the infrastructure in place already and it listens to it's users. (what a concept)

 

I've been on FB for years, but am in the process of making the switch eventually full time to G+. I'll make the move completely once I've sent out invitations to those that I would like to continue to talk to and the others ...... well I'll hang a "Gone Fishing" sign on my door. Wink

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At present I am trying to fix my broken account with much frustration.  Facebook customer help is a joke on steroids.  It doesn't exist.  The sooner something else is available the better.  Faceboook sucks!

Oct 7, 2011 11:16AM
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Wish Facebook would listen to us...........we just LOVE IT ..............they way it IS!  (or WAS, actually!)  Why must they change everything...............?  They would get more people on it if they would only make things more simple, NOT more confusing! 
Oct 7, 2011 9:35AM
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I use facebook everyday. It is very frustrating to have to deal with all of their surprise changes.  The changes may be easier to deal with if you when to expect them and what they were going to be.  The services that I use facebook do not operate correctly to start with and they are making new changes.  Fix what you have first and make it work right before you add new crap that nobody asked for to start with.  Advertising is out of control, I'm not concerned about someones peter falling off and what drug I can take to prevent it.  The only reason I use facebook for is enjoyment, I play games and they have done a real good job of screwing those up.  I have lost 11 neighbors in the last week because of their changes at that rate it won't take long to fail!
Oct 7, 2011 2:20AM
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I enjoy Facebook for help it lends while I analyze and watch my favorite reality show of all. Politics. I need two accounts to keep track of it all...State and Federal level. I think it is fascinating that the platform continues to run through two updates per 24 hr period, and, it is interesting to see things pop up and go away. An amazing laboratory for programming experimentations.

 

As a tool for socializing, not so much. I'm old (hee hee) and I'd rather e-mail or visit my real friends face to face. I tried that socializing thing on FB and found out what interests me does not interest most of my old friends who found me on that platform and those I was excited to be in touch with again, blocked me! So, the passive aggressive features of FB aren't thrilling. It took three months for me to realize if I'm always posting to people and they NEVER post back, I'm blocked from their feed. I ended up dumping my namesake account because I'm not going to post things for people who aren't going to read them...especially when I was finding stories they might be interested in to. A waste of my time. Anyway, my only real complaint about Facebook is the people who send you a friend request and then you never hear from them again after you accept the request! Again, why bother?

Oct 7, 2011 12:44AM
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Google has an awesome social network called 'Google Plus'. It's not that old and is way better than Facebook.
Oct 6, 2011 4:48PM
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Its easy to be dissatisfied , but it is free.....A great start , we will evolve though, A passing fad if they do not integrate common uses, like skype is good, next
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I never liked facebook and am only on there because everyone at work likes it. I don't like people at work knowing all my intimate thoughts anyway and need a place to vent or talk about crazy things that most people at work wouldn't talk about, like paranormal stuff. Myspace is SO much easier to use too. Facebook is terribly UNuser friendly and no place to blog either!
Oct 7, 2011 1:55PM
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I got rid of my Facebook account a few months.  It was great at first to find some people who meant a lot to me but lost contact over the years.  Aside from that, it served little use to me.

 

However, I never paid a dime to find and interact with my old friends.  Since Im not paying, you have to figure Facebook is getting their money from someone, which would be advertisers and spammers.

 

As their following grows to almost a billion, they get more money from advertising and spammers which is what keeps them going.  So the bigger they become, the more advertising and spam you will receive.

 

FYI..I  lost a picture on my hard drive and I went to my Facebook account and downloaded  the picture from account.  When I went to my drive, not only did it download MY intended picture, but I had about 50 random photographs that got pulled and saved to my hard drive.  Some I recognized as friends, others I had no clue who they were, but I assume it was pictures posted on  friend's account.  I have no idea why this happened, but it was enough to delte my account.

 

Also, anyone can take your name and download your photo and have a lot of your personal information.  After some thought, Facebook does not charge me anything, so they have no obligation to me.   They are obliged to the people who pay..Advertisers spammers.

 

At one time it was a symbionic relationship, but now I think they are way too big to be worth the hassle and security risk.

Oct 7, 2011 1:31PM
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I dont have facebook,people say i'm missing out, what am i missing?
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