CEO Mark Zuckerberg and company may live to push the envelope on privacy, but if users can't trust Facebook, they aren't afraid to drop the service. The larger the number of deactivated accounts, the fewer advertisers Facebook can land. Fewer advertisers mean less revenue, and less revenue... You get the picture.
Facebook should have learned its lesson on protecting user privacy after the public outcry when it launched the Beacon targeted advertising program, or perhaps after the U.S. Federal Trade Commission and other stakeholders began contemplating online privacy regulations. Yet Facebook continues to hear from U.S. and European regulators, privacy advocates, and an increasingly unhappy user base regarding its lack of concern for user privacy.
But all hope is not lost. The company did just announce it's planning a simpler set of privacy controls. If Facebook can also grasp that users and regulators want more than lip service and unhappy users will go elsewhere, the company's headaches might begin to fade.
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