Competitors seize on troubles of Facebook

It sounds like a kamikaze mission: an upstart with a meagre number of users and no capital squaring off against Facebook, a social networking juggernaut with more than 400 million members and a $15 billion valuation.
But despite those odds, a handful of start-ups are eyeing the social networking industry with renewed interest.

The newfound infusion of confidence comes, in part, from the recent scrutiny focused on Facebook over revisions to its platform and privacy policy that encourage its members to make personal information accessible to anyone on the Internet.
“Right now is the perfect time for us,” said Leo Shimizu, co-founder of a company called Pip.io, which he describes as a social operating system. “People are starting to understand the limitations of Facebook while we’re showing off a product with features that everybody is wanting and didn’t know existed.”

Pip.io is similar to Facebook and Twitter in that it allows its members to post status updates, send messages and connect with friends. But unlike its counterparts, the service allows its users to keep more of the information private.
The service, which completed a test phase in February, has just 20,000 registered members — a drop in the bucket compared with Facebook. But Shimizu remains undaunted.

“The market opportunity is one of a kind, and it’s up to us to capitalise on it,” he said.
Analysts and industry experts are quick to point out that Facebook has dealt with a number of user protests in its six-year history and emerged unscathed each time, continuing to add new users at a record clip. For many users, the web site is an irreplaceable nexus of friends, relatives and colleagues online, making it difficult to abandon.

But while there may not yet be any notable challengers to Facebook’s momentum, said Ray Valdes, an analyst at the research firm Gartner, the company could be accumulating enough damage to its reputation that if a worthy opponent emerges, it will have a ready base of people willing to jump ship.

“Facebook is pushing to the edge of users’ comfort zone,” he said. “It has certainly planted a seed in some users’ minds to look for an exit door.”
Also offering a note of courage to hopeful entrepreneurs is the fickle taste of web denizens. A service that is in vogue one year can just as easily be out of style the next.
“There’s always a cycle of what’s popular in Silicon Valley,” said Shimizu, citing the decline of services like MySpace, Friendster and AOL. “The Facebook experience can be better, and if we can do that, we can open up a new market.”

A primary reason that Facebook grew to become a central hub of the social networking world is its continuous effort to improve the service by adding new features, said Mikolaj Jan Piskorski, a professor at the Harvard Business School who studies social networks. “When you look back at how little MySpace changed between 2005 and 2007, it’s staggering,” Piskorski said.
“For Facebook to be taken over, there would need to be a drastic slowdown in the rate of innovation. It would take a lot of work to undermine what Facebook has achieved so far.”

Michael Chisari, a developer in Chicago, said the escalating privacy concerns around Facebook spurred him to resurrect Appleseed, an open source project to develop free software that would allow users to set up their own social networking hubs.
“In the past month, there has been a sea change in the number of people looking for alternatives,” he said. “A year ago, nobody was interested in my project, and now I have about 80 supporters signed up.”

Cashing in
Evelyn Castillo-Bach, an entrepreneur in Florida who created a small, subscription-based site exclusively for students called Collegiate Nation, said she was quickly introducing a version of the platform that anyone would be able join.
“As the drumbeat and awareness for Facebook’s disregard of privacy increased, I realised I shouldn’t delay this,” she said. “Clearly the time is now.”
Castillo-Bach said she was well aware of the challenges her site, which is called UmeNow and is scheduled to start this month, faces against a behemoth like Facebook. “We’re a little David,” she said. “My goal is not to become the next Facebook or Twitter but to provide a platform for people who do value their privacy but still want to connect and share information.”

It is difficult to quantify how many Facebookers are frustrated enough to hit the delete button and go searching for greener pastures. One measure is a Web site called QuitFacebookDay, which is calling for Facebook users to close their accounts en masse on May 31 and has attracted nearly 13,000 commitments so far. Another site, called FacebookProtest, which is asking disgruntled users to boycott the Web site on June 6 by not logging in, has drawn roughly 3,000 supporters. In addition, a group on Facebook created to protest recent changes has swelled to more than 2.2 million members.
Matthew Milan, co-creator of QuitFacebookDay.com, said he was so disturbed by the company’s rapidly evolving privacy policy that he had decided it was time to close his account. “I’m not interested in having my data somewhere I can’t trust what is going to happen to it,” he said.

Milan said that in lieu of Facebook, he planned to use Flickr for photo uploading and sharing, LinkedIn for business contacts and Twitter for news and updates.
“For all my important contacts, I’ve got their e-mails and phone numbers,” he said. “Those still seem to work.”

According to Facebook though there has been no change in the rate of deactivations in the last few weeks. Perhaps in an effort to tamp the growing chorus of complaints, the company has announced plans to simplify its complex menu of privacy controls, which currently includes more than 170 options.

Austin Chang, a New York entrepreneur, is testing a web site called The Fridge that allows people to invite friends from Facebook and Twitter to join a private “fridge” or group to chit-chat and share photos.
“There is an audience out there looking for options. We’d love to address that, and the timing is just great.”
The New York Times