Facebook Fails to Understand the Pseudonymous Internet

I have a new essay on Internet Evolution that I'm really proud of, in which I argue that Facebook's poor performance on the stock market is largely caused by a core flawed assumption in the social network's trategy: That the use of real names, as its own IPO statement says, will "create more engaging and meaningful experiences". Instead, I argue, Facebook is contributing to its own decline in activity, as people seek places online to express who they really are, unfettered from Facebook and its restrictions on their real-life names:

Outside its well-trimmed gates, the pseudonymous Internet will continue to grow and thrive -- not just on Twitter, but on all the many other online sites where pseudonyms still dominate, such as YouTube, Reddit, and Flickr... [then there's] the total user base of virtual worlds and MMO games, where people express themselves through avatar names, is probably over 200 million.

More here, and please feel free to join the conversation already in progress in IE comments.

Comments

[Tom Boellstorff]

Excellent and insightful piece! Easier to leave a quick message here so am doing that, but I encourage people to read the piece.

[Cisop Sixpence]

Back in the early days of the Internet, you didn't put your 'real name' online as someone could find you, do you physical or financial harm. Oddly enough their are some that advocate putting real data about your self online, despite the risk being even greater today. There is also the point that this article brings up. Many people actually blossom by not being burdened by the history that their real name brings with it. I for one am a classic example. You wouldn't catch me on line with my birth name, but with a pseudonym, I've become quite the activist, standing up for truth, justice and the American way... Oh wait, that was Superman. Well, anyway - I've become outspoken. ツ

[Pussycat Catnap]

I'm with Hamlet on this one.

I think people were 'scared [...]-less' when it started coming out that folks were getting required by their employers to hand over Facebook passwords or go get on the government dole.

- That, and a string of incidents, leading right up to the US Supreme Court - showing that you could be fired for posting on Facebook personal things that had -NOTHING- to do with your employment, not posted from work, nor even reference your work anywhere on the account...

And that level of 'real identity' just cannot be used for personal space. More and more folks are seeing this, and over time its going to drive the downfall of the platform.

[shockwave yareach]

Early on, we are taught to never give out your address to strangers. To not use your real name, your phone number, tell people where you work, etc.

Then Facebook demands that we tell them our real names, our addresses, phone numbers, where we work, who friends and family are, what hours of the day we aren't home, etc...

[Pussycat Catnap]

Curiously, your article is posted on a website that requires me to give them my phone number and more to register in order to comment... :)

[Hamlet Au]

I don't think that's obligatory.

@Tom Boellstorff: Thanks much, Tom, high praise coming from you!

[Nalates Urriah]

I think you are correct when it comes to people wanting to participate. I have several friends that refuse to do FB because they want privacy.

The decline in FB value is more likely due to their poor advertising performance. When was the last time you went to FB to look for or buy a book or shoes?

I'm guessing their click-through is horrible.

[Ciaran Laval]

Facebook comments certainly stifle debate, whether that stifles its overall worth I don't know but I agree with something in the linked article regarding Twitter being able to get real interests about people because they can be pseudonymnous, that certainly gives Twitter an advantage.

I've long argued that pseudonyms are a better fit and that advertisers don't need to know your name, but your interests.

[Hamlet Au]

"When was the last time you went to FB to look for or buy a book or shoes?"

One big problem with FB ads -- you're often afraid to express interest in products you actually want, because then your RL name will be tied to it, and your friends/family might ridicule/condemn/distance you because of it.

[Pussycat Catnap]

"One big problem with FB ads -- you're often afraid to express interest in products you actually want, because then your RL name will be tied to it, and your friends/family might ridicule/condemn/distance you because of it."

I'm reminded of the scene in Austin Powers where he's gathering his effects after being unfrozen from the 1960s... :D

http://www.youtube.com/watch?v=3WCvULMRUq8

[elizabeth (16)]

i think is not that fb fail to understand the nym. i think is more that they not care about it. either do their users for that part of their online

+

i have a fb for my reals. nyms for my unreals other places. so do most my family and friends. is not a biggy for any of us really. to make that distinction and act according to whatever scene we might be signed into at the time

[Iggy]

I teach nothing but upwardly mobile Millennials. They loathe pseudonyms and such. I won't go on at length about this, but FB has simply reached saturation among US kids. Perhaps FB could grow by changing it's policies, but not with the college kids who were its original audience.

[Dave Bell]

The big problem with real names is that they are not globally unique.

And the combination of the Facebook real-name policy with LL's apparent infatuation with Facebook, that's worrying. Do I want to link my RL name with the identity I have in SL? I am the same person. Linden Labs know who I am anyway. But do I want to make it easy for a stranger to make the connection?

[Dave Bell]

As for the Facebook IPO, there look to have been shenanigans. The initial price, the offer, isn't a price set by any market. It's supposed to be the best guess by a bunch of well-informed professionals, and they rarely get it right. There can be some deliberate bias, but the drop in price from the IPO level was so big and so fast, and some of the other features of the IPO were reported to be a little unusual.

So I don't think the Facebook figures tell us anything, yet. Except, maybe, that the IPO was grossly over-valued. There's still way too much noise in the signal. Pushing the analogy to the limit, we aren't quite tuned in.

But some people have pocketed quite a few million dollars more than they might have done.

[Emperor Norton]

Iggy @ I teach nothing but upwardly mobile Millennials. They loathe pseudonyms and such. I won't go on at length about this"

So you have all these Millennials entering the work force who have no private lives and all these old school boomer managers who think who think bike riding on the weekends is as radical a hobby that is acceptable and all employees should be genderless drones.

This is going to be fun.

[Pussycat Catnap]

"I teach nothing but upwardly mobile Millennials. They loathe pseudonyms and such. I won't go on at length about this, but FB has simply reached saturation among US kids."

I believe this is a false assumption driven by that generation simply using the platform.

It fails to consider that so too do other generations. And said generation ALSo uses pseudonyms on twitter and other social media - to include MMOs, IMVU, and so on. Facespam is pretty much the -ONLY- place they use real names.

- And those are mostly teens and college age. People who have yet to be exposed to the costs of their actions, choices, lifestyle, and even points of curiosity.

The same set who, when I went back to school; would have to be lectured almost weekly about what they say online, and about the need to stop posting self-porn in the same week they were sending out resumes...

These kids don't prefer pseudonyms, they just haven't learned better yet.

Saying they prefer them is like saying that generation prefers being drunk, stoned, and photographed topless with beads around their neck...

- Yeah, while they're kids they do... but then at about 25 they wake up and freak out...

There's a small but growing industry dedicated to erasing your past online. Its only going to get a LOT bigger, but its limited because some of those things just can't be erased...

Instead, we're going to face a whole generation who's elders lock them out of the job market over what they tagged on Facebook during web 2.0...
...and probably the kids 10 years after them will get those jobs, for having had a little more discretion ingrained in at an earlier age...

[Pussycat Catnap]

Edit to above:

These kids don't prefer pseudonyms, they just haven't learned better yet.

SHOULD HAVE BEEN:

These kids don't prefer -avoiding pseudonyms-, they just haven't learned better yet.

This is the first generation in human history that has had to face this cost of no privacy.

In the past even the most radical outspoken wacko on a street corner with a sign, even photographed, did not undergo the level of loss of privacy for that speech that these kids undergo just by tagging a picture of themselves at a local pizza joint.

They're too young to know the damage that is being done to them. But that doesn't mean the damage isn't there.

[Pathfinder]

Pusscat Catnip said "These kids don't prefer -avoiding pseudonyms-, they just haven't learned better yet."

Bingo.

[Gwyneth Llewelyn]

Yay, I'm glad to see that you're back on the Right Side of the Nymwars, Hamlet :) (Or should I say "Wagner James"? :-) You'll always be Hamlet to me...)

More seriously, I believe the issue is quite complex and that it's not only the lack of pseudonymity that is hurting Facebook (it also hurts Google+, too... which I believe will "fail" like any other attempt done by Google so far to capture a social environment, unless they lift their "real name" policy completely as well, and provide us with working APIs...). That it hurts, I have no question — moving from my own account to a feature-poor Facebook Page meant losing thousands of followers and being unable to register for almost all sites that are Facebook-ready (to be honest to Facebook, they do provide an API to allow registration with a Page instead of an account, but hardly anyone — Ping.fm, soon to be discontinued, being an exception — implements it). Thus, for all purposes, the joy of using Facebook (if there was any) has been completely lost, for all of us who have been ostracised and kicked out.

Does this actually affect Facebook's stock value? That's a tricky one. In a recent WWDC announcement, Apple's new CEO stabbed at Facebook. Fully knowing that Facebook touts 800 or more million users, Apple said that they have now 400 million iTunes customers. Paying customers, that is. 400 million who spent at least one dollar on iTunes. Apple couldn't care less about the millions who aren't customers. But they're begging the question: of those 800+ million Facebook customers, how many have actually directly contributed to Facebook's financial solidity? Heh. Very few. Facebook survives thanks to ads, but the trouble is that they sell little more than Microsoft — which has been much neglected by the Internet experts and opinion-makers. But the truth is that Microsoft, even after being dumped by Facebook as their ad provider, still makes a bit over a billion US$ in ad sales, pretty much the same as Facebook, Inc. That's nothing compared to Google's $42 billion, of course. But it rather puts things into perspective: Facebook is not generating that much money from 800 million users. If they could get all 2 billion Internet users on Facebook, they would just duplicate their ad revenue. Pfft. True Internet giants would just laugh at that. So much effort for a few dollars...

No, the IPO was just what I call a "legal scam". It had one single purpose: make its owners filthy rich, and laugh at anyone who thought they could become rich as well. I unfortunately had the same experience a decade ago, when the dot-com bubble was ready to burst, and IPOs were launched just to make the main shareholders filthy rich and then dump the company as being worthless. Zuckerberg is doing exactly the same. For all we know, he could drop Facebook tomorrow and start implementing SeekOut and make another few billions with a new IPO, because he's not going to make any more substantial amount of money from Facebook any longer, and neither is the Russian Mafia who were its biggest funders.

I don't think that Facebook will "fail", though, and possibly not by 2020. Facebook is too big, and the only two "serious alternatives" to what Facebook provides are Google+ (with little success); and Diaspora (with even less success), which is a federated, open-source network providing the same concepts. Twitter, Pinterest, BO.LT and so on are different concepts struggling to interconnect and communicate, and so I don't see them directly "competing" with Facebook just because they're so different conceptually. It's not a choice between anti-pseudonymous Facebook and pseudonym-friendly Twitter. Both have their specific targets in mind, and Facebook's market is simply larger.

The discussion around what kids will do in a decade or two when all their information is exposed for potential employers to see is actually a much more important one. There is a serious need in educating the public about the real problems of lack of privacy. I have seen lectures and conferences, addressed to parents and educators, to explain them what's the issue. Psychologists, specially pedo-psychologists, are also raising some public awareness to the dangers of "too little privacy". But the cat's out of the bag, and it might be too late to heal the damage that was already done...

[Alazarin Mobius]

Well said, Pussycat, Ciaran and Shockwave. I dread to think what the fallout's going to be like when today's kids find their schoolday shinanegans paraded to them at job interviews. There's going to be an outcry for internet privacy and psuedonymous accounts.

Yes, Linden Lab has RL info of its premium account members of whom I am one. The difference between them and FB is a matter of trust. LL doesn't pimp my details to all and sundry, FB does. FWIW, Google+ is even worse in that respect. Thank you LL for trusting your customers and acting responsibly.

Actually there's a market opening for LL or anyone who wants to pursue it: That of an 'Honest Broker' where people can register a psudonym and keeps their personal info secure. It might work but the temptation to sell that data in hard times could be overwhelming.