Facebook's ten biggest strategic mistakes

The ten most significant blunders that the company has made in its short history


To succeed, one must take risks. And taking risks involves the possibility of failure. So is it any surprise that Facebook's success hasn't come without spectacular failures, flops and nosedives?

On the road to collecting over 500 million users and amassing connections to more than 2.5 million websites, Facebook and its billionaire CEO Mark Zuckerberg have failed spectacularly at times. We've seen homepage redesigns that sparked user revolts, privacy-busting advertising schemes that backfired and other missteps that have prompted people to scratch their head and say, "What was Facebook thinking?"

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In 2007 Facebook launched Beacon to allow users to share their online purchases with their Facebook friends. The company billed the new service as "a new way to socially distribute information on Facebook." But users soon revolted against Beacon after secret online purchases such as engagement rings and Christmas gifts started popping up in public news feeds.

Facebook agreed to shutter Beacon in 2009 and to set up a $9.5 million fund for a non-profit foundation called the Facebook Safety Advisory Board, which consults with Facebook about online safety issues.

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User fails

Despite extensive coverage of the pitfalls of revealing too much information online, people still love to live carefree on the web. An early example of the problems of oversharing occurred in 2006 when party photos of Pierce Bush, nephew of then president George W. Bush, were retrieved from his Facebook page by a gossip site. The event served as a lesson in how easily content posted online can be widely seen and accessed.

Concerns over data leaks haven't stopped people from posting embarrassing things on the social network, as exemplified by sites such as Lamebook, Facebookfails and Failbook.

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Facebook source code leak

Facebook's IT staff made a mistake configuring one of its web servers in 2007, causing some of the source code that powers the website to be exposed to users. It didn't take long for a Facebook-centric blog to copy and repost the code online. The code was up for only a short time, but some people believed that it had the potential to reveal security holes that hackers could use for malicious attacks. Facebook later said the code leak was related only to the user interface and offered "no useful insight into the inner workings of Facebook," according to TechCrunch.

The blog that initially revealed the source code is no longer online, and such inadvertent Facebook leaks haven't happened again.

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TOS tiff

Facebook was in the hot seat in early 2009 when it made changes to its terms of service that many people interpreted as Facebook's attempt to claim ownership over user-submitted content, including photos, videos and status updates. Facebook's argument that the new terms were just a bunch of legal gobbledygook the lawyers wanted, and that users should just trust Facebook to do the right thing, didn't smooth things over.

Facebook reverted to its old TOS and created a more democratic process for TOS changes that allows users to participate through voting and public comment.

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Page redesigns

Facebook is famous for instituting homepage redesigns, and a number of people always grumble about the changes. But Facebook's biggest backlash from a visual overhaul came in 2009, when the social network made its second major page redesign in less than a year. About 2 million people screamed over the changes, ultimately forcing Facebook to relent to user demands.

Facebook still likes to tweak the homepage, having done so most recently in early 2010, but it has not encountered another backlash on a par with the great user revolt of '09.

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User chat leak

A short lived bug in Facebook's software allowed users to view the private instant messaging chats and pending friend requests of other Facebook users with just a few clicks.

Facebook patched the hole relatively quickly, but some of your friends may still not be speaking to you.

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Interview fail

Amid concerns about Facebook's privacy policies, the company's vice president for public policy, Elliot Schrage, answered questions from New York Times readers. Facebook hoped to use the interview to allay user concerns over privacy and data leak issues, but Schrage's answers merely engendered further outrage.

The furore over Facebook's privacy and data retention policies has largely subsided, at least for the moment. Facebook has also taken some important steps to address its shortcomings, such as introducing a data export feature and improved (but not simplified) privacy controls.

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The Nixon moment

After enduring prolonged criticism of his awkwardness with the media and several months of backlash over privacy issues, Facebook CEO Mark Zuckerberg gave a disastrous interview with Kara Swisher and Walt Mossberg during the D8 Conference. Zuckerberg's answers were rambling, confusing and incoherent, and things took a turn for the worse when the young CEO started sweating profusely under the stage's hot lights.

Zuckerberg has since emerged as a more confident CEO, and his interview presence has greatly improved. The social network has also made strides with its privacy and user data controls, allowing users to have more direct control over their information. But as the recent home address fiasco shows, Facebook still has room for improvement when it comes to privacy.

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Home address sharing

In January, Facebook gave third party applications and websites the option to request a user's home address and mobile phone number if the user had shared that information on Facebook. The new service was supposed to make it easier to fill out website membership forms, among other practical uses. But the feature also had the potential to open up private information to unscrupulous third party developers, such as the small number of developers that (as Facebook discovered in November) were selling user information to marketing firms.

Facebook backed off its home address sharing plan, but said it would relaunch the feature with more robust privacy controls in the future.

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Facebook goes to the dogs

Following heavy criticism over the site's privacy policies in 2009 and 2010, a controversial movie detailing the social network's founding, and more flops than you can shake a stick at, Facebook and its CEO have emerged more confident with the media and more popular than ever with users. But newfound popularity can sometimes lead to odd results, such as the media's never ending coverage of the Facebook fan page for Zuckerberg's new dog, Beast.

It's unclear how long Zuckerberg's romance with the media will continue. But if the Facebook CEO announces a wedding to longtime girlfriend Priscilla Chan anytime soon, the nuptials may rival Prince William's wedding as the matrimonial event of the decade.

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