Facebook has 400 million users. This is more people than every man, woman and child (including illegal aliens from Mexico) living in the United States right now.
I've chronicled a few of the problems facing Facebook and now it's getting a lot worse. This last week, New York Senator Charles Schumer wrote a letter to the FTC demanding they develop guidelines for how Facebook information can be used.
Oops. Here it comes.
Since Facebook is experimenting with and placing every American's Facebook personal information at risk by pulling stupid stunts like last week's changing of Facebook FAN Page icon to LIKE -- it's opened up a whole new can of worms for those concerned about security over people's personal information on any social media network.
What's started of as a joke for Facebook and their fans (no pun intended) has turned into a real 3-Mile Meltdown of trust and resentment by highly visible "early adopters" of Facebook such as Bill Gates, Mat Cutts of Google and Serge Brin.
We've discovered parts of your Facebook personal information has come face to face with a serious security loophole over their Graph API release last week. Also known as the LIKE Plug in code. Which replaced Facebook's Become a Fan button.
And Sen. Schumer isn't alone in his rants against Facebook. He's teamed up with Sen. Al Franken (former Saturday Night Live comedian), Sen. Michael Bennet (D. Colorado) and Sen. Mark Begich (D. Alaska)
What This Means for Online Advertising
Privacy regulation for online social networks means firms like Twitter, Facebook and others may soon have to adhere to a stricter set of privacy standards and be open to having their networks scrutinized by the U.S. Government.
Because right now, a lot of people including a few Senators are giving Facebook the "middle finger," with last weeks screw up. Matt Cutts, a high profile engineer with Google has shut down his Facebook page and is recommending that everybody else do the same thing until Facebook fixes their blatant privacy (security) loophole.
I stopped running my ads on Facebook this week when I received my Facebook stats. My traffic was down -37% this last week. Apparently hundreds of thousands of people are not visiting or hanging out at Facebook as a result. I'm not running any ads on Google, Facebook or any other network until June. The Bartman wants to see what happens here and there's no sense in wasting my ad dollars on networks with customers that just aren't hanging out there for a while.
Why is this bad news for Social Media networks?
Because 20% of online ads target you based on online behavior. Newcomers like Foursquare and GroupOn are new names in targeted content marketing. Google on the other hand has been doing this now for a few years. Today's sophisticated cookies track your movement. Stumble Upon sort of falls into this same new category, too.
Did you use the computer at work to go shopping, or maybe to a porn site?
Well congratulations. That data is now being shared (sold) with lots of companies you never heard of. It won't track you per se all of the time, but it does track your computer's IP (Internet Protocol) address.
Who you are connected to.
What you did.
What websites you visited.
What you bought.
How many times you Tweeted what you watched on TV or had for breakfast.
All of this information is being collected up and sold to God only knows who or where.
All of this collection of you, your computer and what you're doing online is being being sold to the Credit Bureaus: Trans Union, Equifax and Experian, too. I covered this in a previous blog post a few months ago. Insurance companies have to be in that mix, somewhere too.
Right now, the issues of online privacy are being pitched to members of Congress by various special interest groups. The FTC is currently looking into the problems and will release it's report to Congress sometime by the end of the year.
What You Should Do Now
Facebook is Yin & Yang. 50% good. 50% evil. Some might argue 75% evil.
Just remember that your birthday, your real name, your family members, friends are now at some degree of risk right now. This is a documented fact. It's not brought about by any fear mongers here. Facebook really screwed up. Your personal security is now at risk, and you've been so informed if you've read this blog.
You have to decide whether the risk is serious enough to shut down your Facebook account until the company comes out with iron clad, bullet proof security systems that can let us sleep better at night.
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