Fast Company

Facebook: Stop Acting Like a Nation-State

The executives at Facebook may be under a grand delusion: they seem to think that Facebook is a nation. And they're attempting to build it a government.

This is, of course, a tremendously stupid idea.

Sure, Facebook has had PR trainwrecks before, and all were exercises in hubris; first there was the Beacon debacle, then its parochial ban on breastfeeding photos, and most recently, the new terms of service that tried to claim ownership over users' data. 

That last catastrophe generated more antipathy from users than perhaps any one before it. But Facebook's high-minded reaction will surely dwarf any of its past gaffes--and unlike those earlier ones, this one has the potential to truly damage usership. Facebook calls it "a new approach to site governance" that gives users "an unprecedented role in determining the future policies." What it really is: a deeply flawed 21st century political experiment. Prepare to sit back and watch it burn.

Here's the milieu: Facebook announced this week that it would craft Principles of Service and a Statement of Rights and Responsibilities meant to protect its users from abuse of their data. The social network also went one step further: It announced that it will hold "virtual Town Hall meetings" where users will get to comment on the Principles and the Statement of Rights. After the comments are digested by Facebook policymakers, they'll take the finalized documents and put them to a public vote. All users (as of 2/25/09) are eligible to vote, and quorum will be set at 30% of users.

Here's where things get weird. Facebook has stipulated that this voting process will become a matter of course any time Facebook wants to change its service terms. "[A]ll future policy changes would be eligible for a vote by users, provided the level of intensity of user interest would justify it," the company's press release says.

Weirder still: Facebook wants to establish a provisional government. Check out this paragraph tucked into the end of that same press release:

Facebook also announced its intention to establish a user council to participate more closely in the development and discussion of policies and practices. As a start, the company indicated that it would invite the authors of the most insightful and constructive comments on the draft documents to serve as founding members of the group. [Emphasis mine.]

Not coincidentally, all of these initiatives are couched in the language of colonial nation-building. In a blog post on February 17, CEO Mark Zuckerberg observed, "More than 175 million people use Facebook. If it were a country, it would be the sixth most populated country in the world." He went on to call Facebook's new terms a "governing document" for how the service is used, and in a press conference, made reference to "openness and transparency" in much the same way that once-candidate Barack Obama promised the same things of his administration's technology policy.

Outside critics have used similar diction. Simon Davies, director of Privacy International, called the new initiative an unprecedented action toward "democratization." Julius Harper, a Facebook user that co-founded a group called "People Against the New Terms of Service," said that to use votes to determine the way "service is governed" is "remarkable."

So let's get this straight--Facebook wants to choose a small representative government, and put all major service changes to popular vote. But wait a second: don't governing bodies need accountability to function correctly? Wasn't a lack of accountability and representation the reason colonial Americans rose up against the governors installed by King George III?

I bring up the American Revolution whimsically, but the parallels are interesting to talk about. Facebook, like any country, is possessed of resources that are worth money--advertising money. And as of this week, in accordance with Facebook's new Statement of Rights, each user "owns" their little plot on Facebook's servers: their profile. Yet the governing body, Facebook Inc., makes millions in revenues off that natural resource, while the users don't make a dime. If Facebook is the sixth-biggest nation on earth, it's a little like mid-century Mexico under the PRI: lots of oil money flowing upwards, and nothing trickling down.

So true accountability may be the next step. In a press conference, Zuckerberg referred to transparency as a "process" that the company will work to pursue. That suggests that more things about Facebook's "governance" are going to change. Rafe Needleman of CNET, for one, has speculated that ultimately Facebook's council members might be elected positions. But true accountability could be problematic for Facebook execs. What if the elected council made a campaign for profit-sharing, backed by hundreds of millions of Facebook users threatening to defect to MySpace?

So maybe the council shouldn't be elected. But at heart, governments have two jobs: to protect an economy, and to get people to believe in the legitimacy of the government. It's that second part that is most difficult: if people don't think their voices are being heard, they revolt.

If the council is hand picked, users might feel like Facebook is engaging in nepotism, and they might continue to be wary of every move the company makes. That kind of defensive posture can be hellish for a company trying to grow and change. But if Facebook lets users elect a council, they'll not only face uncomfortable initiatives like a push for profit-sharing--they'll open the door to the messy process of politicking. Parties will form, bribes will be made, extortion will crop up, and Facebook will become a little online banana republic.

Of course, long before any of this happens, Facebook will be forced to shutter its "open" government, because the bureaucracy of the whole thing will be an anchor on innovation. After all, Facebook still needs its agility if it's going to solidify itself as a profitable Web company. And once they shut it down, they're back to square one: a hegemony that no one likes.

But it would be fun if the scenario played out, wouldn't it?

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10 Comments

  • Kevin Ohannessian

    @Noah, I wouldn't advocate any profit-sharing; I think Facebook is best as a Zuckerbergian dictatorship than a co-op if it wants to grow and stay solvent.

    Earlier this month, when the company changed its terms of service, it was doing something it had to do -- it was taking a step towards generating more revenue. Governments are intrinsically bureaucratic and bad at yielding profit, because they encourage deliberation and welfare for all. That's good for real countries, but bad for Facebook, which has 1/3 the cashflow of MySpace (@Joe Momma) despite having 45 million more users. http://www.reuters.com/article...

    Video game companies might be able to do this successfully, but they already have a functioning business model and a much smaller user base to muddle discussions. How do you have a reasonable council with an online population the size of Russia? Even Russia can't do it, and they have an entire government and a duma.

    Facebook should figure out how to make money first, and then they can hand the keys to the kingdom to whomever it wants.

  • Chris Dannen

    @Joe Momma and @Emerson Churchill -- my point wasn't to claim that Facebook is valueless; of course information is an asset. But you don't have to be an expert in political history -- and I wouldn't claim to be -- to understand that democracy is a very easy thing to screw up. This may have been conceived as "engagement marketing" stunt, but now Facebook has made outsized promises of user control. Users are going to take Facebook up on its promises. And that could bring a lot of trouble for a company that is still figuring things out.

  • Chris Dannen

    @Joe Momma and @Emerson Churchill -- my point wasn't to claim that Facebook is valueless; of course information is an asset. But you don't have to be an expert in political history -- and I wouldn't claim to be -- to understand that democracy is a very easy thing to screw up. This may have been conceived as "engagement marketing" stunt, but now Facebook has made outsized promises of user control. Users are going to take Facebook up on its promises. And that could bring a lot of trouble for a company that is still figuring things out.

  • Chris Dannen

    @Joe Momma and @Emerson Churchill -- my point wasn't to claim that Facebook is valueless; of course information is an asset. But you don't have to be an expert in political history -- and I wouldn't claim to be -- to understand that democracy is a very easy thing to screw up. This may have been conceived as "engagement marketing" stunt, but now Facebook has made outsized promises of user control. Users are going to take Facebook up on its promises. And that could bring a lot of trouble for a company that is still figuring things out.

  • Emerson Churchill

    Chris, you've written out an interesting intellectual exercise here, but with all due respect I think you are completely off-base as to Zuckerberg's intentions. All this hubbub from Facebook is simply damage control for yet another of their lame decisions--period, end of story.

    A lot of the content in the principles and rights documents are really just offending portions of their Terms of Use dressed in new clothes. And the other provisions--i.e. the "virtual town halls" are windowdressing. There's no real attempt on Facebook's part here to "act like a nation-state." It's just an attempt to control their image in the mainstream press (which, sadly, has reported the story exactly how Facebook wanted them to. Facebook's PR team: 1. Facebook's users: 0--again).

    After all, why would Facebook really care about it's users? They've clearly disregarded them before, as in their previous expansion, News Feed, and Beacon debacles...why would they start caring now?

    As you said: an exercise in hubris.

  • Joe Momma

    Size matters not, Chris...your point about cash flow is valid but it's a snapshot, not a predictor of future success. I remember back during the boom-and-bust days when people chided Amazon for not making more money like eBay and we all know how that one turned out.

    Anecdotal evidence suggests that MySpace began it's rise to glory when Friendster pissed off its userbase, and FB's population began exploding right around the time MySpace pissed off its userbase. The users ARE the content, the content IS the value. If users don't feel listened to, they will leave, and without users there is no value in FB.

    I think it's fine that you're questioning the wisdom of FB in doing this. Zuckerberg is over-reacting to what he fears could become a mass exodus. But calling it a "nation-state"? Really? Are you now an expert on political history? Your comments and examples suggest otherwise.

    In the end, this is not a "political experiment" as you suggest; it's an example of community-centric engagement marketing.

  • Anonymous

    Facebook is for the smart and educated, and a great way to get in touch with the world and family members!! Its not myspace!!???

  • Joe Momma

    As a customer of AT&T, which claims to "own" my personal information, I welcome this experiment. You may also want to look back at the demise of MySpace, which began when Rupert and co. decided to censor user communication. The Facebook "government" may never achieve its potential but Zuckerberg is pretty smart to put forth even a facade of user engagement.

  • NoahRobischon

    The user council sounds like a pretty good idea to me. And Facebook is not the first for-profit company to use a (quasi) democratic process. Video game companies, especially the ones that make MMORPGs, have used similar processes with generally good results.

    Would you advocate a profit-sharing model that would make Facebook akin to eBay, where the creators of the content are also stakeholders of a sort?