May 19, 2010: Facebook's privacy problems

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>> Rooney: HOLLYWOOD

STAR POWER AND A POPS

PATRIOTIC SALUTE TO THE

KENNEDYS.

>> Rooney: GOOD EVENING.

IF YOU'VE CONNECTED WITH

AN OLD FRIEND OR A LONG

LOST FLAME RECENTLY, THE

CHANCES ARE YOU DID IT

THROUGH Facebook.

JUST SIX YEARS OLD, THE

SITE BOASTS A WHOPPING

400 MILLION USERS.

BUT NOW FRUSTRATION WITH

Facebook'S SHIFTING

PRIVACY POLICIES IS

TRIGGERING A BACKLASH.

SOME Facebook USERS

SHARE THEIR PERSONAL

INFORMATION WITH THE

WORLD.

OTHERS ARE MORE GUARDED.

BUT HARVARD'S JUDITH

DONATH SAYS KEEPING A LOW

Facebook PROFILE IS

INCREASINGLY DIFFICULT.

>> PEOPLE DON'T REALLY

KNOW WHAT IS PUBLIC, WOULD

COULD BE PUBLIC.

IT MIGHT NOT BE PUBLIC

NOW, BUT IS IT POSSIBLY

PUBLIC TOMORROW?

>> Rooney: IT COULD BE

BECAUSE Facebook IS

PROVIDING USER INFORMATION

TO OUTSIDE SITES LIKE YELP

AND PANDORA.

>> BY JUST HAVING GONE TO

ANOTHER SITE, ALL KINDS OF

PRIVATE INFORMATION WAS

GOING TO OTHER SITES THAT

I MIGHT NOT HAVE THE

SLIGHTEST INTEREST IN

SHARING THINGS WITH.

>> Rooney: SENATOR CHUCK

SCHUMER HAS CRITICIZED THE

COMPANY'S POLICY.

WIRE.COM CLAIMS Facebook

HAS GONE ROGUE.

AND MAY 31ST HAS BEEN

NAMED WORLDWIDE QUIT

Facebook DAY.

>> PEOPLE ARE FINE WITH

SHARING.

YOU CHANGE THE RULES ON

THEM AFTER THEY'VE STARTED

SHARING OR THEY DON'T FEEL

LIKE THEY HAVE CONTROL,

THAT'S WHEN THEY GET

FRUSTRATED.

>> Rooney: BUT HE ADDS

THAT Facebook IS A

BUSINESS AND IS SITTING ON

A TREASURE TROVE OF

INFORMATION.

>> WE'VE TOLD THEM HOW OLD

WE ARE, WHEN OUR BIRTHDAY

IS, HOW WE INTERACT WITH

FRIENDS, AND HOW WE

INTERACT WITH COMPANIES.

THAT'S DEMOGRAPHIC DATA

THAT THE ADVERTISING

INDUSTRY HAS BEEN ASKING

FOR YOUR GENERATIONS.

>> Rooney: AND A RECENT

GLITCH LET THEM REVIEW

THEIR FRIENDS PRIVATE

ONLINE CHATS.

AND MARK ZUCKERBURG MOCKED

PEOPLE FOR TRUSTING THEM

WITH THEIR INFORMATION.

>> THE ULTIMATE QUESTION

IS: WILL Facebook

CONTINUE TO THRIVE, OR IS

THIS GOING TO BE A DEATH

NAIL.

I DON'T THINK IT IS A

DEATH NAIL.

>> Rooney: REST ASSURED

IF YOU THINKING ABOUT

DELETING YOUR Facebook

ACCOUNT, YOU'RE NOT ALONE.

JOINING ME IS HARVARD

COMPUTER SCIENCE PROFESSOR

HARRY LEWIS, WHO TAUGHT

MARK ZUCKERBURG, AND TIM

HWANG, MANAGER OF WEB

ECOLOGY.

WELCOME TO YOU.

I SIGNED ON TO MY

Facebook ACCOUNT -- I DO

THAT EVERY TWO OR THREE

YEARS -- SERIOUSLY, I DID

LOOK AT IT TODAY.

I DID NOTICE AT THE TOP

THERE WAS A YELP THING AND

A LOT OF STUFF I HAVEN'T

SEEN.

BUT WHAT IS NEW?

WHAT EXACTLY IS THE POLICY

CHANGE HERE?

>> Facebook REALLY GOT

HIT PRETTY HARD BECAUSE

THEY IMPLEMENTED A NEW

POLICY THEY CALLED INSTANT

PERSONALIZATION.

A LOT OF PEOPLE FOUND IT

OFFENSIVE BECAUSE IT IS A

HUGE INVASION OF PRIVACY.

IT TAKES THE Facebook'S

INFORMATION ABOUT YOU AND

SHARES IT WITH SITES THAT

YOU MAY OFTEN GO TO FOR

OTHER NEEDS.

SO YELP WAS MENTIONED.

>> Rooney: WHAT IS YELP?

>> YELP IS LIKE A

RESTAURANT REVIEW SITE.

THEY WOULD BASIC MANY

RECOMMEND CONTENTS TO YOU

BASED ON WHAT YOU'VE

ALREADY GOT.

>> Rooney: I DIDN'T WANT

TO CLICK ON IT THINKING I

MIGHT GET YELPED.

>> ON THE ONE HAND, IT IS

TO PROVIDE BETTER

INFORMATION TO YOU, BUT ON

THE OTHER HAND, IT COULD

PROVIDE INFORMATION TO

OTHERS.

>> Rooney: I HAVE

MINIMAL SYMPATHY FOR

PEOPLE.

YOU SIGN UP FOR A SOCIAL

NETWORKING SITE, AND

YOU'RE SHARING ALL THIS

STUFF.

THE FOUNDERS -- HOW ELSE

ARE THEY GOING TO MAKE

MONEY.

>> THERE ARE LOTS OF

THINGS THAT LOTS OF PEOPLE

USE THAT ARE COMPLETELY

VOLUNTARY --

>> Rooney: PEOPLE DO IT

ALL THE TIME.

THEY SELL YOUR LIST.

YOU WRITE A CHECK TO THE

WORLD WILDLIFE FUND, AND

THEY'RE GOING TO SELL YOUR

NAME TO SOME OTHER --

>> IT IS BEYOND THE

COMMERCIALIZATION.

THE DEFAULTS ARE CHANGING

NOW, SO PEOPLE WHO ARE

LESS YOUR FRIENDS, WHO ARE

NOT, OF COURSE, VERY OFTEN

YOUR REAL FRIENDS,

ANYWHERE, PRINT STUFF TO

GET SHARED WITH FRIENDS OF

FRIENDS.

WELL, FRIENDS OF FRIENDS

CAN BE ALL KINDS OF PEOPLE

THAT YOU DON'T ACTUALLY

WANT TO BE ASSOCIATED

WITH.

THE KIND OFMENTAL --

MENTAL MODEL OF THE SPACE

WHICH YOU OPERATE UNDER

WHEN YOU GO ON Facebook

HAS BEEN CHANGED.

MY WAY OF EXPLAINING WHY

IT IS PEOPLE ARE SO UPSET

ABOUT THIS.

Facebook HAS A LOT OF

USERS.

SO PEOPLE MUST LIKE IT.

THERE ARE 400 MILLION

Facebook USERS.

APPARENTLY HALF OF WHOM

USE IT VIRTUALLY EVERY

DAY.

>> Rooney: ALL DAY.

>> MAYBE ALL DAY.

BUT IT'S LIKE WE ALL DRIVE

CARS, WE ALL LEARN TO

DRIVE CARS.

WE KNOW WHAT TO EXPECT

WHEN YOU DRIVE A CAR.

IT'S LIKE IN THE MIDDLE OF

THE NIGHT THE CAR-MAKER

DECIDED WHEN YOU MOVE YOUR

STEERING WHEEL A LITTLE

BIT, IT'S BETTER FOR

EVERYONE IF THE CAR

SUDDENLY TAKES A RIGHT --

A SHARP TURN RATHER THAN A

GENTLE TERM.

>> Rooney: THEN BUY

ANOTHER CAR.

>> THERE IS ONLY ONE CAR

COMPANY.

>> Rooney: THERE USED TO

BE MySpace.

WHAT HAPPENED TO THAT?

>> Facebook IS DOMINANT.

THEY'VE CREATED AN

ENORMOUS KIND OF SOCIAL

NETWORKING INFRASTRUCTURE

HERE, WHICH IS VERY MUCH

THE DOMINANT PLAYER.

AND THEY'VE ANNOYED THEIR

COSTUMERS.

AND, YOU KNOW, IT'S GOING

TO BE VERY INTERESTING TO

SEE WHAT HAPPENS.

BECAUSE MAYBE COSTUMERS

WILL GO AWAY.

MAYBE COSTUMERS WILL GO

AWAY FOR A DAY, BUT THAT'S

LIKE STOP DRIVING FOR A

DAY.

>> Rooney: THEN DON'T

PUT THE PERSONAL STUFF ON

THERE.

WE ASKED A COUPLE OF

PEOPLE LAST NIGHT TO

RESPOND TO US ABOUT WHAT

THEY WERE GOING TO DO IN

THIS DUMP TWITTER

CAMPAIGN -- DUMP

Facebook, AND A COUPLE

OF PEOPLE TWITTERED US.

ONE SAID, I THINK A LOT OF

PEOPLE WOULD LEAVE

Facebook THESE DAYS IF

THEY COULD DO SO WITHOUT

DESTROYING THEIR SOCIAL

LIVES.

I THOUGHT WHAT THE HECK.

ANOTHER GUY SAID, PRIVACY

IS OUR POSSIBILITY.

>> LET ME PUSH BACK A

LITTLE BIT.

WHEN THE TELEPHONE SYSTEM

WAS CREATED, THE

GOVERNMENT FELT IT WAS

PERFECTLY WITHIN ITS

RIGHTS TO WIRETAP.

AND THE ANSWER WAS, IF

PEOPLE OBJECTED, NOBODY

HAS TO USE THE TELEPHONE.

DON'T USE THE TELEPHONE IF

YOU DON'T WANT THE

GOVERNMENT TO TAP IN AND

LISTEN TO WHAT YOU SAY.

THE QUESTION IS HOW FAR

ALONG THE PATH ARE WE

TOWARDS Facebook

BECOMING THE TELEPHONE OR

THE AUTOMOBILE OR

SOMETHING THAT EVERYBODY

USES AND, THEREFORE, WHICH

SENATOR SCHUMER THINKS

MAYBE THE GOVERNMENT OUGHT

TO GET INVOLVED IN

REGULATING.

>> Rooney: IT SEEMS TO

ME THERE IS A LITTLE BIT

OF JEALOUSY INVOLVED IN

HERE.

MARK ZUCKERBURG IS WORTH

$4 BILLION.

AND HIS COMPANY IS WORTH

MORE THAN THAT.

>> I THINK MORE THAN

JEALOUSY, I THINK IT IS

THE KIND OF MESSAGING THEY

PUT OUT.

SO Facebook HAS ALWAYS

RESTATED AND STATED THEIR

COMMITMENT FOR USER

PRIVACY.

AND THEY'VE ALWAYS POINTED

TOWARDS BEING ABLE TO

CONTROL YOUR PRIVACY

SETTINGS.

AS THEM REALLY RESPECTING

THE BOUNDARIES THAT PEOPLE

ARE SETTING.

I THINK THAT IS PART OF

THE PROBLEM, THAT, YOU

KNOW, PEOPLE WERE GIVEN

THESE EXPECTATIONS WHEN

THEY JOINED ON.

AND THE COMPANY CONTINUES

TO KIND OF MAKE ITS

OFFICIAL POSITION THAT IT

REALLY RESPECTS PRIVACY.

BUT AT THE SAME TIME,

THESE THINGS ARE BEING EAR

ERODED OVER TIME.

WHICH I THINK IS WHERE

PART OF THE ANGER IS

COMING FROM, RATHER THAN

MARK ZUCKERBURG IS A

REALLY RICH GUY.

>> YOU'RE RIGHT.

WHAT THIS SUDDENLY HAS

MADE PEOPLE AWARE OF IS

THAT THE REASON WHY

Facebook WAS COLLECTING

ALL OF THIS INFORMATION

WAS NOT TO MAKE A NICE

LIFE FOR YOU AND ME AND

TIM.

THE PURPOSE FOR DOING THIS

WAS BECAUSE THE DATA ABOUT

US WAS COMMERCIALLY

VALUABLE.

AND SO MAYBE THERE IS A

LITTLE BIT OF EARTHQUAKE

HAPPENING HERE WHERE THERE

WILL BE SOMETHING GOOD

THAT WILL COME OUT OF IT,

BUT THERE IS AN

EDUCATIONAL OPPORTUNITY

FOR PEOPLE TO RECOGNIZE

WHAT THE BUSINESS MODEL

IS.

>> Rooney: WHAT WERE

PEOPLE THINKING, SOMEONE

WAS GOING TO CREATE THIS

COMMERCIAL SITE JUST TO

MAKE THINGS CONVENIENT FOR

YOU AND ME.

ONE WOMAN TOLD ME SHE

FOUND A HALF SISTER SHE

HAD.

THAT'S AMAZING.

BUT HE IS NOT DOING THIS

OUT OF THE GOODNESS OF HIS

HEART.

>> AND SOME PEOPLE ARE

TRYING TO CREATE

ALTERNATIVES.

ONE IS CALLED JOIN THE

ASPER.

IT IS TRYING TO CREATE A

DECENTRALIZED VERSION OF

Facebook.

>> Rooney: BUT THEY NEED

TO MAKE MONEY, TOO.

THAT'S BULL.

>> THEY NEED TO MAKE SOME

MONEY, BUT IT DEPENDS ON

HOW IT IS ORGANIZED.

>> Rooney: WELL, WHEN

SOMETHING LIKE WIRE.COM

SAYS -- AND YOU KNOW MARK

ZUCKERBURG, THEY SAY ALL

THAT IS EGO.

DO YOU THINK THAT'S THE

CASE?

>> I DON'T KNOW THAT THERE

IS ANYTHING INCONSISTENT

WITH HIS BEHAVIOR ALL

ALONG.

THIS HAS BEEN GOING ON FOR

SIX YEARS.

IT DOES HAVE THE FEEL, I

CAN'T ACTUALLY EXPLAIN,

AND I DON'T KNOW FOR

SURE -- I CAN'T EXPLAIN

WHETHER THIS WAS MERELY A

MISJUDGMENT BECAUSE IT

WASN'T SOME 20ISH

ENGINEERS GOT TOGETHER AND

DECIDED THIS WAS THE COOL

THING AND THEY MADE THAT

DECISION FOR 400 MILLION

PEOPLE, OR WHETHER THERE

WAS SOME COMMERCIAL PANIC.

THEY SUDDENLY NEEDED TO

GENERATE A LOT OF REVENUE

FOR SOME BUSINESS.

WE DON'T KNOW ENOUGH ABOUT

THEIR FINANCES ON THE

INSIDE TO KNOW.

BUT THERE IS SOMETHING

DIFFERENT ABOUT THIS,

WHICH IS THAT THEY'RE NOT

APOLOGIZING.

WHEN THE GOOGLE BUZZ THING

HAPPENED -- YOU REMEMBER,

WHICH WAS ANOTHER KIND OF

SITUATION IN WHICH GOOGLE

CREATED A SOCIAL NETWORK

THAT EXPOSED INFORMATION

IN A WAY THAT WAS

INTENTIONAL, BUT WAS NOT

INACCORDANCE WITH PEOPLE'S

EXPECTATIONS.

THEY VERY QUICKLY BACKED

OFF AND SAID, NO, WE MADE

A MISTAKE, AND WE'RE GOING

TO CHANGE THE DEFAULTS.

Facebook DOESN'T SEEM TO

BE BACKING OFF ON THIS.

THEIR LINE OF ARGUMENT

WITH THE PUBLIC IS, YOU

KNOW, YOU PEOPLE DON'T

KNOW WHAT'S GOOD FOR YOU.

YOU'LL LOVE THIS ONCE

YOU'LL GET USED TO IT.

IT IS ONLY A SMALL NUMBER

OF PEOPLE WHO ARE OFFENDED

BY THIS.

IT DOESN'T SOUND GOOD.

>> Rooney: AND THERE IS

SOMETHING ON GAWKER.COM,

IF YOU SEARCH PRIVACY

WHILE YOU'RE ON

Facebook, IT TAKES YOU

TO YOUR SETTINGS, BUT

REALLY WHAT YOU WANT TO

KNOW IS THE INFORMATION

ABOUT THEIR PRIVACY

POLICY.

THEY'RE SAYING IT IS

INTENTIONAL, THAT THEY

DON'T WANT YOU TO KNOW --

>> NO -- THERE'S A LINK AT

THE BOTTOM OF THEIR HOME

PAGE THAT TAKES YOU TO

THEIR PRIVACY POLICY, BUT

GOOD LOOK READING.

AND I WOULD LIKE TO SEE

WHAT THE PRIVACY SETTINGS

OF THE Facebook

ENGINEERS ARE.

>> Rooney: ALL RIGHT,

HARRY LEWIS AND TIM HWANG,

THANK YOU SO MUCH FOR

COMING.

WHEN WE CONTINUE, THE

FUTURE OF NEW ENGLAND'S

LARGEST NEWSPAPER.

>> THANK YOU.

>> THANK YOU.