Rise of the Facebook-Killers

On a cold Friday evening in February two years ago, with a historic blizzard bearing down on the Eastern Seaboard, a small crowd of people bundled into a New York University lecture hall to hear a talk that would become something of a legend, a shot heard ’round the Internet.

The speaker of the evening was Eben Moglen, a professor at Columbia Law School and the founder of the Software Freedom Law Center. A stocky man with a white beard, glasses, and a high, nasal voice, Moglen spoke casually and rocked back and forth on his heels as he turned to make eye contact with his audience.

“So, of course, I didn’t have any date tonight,” Moglen began, deadpan. “Everybody knows that. My calendar’s on the Web. The problem is that problem. Our calendar is on the Web. Our location is on the Web. You have a cell phone, and you have a cell-phone-network provider, and if your cell-phone-network provider is Sprint, then we can tell you that several million times last year, somebody who has a law-enforcement ID card in his pocket somewhere went to the Sprint website and asked for the real-time location of somebody with a telephone number and was given it. Several million times. Just like that.”

In short, Moglen said, “the deal that you get with the traditional service called telephony contains a thing you didn’t know, like spying.”

Moglen wasn’t there to talk about cell-phone surveillance, but it served as a good metaphor for his larger point: The technologies we rely on to stay connected to one another are infected with destructive overlays of surveillance that can only do us harm. Tracing the history of the Internet, Moglen found many culprits in the transformation of the Web into a tool of control and surveillance, but he reserved special blame for one person.

“Mr. Zuckerberg has attained an unenviable record,” Moglen said of the founder of Facebook. “He has done more harm to the human race than anybody else his age.”

Why? Because, Moglen said, Mark Zuckerberg had harnessed the energy of our social desires to talk us into a swindle. “Everybody needs to get laid,” Moglen said. “He turned it into a structure for degenerating the integrity of human personality, and he has to a remarkable extent succeeded with a very poor deal. Namely, ‘I will give you free Web hosting and some PHP doodads, and you get spying for free all the time.'”

It was hardly the first time this sort of critique had been leveled against Facebook, but Moglen wasn’t just carping.

“I’m not suggesting it should be illegal,” Moglen told the audience of the Internet Society of New York. “It should be obsolete. We’re technologists. We should fix it.”

Fixing it wouldn’t be hard, Moglen argued. There’s no reason the architecture of a social network has to include the kinds of privacy invasion endemic to Facebook. In fact, the hardware and software necessary to build a network in which people kept direct control of their information, with no middleman, already exists. So Moglen challenged his audience: Build a better system.

“Mr. Zuckerberg richly deserves bankruptcy,” Moglen said. “Let’s give it to him.”

The rise of Facebook has been one of the defining stories of the young century. From its (somewhat) humble origins in a Harvard dorm room in 2004 to its present network of more than 800 million people, Facebook has redefined our conception of communication, inaugurating a new age of interconnectedness we call social networking.

To many, Facebook is social networking. It is the medium that brings us together in ways that we couldn’t have imagined before, delivering on a promise that was always implicit in the World Wide Web but only partially realized. Facebook offers us a space in which to talk, connect, and share music, pictures, and the stories of our lives, a space to express who we are and learn about one another and our world. We like it. A lot. We spend nearly eight hours a month on the site. By August, 1 billion human beings will be on Facebook.

And now, after building a network unprecedented in history in its breadth and penetration, Facebook is enjoying a further triumph: It’s going public with an expected valuation of as much as $100 billion. It’s the biggest technology offering ever, and it catapults Facebook into the league of PepsiCo, Verizon, Disney, and Goldman Sachs.

But as the business press and slavering investors look on eagerly at Zuckerberg’s coronation, many believe that the seeds of Facebook’s downfall have already been sown. The company might have brought people together like never before, but exploitation is woven inextricably into its DNA. Facebook makes its money by commercializing personal information, watching its users, analyzing their behavior, and selling what it learns.

Not everyone finds that troubling, but some people do. They believe that we can have all the benefits of a social network without paying for it with constant surveillance. They imagine alternative networks where users can talk, share, and collaborate with whomever they please without allowing a third party to memorize their face, what they read, and their shopping habits. They imagine that given a choice between a network committed to extracting as much information from them as possible and one with built-in controls and protection, eventually they’ll choose the latter. And they’re not just imagining these new networks. They’re building them now.

By now, the story of the beginnings of Facebook has been retold so many times that it has taken on the patina of myth. A lonely nerd who got no respect at school, young Zuckerberg found a golden ticket, a dream of an interconnected world. In order to realize this dream, he had first to defeat the grasping and socially privileged Winklevoss twins, which he did through cunning and trickery.

Several books and an Aaron Sorkin movie have told and retold this tale, though elements of this legendary account remain hotly disputed. But the truth is that this saga is irrelevant. What matters about Facebook is not its origin story, but rather what happened after. Today, Facebook reports annual profits of $1 billion. Two weeks ago, Facebook filed the necessary paperwork for an initial public offering of $5 billion, valuing the company somewhere between $75 and $100 billion. The numbers are staggering. By way of comparison, when Google went public in 2004, it was valued at just $23 billion and raised $1.9 billion from investors.

Where does such a stupefyingly large valuation come from? Not the users, obviously. We don’t pay a dime to maintain our profiles. And while Facebook is admirably “sticky,” in the parlance of online advertisers, that’s not enough to justify it either.

What makes Facebook so valuable isn’t the Web ads it serves up, but rather the unprecedented amount of information it has about its users, which it can then sell to third parties. Business intelligence—the data a company can scrape together about its customers—is the fastest-growing segment of enterprise computing. Major tech companies are snapping up companies that make business-intelligence software. But the software that does the data mining is only a tool—what really matters is how much data you have. And Facebook has a lot.

“Imagine what it is to run code like that on top of a database with billions of people’s lives in it,” Moglen says. “The business-intelligence layer of Facebook—the layer nobody sees—that’s where the whole $100 billion future supposedly is.”

Some argue that the age of social media has so fundamentally reordered our social lives that privacy as we know it is obsolete, a concept increasingly without relevance or utility in our lives. Moglen says that’s bullshit.

“Privacy isn’t an antiquated idea,” Moglen says. “That’s like saying fresh air over the Grand Canyon is antiquated when you own a copper smelter. We know it’s wrong to invade people’s privacy. We haven’t gotten rid of the laws that say it’s a crime to look in people’s windows or steal their personal information.”

The problem, Moglen argues, is that Facebook’s usurpation of privacy isn’t an individual matter that single users can decide to make their peace with. It’s ecological: What you share and what you click on affects what Facebook knows about your friends, too. And in the aggregate, all this personal information helps build a machine that can know the past and present and make good guesses about the future, a machine whose insights are incredibly valuable to everyone from corporations to state-intelligence services.

Still, conventional investor wisdom holds that privacy issues won’t threaten the Facebook juggernaut. As disturbing as the company’s track record on privacy is, the backlash hasn’t managed to slow Facebook’s meteoric rise to 800 million users. As tech editor Rafe Needleman wrote recently, “Facebook’s privacy flubs will not amount to much, as long as the company keeps changing its policies so frequently that nobody can keep up with what Facebook is actually sending to other users and advertisers.”

That might be true so far in the United States, but there are early signs in Europe that Facebook’s privacy shell game might be breaking down.

Max Schrems, a 24-year-old Austrian law student, has launched a three-year campaign against Facebook’s privacy incursions, using Europe’s stricter protections to exert a surprising amount of leverage on the company.

Schrems’s campaign has resulted in pending legislation that would force Facebook to let its users opt out of its data collection entirely and force the company to delete the data it has collected on a user if asked to.

The legislation might be the least of Facebook’s problems. The publicity could be worse. Schrems also used an Irish court to force Facebook to turn over all the information it had collected on him. What he got back was 1,222 pages of data, including information he’d never agreed to let them have and some that he had deleted. Under pressure, Facebook has pledged to European regulators that it will change its ways. But 40,000 people have already followed Schrems’s lead and asked Facebook Ireland for their own records. In Europe at least, Facebook’s users are becoming increasingly aware that Facebook is first and foremost a surveillance mechanism, and they don’t like it. If that realization spreads, Facebook’s most precious asset—its users—could stampede and flee to a safer network. For that to happen, the safer network, decentralized—or, in social networking parlance, “federated”—will have to exist. But federated networks aren’t far off.

Sitting in the room that February night when Moglen voiced his call to action, four young NYU students—Daniel Grippi, Maxwell Salzberg, Raphael Sofaer, and Ilya Zhitomirskiy—took up his challenge.

A few months after Moglen’s speech, the group launched a Kickstarter campaign for a project they called Diaspora*. Diaspora* would be everything Moglen had called for: open-source, respectful of privacy, and controlled by users. Instead of routing all exchanges through a central clearinghouse, Diaspora* users would set up their own nodes, storing their information locally.

The team members quickly raised more than $200,000, plenty to fund a summer in San Francisco and to build the skeleton of their new social network. That fall, they released a “pre-alpha” version, soliciting feedback from other developers. There was plenty of criticism, but most of it was constructive. A year later, last November, the team released a redesigned version that patched the earlier security holes and included a host of new features, many familiar for users of Facebook and Twitter: hashtags, status updates, and “Like” buttons.

Just days later, Zhitomirskiy died suddenly, in what a source close to the company told CNNMoney was a suicide. The loss of Zhitomirskiy—often described as the most idealistic and privacy-conscious member of the group—was a devastating setback, but Diaspora* continues.

Early on, the team recognized that coding a distributed social network might actually be the easy part. It would be harder to persuade users to move from Facebook—the network where all their friends, (past, present, and future) already were—to their new, sparsely populated network.

Their solution was to make Diaspora* play well with others. Sign up for a Diaspora* account, and your posts can easily be imported into Tumblr, Twitter, and even Facebook. In the early stages of its use, Diaspora* can function as a social aggregator, bringing together feeds from various other platforms. The idea is that this lowers the barriers to joining the network, and as more of your friends join, you no longer need to bounce communications through Facebook. Instead, you can communicate directly, securely, and without running exchanges past the prying eyes of Zuckerberg and his business associates.

It probably shouldn’t be surprising that another of the teams building an alternative social network is affiliated with the Occupy movement.

Ed Knutson, a software developer from Milwaukee, became instantly engaged with Occupy Wall Street when the movement first started garnering national headlines early last fall. As the movement spread, Knutson traveled to several East Coast occupations and met with teams to discuss the technology needs of the movement.

“We needed tools for people to communicate more directly, without having to all be in the same physical space,” Knutson says. “A lot of what was happening was very ad hoc, different groups trying to talk to each other across Skype and Twitter. It wasn’t working very well. We needed a platform where people from different occupations could cross-pollinate their ideas.”

In October, a loose team of coders from across the country began collaborating to build that platform.

Knutson was also in touch with members of the Indignados, a Spanish movement that prefigured Occupy Wall Street and served as an early model for the American movement. Together, they began to imagine a network that would leap national boundaries and allow different movements to share information, plans, and expertise. The resulting project, Global Square, overlaps significantly with a more Occupy-specific project called the Federated General Assembly—run largely out of New York by a team coordinated by Sam Boyer.

Boyer’s activist roots date back to his student days at the University of Rochester, where he was active with the Student Trade Justice Campaign, part of the anti–World Trade Organization movement. In 2006, Boyer was a delegate to a meeting of the international coalition Our World Is Not for Sale, joining everyone including organizers from fishing communities in the Philippines to policy wonks from Geneva and Washington. During the meeting, Boyer realized that there was something fundamentally broken about how the group was talking to itself.

“Because so much of the communication was going on over e-mail, it tended to privilege one sort of people—the ones who had the time and means to spend a lot of time reading and sending e-mail,” Boyer says. “It meant that the Western policy-oriented people had a much stronger voice than the activists actually on the ground. There was no way for people who didn’t already have an encyclopedic knowledge of the issues to tap into all the collective knowledge. Basically, the architecture of communication was distorting the conversation.”

So Boyer, who had no previous coding experience, decided to build a better system. He threw himself into computer engineering, taught himself the open-source content-management framework Drupal, and experimented with better ways for activists to communicate.

“I realized we needed a lot of different kinds of spaces: small-process spaces, big-process spaces, taking stuff that happens offline and finding ways to make it happen online.”

By the time Occupy Wall Street had seized Zuccotti Park, Boyer was a well-known figure among Drupal developers, and he decided to leverage his experience and connections to build the occupiers a platform to help them talk to one another.

The result—the Federated General Assembly—won’t receive its first provisional rollout for several months. But as with Diaspora*, early response even to just the idea has been overwhelming.

“We’re actually trying to be sort of careful about talking to the press right now because whenever more people hear about this, we get way more volunteers than we know what to do with,” Boyer says. “Everyone is really excited about this.”

Like Diaspora*, these Occupy projects won’t be run through a single central node of servers. That’s partly an ideological decision, but it’s also a practical one.

“One of the reasons Facebook has to sell information is to cover the massive costs of hosting that information,” Knutson says. “If you distribute that burden and have every little community hosting its own node, your costs drop down to something very manageable, like $20 a month.”

This distribution makes the network more accountable to its users, too. Even if every occupier isn’t running his or her own personal server, the one he or she is using is probably no further away than the occupation’s tech tent. Even better, for those worried about malicious government or corporate interference, the distributed network is much less vulnerable to denial of service attacks, which makes the network much harder to take down.

The goal is to roll out a basic working version of the Federated General Assembly soon, to allow occupiers to use it, find flaws, make suggestions, and build plug-ins on top of it. The basic structure is clear, though: The FGA will be built around the same principles and strengths of the movement it serves. That means the system has to be radically democratic, horizontal, and decentralized. It also means that, just like the Occupy movement itself, the fundamental organizing unit is the group. From the smallest affinity group of friends or working group collaborating on a task to an entire city’s General Assembly, groups and their relationships are at the heart of the FGA.

“At Occupy Wall Street, the groups you’re affiliated with, that’s sort of your identity,” Boyer says. “You say: ‘Hi, I’m Sam. I’m with the Technology Group’ or ‘Hi, I’m visiting this week from Occupy L.A.'”

These affiliations help create context and trust between users and also a variety of online spaces in which different kinds of conversations can take place.

“I like to compare Facebook to communication in preschool,” Boyer says. “The Facebook wall is an incredibly unsophisticated social space. People just spew stuff out. In adult social situations, we read cues, we create norms, we create rules that are there for the purpose of creating conversations that move us forward. That’s what we want to build.”

Much of what the developers are building is specifically tailored to the unique structures and values of the Occupy movement. But they’re also building their networks with an eye on the bigger picture.

“This was born out of the needs of the occupiers, but we by no means wish to restrict what we’re building to just the Occupy movement,” Knutson says. “I think this can have a big effect on social networking more generally. Ironically, I could actually see this having broad implications in the corporate world as well—anything where you’re working with a team made of groups scattered around the world.”

The key, Knutson says, is to recognize that oftentimes the most important thing is to get out of the way of the users. “If you look at any social network, the functionality that’s provided is a relatively small part of the network,” he says. “Most of the value is in the people involved, the network itself, the connections between actual people.”

Given the current time frame, it’s entirely possible that Facebook’s public offering could take place the same day that the Federated General Assembly or Global Square launch their first rough versions. Nobody expects these early iterations, or even the somewhat more polished alternative of Diaspora*, to make Facebook or its investors so much as blink anytime soon.

But Moglen cautions patience.

“Free software moves more slowly because there isn’t any money in it,” Moglen says. “But that doesn’t mean it doesn’t eventually get there. Facebook can only give people what it’s already given them. But in the future, they can have all of that, plus the privacy they’d like. It’s true: People will give up freedom for convenience, but if you give them both, eventually, they choose the option with freedom.”

Boyer isn’t convinced that any of these new social networks will lead Facebook to collapse in the near future.

“I think it’s possible that Facebook will still be around in five years, and even in 10,” Boyer says. “But I’d like to see it recede into only being used for that single, simple purpose that it ultimately serves very well, which I continue to use it for: finding that person that I met a million years ago. The rest of it, we can do better.”

Moglen is less cautious.

“The thesis behind the Facebook IPO is we now have 1 billion people trapped, and soon we’ll have 2 billion,” Moglen says. “But that’s not going to happen. We’re going to have federated social networking in a matter of months—probably more than 12 but a lot less than 120. So somewhere between 12 and 120 months from now, Facebook is going to cease to exist.”

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