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Three Reasons Why a Brand Should Think About Pulling the Plug on Facebook

Facebook has been staring down privacy challenges, user revolts and even legal onslaughts almost since its inception. With the social network's membership heading for the 500 million mark, it would be inconceivable for a marketer that has painstakingly built its Facebook page to abandon it over yet another outcry over its privacy practices.

Or would it?

The latest revelations about Facebook's - and several other sites for that matter - practices are pretty grim from a privacy advocate's perspective. Facebook, MySpace and several other social-networking sites have been sending personally identifying data to advertising companies - despite promises they don't share such information without consent, the Wall Street Journal reported on Friday. According to the Journal, Facebook, MySpace, LiveJournal, Hi5, Xanga and Digg sent advertising companies the user name or ID number of the page being visited.

How much further this will ratchet up the Facebook protests remains to be seen. Sooner or later, though, businesses that use Facebook will have to wonder whether the site's policies and the growing negative publicity surrounding it hurts more than helps their brand.

Here are three reasons why it might.

Facebook’s strength - interactivity and a brand that closely associates with the companies that market on it - is becoming a weakness.

"Social media marketing specialists have told me in previous stories how much value Facebook and Twitter can bring to companies and their brands," writes Renay San Miguel at TechNewsWorld." The distance between brand and customer is narrowed; interactivity and user feedback via comments on Facebook fan pages and tweets encourage conversations with human beings, not lectures from faceless corporations. The new Open Graph platform, with the omnipresent "like" button seeding the Web, turns that Internet into the mother of all recommendation engines."

In short, if Facebook’s reputation were to be seriously tarnished, companies that market on it will feel the sting as well.

Facebook privacy and operating polices are not friendly to advertisers and brands either.

Jeremiah Owyang, a partner at Altimeter Group  has taken a close look at Facebook's changes governing its community and brand pages - changes that haven't gotten the same attention as consumer privacy policies. Namely, he points to Facebook’s recently launched "Facebook Community Pages" - a feature that aggregates content from wikipedia and Facebook wall posts - in a blog post." Think of it as a cross between Wikipedia with user comments - sometimes unwittingly. These changes cause confusion for users, diminishing control for brands, and strains on the already torrid relationship between Facebook and brands."

Advertisers and brands might not like what is made public.

The company or community page you established in order to have a Facebook presence could be distributed, or misappropriated in ways you did not intend or approve, PC World says. "The message you targeted for your Facebook community could possibly now be shared elsewhere throughout the Internet."

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