Vogel Internet, Information Technology and e-Discovery Blog : Texas Internet, Information Technology, eCommerce & E-Discovery Lawyer & Attorney Peter S. Vogel : Gardere Wynne Sewell Law Firm : Dallas TX

A proposed law in Germany will restrict employers from using Facebook, and other truly social Social Media sites, when recruiting. However the law would allow employers to search business Social Media sites such as LinkedIn. Since there are no current guidelines in Germany about employer’s use of Social Media content these new laws will help establish guidelines. Of course there are no specific guidelines in the US where about 30% of the estimated 500 million Facebook users reside. Currently most employers review Social Media postings to make hiring decisions and until judicial reviews and statutes are enacted this will continue. However what people post of Facebook, and other Social Media sites, is often quite amazing which is why Eric Schmidt (Google CEO) recently opined that “people will one day change their name and reinvent themselves in order to escape their digital past.”

Most People Don’t Want to be Located

Facebook’s new location based Places has sparked new privacy issues about disclosing one’s whereabouts from the GPS cell devices that we carry. However according to Forrester Research only about 4% of Americans have adopted these location based services notwithstanding a recent report indicated that venture “capitalists have poured $115 million into location start-ups since last year, … and companies like Starbucks and Gap have offered special deals to users of such services who visited their stores… Shopkick, which became available this month, offers coupons to people when they walk into stores like Best Buy and Macy’s.” Nonetheless many people feel that their privacy is compromised by disclosing their location, so location based Social Media will be an interesting social evolution to watch.

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A court recently ruled that the use of GPS tracking data in a drug distribution case violated the defendant's constitutional rights and the police needed a warrant. The Electronic Frontier Foundation filed a brief in support of Antoine Jones that his expectation of privacy was violated by the GPS device placed on his vehicle. The US Court of Appeals for the District of Columbia overturned Jones conviction in the case of US v. Maynard. One may wonder if the GPS was tracked from a cell phone if the outcome would have been different. Since our cell phones have GPS data, it is any wonder that police might use the GPS cell data to track us? This court decision apparently protects us, at least for the time being.

Facebook About to Release Geolocation Features

A recent report indicates that Facebook will provide “location-aware data to become a part of existing platform applications,” which will compete with Foursquare and Twitter Places. Facebook already owns Hot Potato which is a check-in service and offered to buy Foursquare for $120 million which was rejected. Clearly Social Media is using geolocation data, and this will definitely grow! How courts rule about the use of GPS and geolocation data in Social Media in the wake of the the Maynard case will be interesting to monitor.

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A recent report that the White House wants the FBI to have access to an individual’s Internet activity may help with investigation of terrorism or intelligence, but what about our expectation of privacy? Notwithstanding all of Mark Zuckerberg’s recent comments about privacy, last winter Zuckerberg he told a live audience that if he were to ‘create Facebook again today, user information would by default be public.’ Also Google CEO Eric Schmidt admitted in a CNBC interview that under the US Patriot Act that Google would turn over user information (which Google maintains for 18 months) without question. So maybe we have less privacy than we may think, but in the name of national security alone does it make sense for the White House/FBI to not even both getting a federal judge to issue a subpoena?

COMPANY PRIVACY: Social Engineer Defcon Contest

At the annual Defcon meetings (July 30-August 1) in Las Vegas there was a 3 day contest to see which Social Engineer could get the most company data from 30 companies. The FBI is not too happy, but after consulting lawyers from the Electronic Frontier Foundation the following contest rules were created:

Each Social Engineer is sent via email a dossier with the name and URL of their target company chosen from the pool of submitted names.

Pre-Defcon you are allowed to gather any type of information you can glean from the WWW, their websites, Google searches and by using other passive information gathering techniques. You are prohibited from calling, emailing or contacting the company in any way before the Defcon event. We will be monitoring this and points will be deducted for “cheating”.

The goal is to gather points for the information obtained and plan a realistic and appropriate attack vector. The point system will be revealed during the Defcon event. All information should be stored in a professional looking report. 1 week prior to Defcon you will submit your dossiers for review to the judging panel.

Stay tuned to see how successful the Social Engineers were in getting information from these 30 companies. How easy will it be to get information? We all know the answer, pretty easy!
 

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A new report shows that customers are not that happy with Facebook and MySpace also showed that social media was ranked lower than property & casualty insurance. Also not a surprise that airlines were lower in customer satisfaction than social media. The 2010 American Customer Satisfaction Index (ACSI) was produced in partnership with ForeSee Results is described in the Annual E-Business Report. ACSI scores for Wikipedia topped the Social Media score with a 77, followed by YouTube (Google) 73, Facebook 64, and MySpace 63. IRS scored a 65. Not a surprise that the primary reasons for low rankings for Facebook were: “privacy and security concerns, the technology that controls the news feeds, advertising, the constant and unpredictable interface changes, spam, navigation troubles, annoying applications with constant notifications, and functionality, to name a few.” Interesting customer results at a time with Facebook announced that it had 500 million users and Mark Zuckerberg is sued over an ownership claim!

Facebook a Utility?

In a recent interview on National Public Radio (NPR) Facebook CEO and founder Mark Zuckerberg described his company as a utility for its subscribers “….When I say utility, I mean we are trying to provide people with utility,...Our goal was never to build something cool. It was to build something useful." As part of this interview it was pointed out that Facebook has the largest private database of personal information in the world. When pressed about why Facebook wouldn’t disclose the contents of the database, Zuckberg responded that people would no longer trust Facebook if the database was disclosed. So if Facebook is a utility used by 500 million people, why is it not regulated?
 

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Growth at Facebook has been unbelievable and not a surprise that its user rolls will get to 500 million, but last fall a childhood friend died, and a few months later I was taken aback after Facebook asked me to post on his wall. Since so many new Facebook users are grandparents and over 60 more and more Facebook members will be dying sooner rather than later. A recent article questioned how Facebook determines that some members have died so they can be removed from Facebook, or whether pages should be saved as a memorial. Interesting issue, but then again, if members are never deleted how can one be sure that there are really 500 million members… once someone joins Facebook maybe they stay forever.

On Facebook, Telling Teachers How Much They Meant

One nice benefit of Facebook and Social Media is the ability to find old friends, and a recent article in the New York Times told the story of a 49 year woman who found her high school teacher on Facebook. This teacher apparently had a significant impact on the student’s life and former student spent years searching the Internet to find the old teacher. Social Media allowed this connection to take place.

Do You Have a Phone Book?

A couple of years ago an older woman was lost in my neighborhood, so she stopped me to ask for directions. Unfortunately she did not have an address, only a name so she asked me to look in my white pages. She seemed amazed that I didn’t have any white pages, let alone yellow pages. The Internet has changed so much, it seems like not all that long ago people looked in phone books to find people, and now most of us rely on the Internet and don’t have white pages or yellow pages. Without question Social Media is transforming communications even more…stay tuned for more change.

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A Judge ruled that Facebook wall postings and MySpace comments may not be subpoenaed based on the 1986 Stored Communications Act which is the same statute before the US Supreme Court in Quon v. Arch Wireless. US District Judge Margaret Morrow’s May 26, 2010 37 page Order in Buckley H. Crispin v. Christian Audigier, Inc. et al reversed a ruling from an US Magistrate Judge that defendants in a copyright infringement case could not subpoena private message on Facebook MySpace. This ruling is particularly interesting since the April 7, 2010 White House Order that all postings on blogs and social media sites are public meetings under federal law. Clearly courts will be vexed by these complex issues as social media continues to grow and change communications. It is any wonder that the 1986 Stored Communications Act may need to be updated or totally replaced since clearly the courts and the White are not in synch?

Yahoo! Plans its Social Media

With 280 million email users it’s no wonder that Yahoo! will launch its social media services to allow exchange of comments, pictures, and the like. Given all the current issues with Facebook privacy and Google’s Buzz it’s no wonder that Yahoo! head of privacy claimed that “ We’ve been watching and trying to be thoughtful about our approach.” Clearly we will all be watching to see the impact of Yahoo! entry into social media, particularly as Yahoo! search engine decline in popularity in the US. Will email traffic overcome the lack of search engine traffic?

More Google Wi-Fi Woes – Now Canada

Recent reports now indicate that the Privacy Commissioner of Canada started an investigation about Google collection of Wi-Fi network data. Since Germany, France, Italy, and the Czech Republic are investigating Canada’s entry into the fray is no surprise. Google’s defense that other companies including Skyhook and organizations like the German Fraunhofer Institute does not seem to be much help at this juncture. The outcome of the Wi-Fi privacy issues may also impact Google maps which are tied together.

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Facebook CEO Mark Zuckerman recently announced significant changes to Facebook expanding 100’s of websites with "open graph" and  “like” which may revolutionize the Internet. At the annual f8 Facebook outside developers’ conference on April 21, 2010 Zuckerman demonstrated "open graph" and how the use of “like” on hundreds of websites (including Yelp, CNN, Pandora, ESPN, and IMDb) will allow the 400+ million friends to share their likes which in turn will be posted to their Facebook pages. According to Mashable.com Facebook “has created a platform that allows sites and apps to share information about users in order to tailor offers, features and services to each one’s interests and tastes — even if that individual has never visited the site before.” Zuckerman explained how most information on the Internet is lost in time once posted, referring to a tweets, text messages, and the like, but the new Facebook "open graph" and "like" will permit information to live forever on the Internet.

Microsoft Docs on Facebook

In conjunction with the f8 conference Microsoft announced a new beta for Docs on Facebook to facilitate access to Microsoft apps through Facebook that “allows users to create, edit and share Word, Excel and PowerPoint documents via the new Docs.com Website. Users can then share those documents with their Facebook friends, as well as give them editing privileges.” Microsoft’s collaboration with Microsoft is clearly competition for Google, Google apps, and the new Google Buzz.

Senator Doesn’t “Like” Facebook’s Instant Personalization Features

Under the new "open graph" and "like" Facebook automatically changed the privacy features, so within days of Facebook’s announcement Senator Charles Schumer of New York wrote a letter to the FTC “urging them to create privacy guidelines for Facebook and other social networking sites.” We need to watch closely to see what, if anything, the FTC may do. My blog on January 14, 2010 included a link to an interview with Zuckerman where he commented that the age of privacy is over. So perhaps he was referring to the new "open graph" and "like" features may be part of his plan to actually make that happen

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For purposes of dealing with web 2.0 the White House Memo released on April 7, 2010 about social media specifically states that “interactive meeting tools—including but not limited to public conference calls, webinars, blogs, discussion boards, forums, message boards, chat sessions, social networks, and online communities—to be equivalent to in-person public meetings.” The White House Memo is a follow-up to President Obama’s January 21, 2009 (day after the President was sworn-in) “calling for the establishment of ‘a system of transparency, public participation, and collaboration.’” Fascinating development that blogs, Facebook, LinkedIn, Twitter, MySpace, Yelp, and the like are public meetings which means that one should expect little privacy from use of these online services.

Majority of Government Agencies Use Social Networks

This report states that a majority of government agencies now use social networks is hardly a news flash, but put in context of the White House’s Memo that use of social networks are public meetings may change the public view of how they communicate. Of the 400+ million Facebook members of an estimated 70% are outside the US, and one may wonder how communications across international borders impacts the declaration that social media is public meetings.

Yelp and the Business of Extortion 2.0

This recently filed class action suit accuses Yelp of extortion to get bad comments removed from Yelp and lower rankings by reviewers. It remains to be seen whether this case will succeed, but if Yelp is considered a public meeting by the White House it makes one wonder how extortion fits in. Not to mention that the 50 million a day of tweets on Twitter are considered public meetings, even though at least 14,000 are followers of a Doonesbury’s cartoon character Roland Hedley! Web 2.0 is definitely taking us in interesting directions!

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Hitwise reports that Facebook became the most visited website in the US for the first time. Kind of takes your breath away that a social media site is getting more traffic than the largest search engine in the US. Since Facebook just went over 400 million users this was probably inevitable, but since Facebook is also starting its own email system, Titan, it’s likely Facebook traffic will continue to expand.

Internet Jurisdiction Makes Life Interesting

My friend Victoria Van Buren blogged about my Texas Bar Journal Article for March about Internet Jurisdiction, but the March 2010 issue is entitled “The Attorney and Social Media” and here are other articles of interest:

My friend John Browning organized these articles which I think are most timely and interesting.

3rd Circuit Bars Child Porn Prosecution of Teen in Sexting Photo

Some headline in the ABA Journal that “upheld an injunction that bars the child pornography prosecution of a teen girl in Pennsylvania who appeared topless in a photo that ended up on high school students’ cell phones.” The court did reach the question whether sexting photos are free speech protected under the First Amendment because the prosecutor over-reacted and threatened the teenager. Unfortunately we will continue to see more sexting cases as Web 2.0 grows whether we like it or not.

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The Robert S. Mueller III's (FBI Director) warning is not a surprise but how the IT community deals with these threats impact us all. Homeland Security Secretary Janet Napolitano “admitted there is an urgent need to step up efforts to protect Americans from cyber attacks.” Also Ms. Napolitano’s predecessor Michael Chertoff, former DHS secretary, under President George W Bush, agreed. "We are seeing in the intervening time the adversaries, whether they be criminals or nation states or terrorists, are not taking time off. So with each passing year, the need to move faster becomes greater." So far new the Cyber Czar as been low profile, but based on these presentations at the recent RSA Conference that low profile cannot continue.

Cyber Crime: A Clear and Present Danger

Deloitte’s recent white paper is the result of the 2010 CSO (Chief Security Officer) CyberSecurity Watch Survey in conjunction with the CSO Magazine, the US Secret Service, and the CERT Coordination Center at Carnegie Mellon. The white paper concludes that:

Data is more valuable than money. Once spent, money is gone, but data can be used and reused to produce more money. The ability to reuse data to access on-line banking applications, authorize and activate credit cards, or access organization networks has enable cyber criminals to create an extensive archive of data for ongoing illicit activities.

There is a clear message about how vulnerable businesses are and how every business must be vigilant or risk great damages.

Tweet this: Social Network Security is Risky Business

With the recent report of 50 million tweets a day it’s no wonder that a panel at the RSA Conference devoted a great deal of discussion to how vulnerable social networks are. Cybercrime is so easy because users of Facebook, Twitter, and MySpace are easy marks since the feel at ease communicating with their “friends.” However cybercriminals can more easily Web 2.0 commit cyber crime because most “…users are willing to click if they think, 'It's my friend. I'm OK, because I'm inside my network and that's Fred. Only it's not Fred, it's Fred's hijacked account." So all in all, things are becoming more dangerous and apparently businesses and web 2.0 social networkers are still not getting the scope of their risk!
 

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After the news reports about the cyber attacks in China it’s no wonder that that more than “75,000 computer systems at nearly 2,500 companies in the United States and around the world have been hacked in what appears to be one of the largest and most sophisticated attacks by cyber criminals discovered to date.” Unfortunately those computer systems hacked included the US government, “educational institutions, energy firms, financial companies, and Internet service providers. “ Included were access to “e-mail systems, online banking accounts, Facebook, Yahoo, Hotmail and other social network credentials, along with more than 2,000 digital security certificates and a significant cache of personal identity information.” Doesn’t sound much security given these facts, and this is pretty scary since we now have a Cyber Czar to protect us.

Kneber bot

Amit Yoran, NetWitness's chief executive reported how the Kneber bot was launched in this attack on the +75,000 computer systems:

The hackers lured unsuspecting employees at targeted firms to download infected software from sites controlled by the hackers, or baited them into opening e-mails containing the infected attachments, Yoran said. The malicious software, or "bots," enabled the attackers to commandeer users' computers, scrape them for log-in credentials and passwords -- including to online banking and social networking sites -- and then exploit that data to hack into the systems of other users, Yoran said. The number of penetrated systems grew exponentially.

Clearly educating employees is critical to avoid such attacks in the future, but what’s the likelihood of avoiding these kind of disasters? Not good!

Privacy at Home? - School Official Defended in Webcam Spy Case

The Lower Merion School District (in suburban Philadelphia) acknowledged that the District remotely activated webcams inside students’ homes, but the District claimed it was only to find missing, lost or stolen laptops. However a student and his parents filed a federal civil rights suit alleging violation of wiretap laws and violation of privacy. Among other problems created was that allegedly the District thought a piece of candy was a pill and that the student was selling drugs. This reminds me of Big Brother from George Orwell’s 1984. he just missed the year!

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Hard to believe that Facebook turned 6 with another milestone- 400 million friends! According to Facebook 50% logon on any given day and 35 million update their status each day. Since it took Facebook 4 ½ years to reach 100 million friends in August 2008, the current growth rate is pretty incredible. What this portends is hard to image, but growth sure seem likely.  Just look at these statistics from Facebook:

Facebook’s Project Titan – Gmail Killer?

In the meantime reports came out that “Facebook is completely rewriting their messaging product and is preparing to launch a fully featured webmail product in its place… unofficially and perhaps over-enthusiastically, the Gmail killer.” Whether Titan is the Gmail killer is probably beside the point as the critical issue here is that Facebook is expanding into webmail to help its 400 million friends communicate more efficiently.

Gmail Adds New Features

Not so fast for Titan being a Gmail killer as reports also came out that “Google Inc. is taking a swipe at Facebook Inc. and Twitter Inc. with a new feature that makes it easier for users of Gmail to view media and status updates shared online by their friends.” One might wonder if Google was watching Facebook’s Titan and needed to offer new Gmail services to compete. Interesting dynamics for Web 2.0 which this blog will continue to monitor!

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Google added two new links for “My social circle” and “My social content” that permit Social Networking searches! This blending of the most popular search engine in the US with social networking is getting more interesting since “Google is striking real-time deals with both Facebook and MySpace. Updates from public pages on Facebook will appear in Google real-time search, as will any publicly posted comments on MySpace.” In the future hundreds of millions of friends on Facebook and MySpace will use Google to search.

Google “Show Options”

Many people may not have noticed that when you do a Google Search the results displays “Show options” which includes the following:

So whenever you do a Google search you can click on “>Any time, Latest” and you will find information that just happened seconds before. This service now permits real time searching rather than purely historical.

Twitter on Google and Bing

To make things a little more interesting Google just announced that it will add live results from Twitter searches. However Bing already has an early version http://www.bing.com/twitter. With the tremendous growth of Social Networking now blending into search engines seems logical and inevitable. Even though Google gives pointers on how to protect oneself with these new social network searches, Google still keeps searches for 18 months. It makes one wonder how private everyone’s information really is on Social Networks or Google.
 

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In a recent interview Mark Zukerberg “told a live audience …that if he were to create Facebook again today, user information would by default be public, not private as it was for years until the company changed dramatically in December.” Without question Facebook and social networking have changed Internet users’ perceptions of what should be private and not.

Google CEO Schmidt Comments about Privacy
 

The Electronic Frontier Foundation recently reported:
 

When asked during an interview for CNBC's recent "Inside the Mind of Google" special about whether users should be sharing information with Google as if it were a "trusted friend," Schmidt responded, "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place."
 

Schmidt went to say that under the US Patriot Act the US government may obtain information from Google which they routinely retain. Many Google users are unaware that Google retains each and every search for 18 months. So I guess his advice should make people stop and think.

Privacy – What Do Law Students Think?

When I first started teaching the Law of e Commerce at SMU Dedman School of Law in 2000 privacy was a very important and hot topic. A few years ago the CyberProf listserv did an informal survey of those of us who teach the Law of eCommerce and/or the Internet regarding how our students felt about privacy in 2000 and in 2008. Not much of a surprise that law students in 2008 seemed to care a lot less about privacy. My guess is that social networking, Facebook, MySpace, Twitter, texting, et al have been the big drivers of this change in attitude regarding privacy.

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My good friend Kevin Campbell (CIO at Hunt Oil) told me recently that about 5 years ago he removed the TVs from his home with great protest from his kids, but they did keep 2 computers hooked up to the Internet. One evening last fall Kevin’s wife asked him to check on the pending storm on the western horizon Kevin checked on weather.com. Kevin reported back a few minutes later about the latest radar report. In the meantime Kevin’s 20 year daughter reported about strong winds, lightening, and heavy rain which was not part of the weather.com’s website report. When asked where his daughter got her information, of course she just pinged friends on Facebook who lived to the Campbell’s west where the storm was brewing. I guess Kevin’s reliance on going to a website rather than use a Web 2.0 social network source shows a different perspective on getting current information!

2010 Election Year

Adding to the reality of 2010 Web 2.0 politics that 430 Members of Congress are now on YouTube, the Washington Post reported that a Facebook lobbyist is now tutoring Members of Congress:

Inside the headquarters of the National Republican Congressional Committee, 25-year-old Adam Conner -- registered Facebook lobbyist, poster of multiple Obama attaboys and a guy whose Facebook photo is a grizzly bear wielding two chainsaws -- sits down to teach a course. The subject: How to use Facebook better. His student: Rep. Peter Roskam (R-Ill.).

Not much of a surprise given President Obama’s successful campaign and the reality of the down economy means fewer political contributions. So if candidates want to get re-elected (or just elected) they have to use Web 2.0!

Texting is for Real

A former partner recently told me that his daughter sent a text to his wife – “OMG!!!” So his wife called their daughter, and when there was no answer she sent the daughter a text “What’s this about?” The daughter sent a text reply “I’m marrying Jim next summer!” All text, all the time. Web 2.0 will mean be a different year for politics since so many people now rely on texting, Facebook, MySpace, et al. It will be interesting to see how 2010 elections turn out.
 

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In a 5-4 ruling the Ohio Supreme Court now requires a search warrant to search cell phone content which the American Civil Liberties Union of Ohio calls a landmark decision as this appears to be a case of first impression. The defendant’s cell phone was searched without a warrant after he was arrested on drug charges based on a police sting operation. At trial the defendant claimed a violation of the 4th Amendment that although the police had the right to take his cell, the police did not have the right to search the contents of the cell. A decision to appeal to the US Supreme Court is pending.

US Supreme Court Agrees to Consider Text Messages

This week the Supreme Court agreed to consider the privacy claims of police officers text messages in City of Ontario v. Quon. The question before the Supreme Court is whether the city employees are entitled to privacy of the text messages stored at Arch Wireless’ servers since the city provided the text services to the officers as part of their jobs. Each officer received 25,000 characters a month as an allowance and the officers paid for any overages. The city paid no attention to the text messages until it discovered that officer Jeff Quon (who paid for characters above the allowance) had sent sexually explicit messages that were clearly personal and not business related. The question in this case is also a claim of violation of the 4th Amendment.

Web 2.0 Communications

Given what people post on social networking sites like Facebook, MySpace, and LinkedIn it is a wonder that many folks expect much privacy today. Courts will continue to be confronted with perplexing issues regarding the use of the Internet and this will never be less complex, but as I  blogged this week Judges in Florida should not be social network friends with lawyers who appear before them in cases even though lawyers may contribute to their election campaigns. As web 2.0 expands one easily images that the courts will have to reconsider how the 1789 written Constitution applies.

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No surprise that a judicial ethics opinion would restrict Judges from becoming Facebook friends with lawyers who appear before them as it might give the impression of bias, but actually the opinion is broader and extends to any social networking site.

The impact of this Florida Ethics Advisory is difficult to predict, because the Florida Ethics Opinion stated “This opinion should not be interpreted to mean that the inquiring judge is prohibited from identifying any person as a "friend" on a social networking site. Instead, it is limited to the facts presented by the inquiring judge, related to lawyers who may appear before the judge.”

Where Is Social Networking Headed for the Judiciary?

Judges are elected to office in many states and in Texas (my home state) Judges run in partisan elections, however in the larger metropolitan communities few citizens know the Judicial candidates, only the lawyers. So lawyers are the normally the only ones to support political campaign and we even publicly endorse Judicial candidates. Contributing money in support of Judicial candidate sounds more biased that merely being a friend on Facebook.

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In 3 months Facebook grew another 16.7% to 350 friends worldwide which has led Facebook to create a simpler privacy policy to allow users to control who sees “each individual piece of content you create or upload.” All the more amazing since Facebook grew 200% between August 2008 and August 2009. Facebook founder Mark Zuckerberg’s recent blog that stating among other things that 50% of Facebook friends are member of regional networks, and today there are networks for the entire countries of India and China. The new plan is to remove these regional networks and hopefully create a simpler network and improve its privacy policy.

Facebook Statistics Are Amazing

The current Facebook statistics are pretty incredible and particularly that 35 million (10%) of the Facebook friends update their status every day:

• 50% of our active users log on to Facebook in any given day
• More than 35 million users update their status each day
• More than 55 million status updates posted each day
• More than 2.5 billion photos uploaded to the site each month
• More than 3.5 billion pieces of content (web links, news stories, blog posts, notes, photo albums, etc.) shared each week
• More than 3.5 million events created each month
• More than 1.6 million active Pages on Facebook
• More than 700,000 local businesses have active Pages on Facebook
• Pages have created more than 5.3 billion fans

So is it any wonder that Facebook needs to be vigilant in managing personal information of its friends and users. Time will tell how Facebook’s privacy policy works out.

Google Searches for 2009 - Facebook is Number 2!

As 2009 ends Computerworld announced the top search engine hits for the year and of course Michael Jackson was number one, but Google’s number two search of the year was Facebook! Also on Google’s top 10 list of searches was “Twitter, Windows 7 and Tuenti, which is a Madrid-based, invitation only social networking site that some call the Spanish Facebook.” AOL and Yahoo! also listed Michael Jackson as the top searched name, but from the lists varied widely- “AOL and Yahoo! lists popular search terms like '70s icon Farrah Fawcett, who also died this year, socialite Kim Kardashian, singer Rihanna and actress Megan Fox.” Interesting message about the search engine wars that Google, AOL, and Yahoo! would be so different.

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On the same day Facebook reported that it finally became cash flow positive after 5 ½ years, Facebook also announced that it grew to 300 million users. Of course that’s all relative since in August 2008 Facebook reported that it had 100 million users, but also an almost unbelievable growth of 200% in one year! Facebook Chief Executive Mark Zuckerberg said in a blog post that the goal of being free cash flow positive in its most recently ended quarter ahead of its 2010 target.

How Much is Facebook Worth?

A few months ago Digital Sky Technology’s $200 million investment meant that the estimated value of Facebook was about $6.5 billion. It seems likely that the private investors stand to profit nicely from Facebook’s tremendous success as Web 2.0 continues to grow wildly!

200% Grown in 1 Year, What Will Happen in the Next 12 Months?

What an unbelievable time in which we live to witness the past two years of Web 2.0 social networking. As I like to say the “Internet is the greatest social change that has ever happened in the history of humans….there are no boundaries of time and geography!” However since we are in the middle of this great social upheaval it is all the more difficult to see exactly where we are headed. Surely if Google, AOL, Yahoo!, or Microsoft had foreseen Facebook’s wild success , wouldn’t at least one of more of these giants created their own version of Facebook? What do you think?

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Social networking remains headline news as Facebook got a $200 million infusion from a Russian based company while at the same time Iran changed its blocking policy and unblocked Facebook in the midst of a heated June 12th election. Both of these reports demonstrate important messages about social networking in spite of the fact that Facebook, Myspace, and YouTube are not generating the revenue expected given their size and evolution. But at the same time reports of phishers harvesting Facebook passwords for profit should be a sobering reminder that social network users are very vulnerable since they trust their friends, who may be taking personal identities and passwords.

$200 Million = 1.96% Equity

When you do the math and see that Digital Sky Technologies (DST) paid $200 million for 1.96% of equity of Facebook that translates to a $10 billion valuation, which is a third less than Microsoft’s October 2007 $240 million invest for 1.6%. These numbers can make anyone dizzy, notwithstanding that Facebook doubled in size between August 2008 and April 2009 to 200 million friends. Since Facebook reports that more than 70% of its users are outside the US it makes lots of sense for DST as it invests mostly in Internet companies in Russia and Eastern Europe.

A World Message

DST’s Eastern Europe reach reinforces social networking’s power, but Iran’s concern about Facebook influencing an election is an even bigger message. Since the Facebook ban in Iran lasted only a few days the social pressure forced the change. Surely Iran will not be the only country to limit access to social networks which was worried that anti-government groups could band together on Facebook to impact the June 12th election.

You would have to live on Mars to not be aware that President Obama maximized the use of social networks to raise funds, support, and ultimately election. No wonder the White House has a YouTube page. We should all keep an eye on political uses of social networks as we watch the evolution of the Internet.
 

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Ted Ullyot, Facebook’s General Counsel, reported the governance vote results that 74.37% of the 665,654 cast ballots in support of the new Statement of Rights and Responsibilities and Principles (Statement). The new Statement was adopted with less far than 1% even of Facebook friends casting ballots. It’s refreshing that there was a democratic vote on the largest social network in the world, but amazing that so few voted.

Statement Requires 30% to Vote

Well that was the plan, but with such a small turn out Facebook decided that the 30% cannot even be the threshold. Facebook will go back to the drawing board to determine what percentage should be the minimum, and it will be a low percentage.

Democracy Web 2.0 Style

The reason for the governance vote to begin with was that Facebook was changing policies only to get Facebook friends vocal pushback. Facebook provided democracy by allowing the New Statement to be vetted in virtual town hall forums and a vote of the friends. As the Internet evolves in the future perhaps we can look back at this governance vote as a sea change that social network users should have a say in the governance. However, since so few individuals ever read terms of service or privacy policies this may also be the only vote ever conducted on social networking governance.

What do you think?
 

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From April 16 through 23, 2009 the 200 million Facebook users have a chance to vote on their own governance, but the new governance will only be adopted if 30% of the Facebooks friends vote. This vote follows a virtual town hall meeting that allowed comments on the proposed governance terms. It seems to make sense that the users should have some control over their own social networking activities.

Friends Complain

Hundreds of thousands Facebook friends sent emails complaining about a new privacy policy in September 2006, and as a result Facebook decided not to adopt the new privacy policy. Earlier this year Facebook decided to retain all items posted forever, and another ground swell of opposition stopped these changes. These messages indicate a sense of ownership that Facebook users have about Facebook, which led Facebook to promise to be more transparent, and as a result the right to vote on governance.

All Facebook Users Should Review the Proposed Governance

Since few individuals ever bother to read terms of use, privacy policies, or click agreements, this is a novel opportunity for Web 2.0 to encourage the users to establish policies. This may have an impact on future policies for the Internet, so stay tuned for the election results.
 

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After teaching the Law of eCommerce since 2000 I have established my own perspective of 5 Big Bangs which propelled the Internet, three of which were described in a recent blog:

1st Big Bang- Invention of the punch card for the 1890 census by Dr. Herman Holerith (which led to the IBM);

2nd Big Bang- World War II invention of the first modern day computer for monitoring the tides to help with the June 6, 1944 D-Day invasion of Normandy;

3rd Big Bang- Launch of the IBM Personal Computer in August 1981;

4th Big Bang- Distribution of Microsoft’s Internet Explorer in July 1995 with Windows 95; and,

5th Big Bang- Web 2.0 with the advent of social networking as predicted by Tim O’Reilly in 2002.

Where is the Internet Going?

It’s very difficult to tell, but when Alexander Graham Bell invented the telephone in 1876, no one could have predicted that I would use my cell phone to make a phone call atop the Great Wall of China in 2005. So where the Internet is going is not easy to predict, but as we observe changes it’s clear that the direction is not entirely what we may expect. In 1998 when Google launched no one could have predicted its success and that would account for more than 63% of all Internet searches, have vast wealth, and that Google would provide an Operating System among many accomplishments.

Web 2.0: FaceBook at its 200 Million User, Doubles Membership in 8 Months!

Big celebrations in August 2008 FaceBook when it registered its 100 million user, now about 8 months later about to register its 200 million user. Web 2.0 (my 5th Big Bang of the Internet) must be for real, but why has FaceBook been so successful? It must be fulfilling a social need. Without question when FaceBook when started in February 2004 it was aimed at college students, but today the fastest growing segment of its membership is the 35 year and older category. As social networking evolves other Internet activities might replace FaceBook, but for the time being the growth is mind-boggling. Please stay tuned for the 6th Big Bang!
 

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A report that Roman Catholic bishops in Italy are urging Italian Catholics to give up texting for lent sends a very interesting message. This suggestion is more than a no-meat Fridays, to stop communicating with texts for 5 weeks. However there’s more at play than it seems. Most Millennials communicate by text rather than phone or email, so one might wonder if this message was directed at trying to get Millennials more involved with their religion.

Political & Social Issue

All cell phone and many other chips rely on Coltan, short for columbite tantalite, and 80% comes from the Democratic Republic of Congo. So the political side of the no texting for lent is to highlight the years of conflict in the Congo where apparently farmers and children have been enslaved to dig for Coltan and the monies have been used against the citizens.  As well many of the wildlife preserves are being destroyed. There is even a “No blood on my cell phone” campaign as part of a requested embargo against the use of Coltan.

Web 2.0 Issue

Without question the Web 2.0 world has changed the way in which we communicate, and hundreds of millions of individuals regularly spend time texting, sending emails, and posting information on FaceBook, MySpace, LinkedIn, and/or Twitter. So giving up texting for lent does not seem like a very pragmatic proposal since such a proposal is not much different than giving up talking to for lent. Actually FaceBook just announced that it was expanding the amount of information about each friend and instead of a 5,000 friend limit, there will be no limit. So clearly Web 2.0 will only expand and giving up any Web 2.0 for lent seems impractical.
 

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When DARPA started in 1962 as part of the US’s reaction to Russia launch of Sputnik in 1957 no one could have foreseen its evolution to 2009 with FaceBook, YouTube, and Google. A recent article questions whether we need a new Internet since the current hodgepodge is not designed for the future. Clearly there are people working on re-tooling the Internet, but how it will continue to evolve is interesting but unclear. The UK and US are busy trying to provide high speed Internet access to the every home, but the Spectrum changes for TV for HD broadcast will free up the old Spectrum and will provide new cell and Internet services unknown before.

4G is Coming

AT&T announced its plan to roll out 4G by 2011 which would replace the spotty 3G network now in use. AT&T, Verizon, and the other providers will use the Long-Term Evolution (LTE) wireless broadband which is supposed to handle downloads at 100 Mbps and uploads of 50 Mbps for every 20 MHz of spectrum…which will clearly change the way we operate today.

Do We Need a New Internet?

With the new high speed access in cell phones and at our desktops this should be a clue that it’s time to rethink the entire Internet structure. Maybe the UK and US plan for broadband access to every home will be revised based on 4G, and surely there will be an evolution in desktop computing. Not just that Microsoft and Open Source developers will offer new operating systems or browsers, but rather a major transformation about how technology is used. When in graduate school in 1972 I took a course on the computer as a public utility which was an interesting idea at the time…however it does not look like that ever happened. However the juxtaposition of 4G with the Internet may require a whole new approach to what how we operate. This should be an interesting evolution for the Internet…not Web 2.0 or Web 3.0, rather maybe Internet 2.0.

I welcome comments on this Blog.
 

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Notwithstanding all the .com failures over the past 15 years it’s unusual to see an Internet phenom change the waterfront so much as twitter. If you were otherwise not aware, twitter with a member base of about 4 million is a micro-blogging service which limits its messages to 140 characters and it just announced that it raised $35 million in third round of funding. However twitter has never had a marketing plan, and as a matter of fact twitter just hired its first director of business development. There was a lot of media attention on twitter when President Obama planned to use twitter to announce his running mate in 2008.

Is twitter on its way to being an Internet giant?
 

A recent article speculated that twitter is replacing Second Life as a business tool because of twitter’s ease of use on cell phones, takes little time to set up, and requires no software. On the other hand Second Life and other virtual worlds, require substantial time and resources to set up. Not to mention that one cannot conduct business in Second Life on your cell. Many B2B marketers are using twitter including BearingPoint, British Air, and McKinsey & Co. Dell Outlet sold hundreds of refurbished computers in a couple of hours by merely sending tweets (a twitter message).
 

Security Concerns for Social Networks
 

At a recent security conference researchers reported that apparently, without much surprise, individuals who use social networks are naïve and as a result have absolute trust in communications they receive from friends in twitter, FaceBook, MySpace, and LinkedIn. As we are all aware, with the growth of Web 2.0, millions of individuals around the world are spending vast amounts of time and energy with to these social networks. However, these security researchers demonstrated how imposters using these various Web 2.0 networks can steal identities and personal information with great ease. Given these warning of security issues we need to stay tuned for the continued evolution of twitter and the other social networks.
 

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The UK’s plan to bring broadband Internet service to every home by 2012 is a very bold plan since based on recent reports only about 68% of the UK population are currently Internet users. In the meantime about 72% of the population of the US are Internet users. However these are not exactly apples to apples comparisons since these statistics do not tell what percentages of homes have broadband, rather these statistics shed light on the number of users. In the US cable television is a major provider of Internet access, and there are still dial-up users who are primarily outside of the heavily populated regions in rural America.

What about Rural America?

The FCC (Federal Communications Commission) and USDA (US Department of Agriculture) are working on a joint initiative to bring high speed Internet access to the rural US over broadband over power lines (BPL), satellite, wireless, and other means. However for the most part this effort not speeding along. Specifically this Blog is being written on a computer in the rural Texas (Milam County, Texas) which has dial-up only, not WIFI, or any other broadband Internet option available. This is reality for rural America where citizens still have white and yellow pages, which is something my home in Dallas has not had for many years.

Internet in More Homes

As we look to the future of the Internet more high speed Internet access is a necessity given the proliferation of eCommerce, and expansion of Web 2.0 into Web 3.0. Of course there’s also the age divide which is changing the use of eCommerce, now that FaceBook has more than 150 Million users, the demographics have changed so that a larger and larger percentage of users are 35 or older. It seems pretty clear that as our younger generations rely on the social networking and texting, everyone has to get with it, even in rural America. Not a surprise that on January 21, 2009 (day after the Inauguration) President Obama launched his YouTube site, but equally as interesting was the following week that the Pope launched his YouTube site. Clearly both the President and Pope know that the primary way to communicate is through the Internet. The UK is on the right path, and hopefully the US will not be far behind in having high speed Internet in every home by 2012.

What priorities should America have to bring high speed Internet access to rural citizens? To every home?
 

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An estimated 140 million folks use Facebook worldwide, but this is the first story about legal notice of a lawsuit through a social network. The law has never been fast to move, and there’s no reason to believe that any other country will adopt Facebook as a means of legal service, but this is an interesting story. Since the plaintiff had no success with direct service at the home of defendants, or by defendants’ email, apparently there was a match from the mortgage application with both defendants homeowners to their Facebook pages. The judge ordered that the notice be a private message and after posting this message the defendants have 7 days to respond.

Legal Service and Default

Most people are familiar with personal service where a party actually receives a written notice, and that’s easy to follow. Depending on state and federal laws in the US, service may be accomplished by leaving written notice on some one’s door, publishing a newspaper notice, or sending a certified letter with return receipt. So if the defendants do not respond after proper legal notice, courts will issues default orders against them for failing to participate in the lawsuit. That means the defendant loses by failure to respond. Of course most defaults orders can be set aside if the defendant can show that they were not properly served and given notice of the lawsuit.

Social Network Service?

Since so many people regularly visit Facebook and other social networks this service of legal process may be the beginning of a new phase of the law adapting to use of the Internet. Given all the trends, it seems likely that more and more individuals will participate in social networks. As well, the age of social network visitors has changed from being primarily for college age to middle age, so a broader spectrum of the population is using social networks. One can wonder if we will see service of legal process to avatars in virtual worlds such as Second Life. As the Internet evolves clearly legal process will have to keep up, and where else can we be found except sitting at our computers/laptops/PDAs attached to the Internet?
 

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Facebook claims to have more than 120 million active members and it is the 4th most trafficked site in the world. Of course there are many other popular social network sites including LinkedIn and MySpace to name a few, and only to make things more interesting a recent report indicates that more than half of MySpace visitors are 35 or older. Not much of a surprise that more mature individuals are getting into social networking as the Internet evolves.

What about the Content?

The terms of use vary between Facebook and other social network sites, but one common provision in the terms of use is that the users grant these sites a worldwide license to the user content that is irrevocable, perpetual, non-exclusive, transferrable, royalty free to use, copy, or just anything they want. Facebook also limits its liability to the amount of monies paid (if any) or $1000. Even users of Google Apps grant Google a license to their content.

Web Universal ID?

Facebook recently announced Facebook Connect which is an Universal ID that will allow its users to only logon once and then navigate to third party sites. Not much of a surprise that Google, Yahoo!, and MySpace are also developing similar technology. However, it seems that either few individuals don’t care or understand that they are providing Facebook, MySpace, Google, and the all the rest with licenses to their personal content. Regardless of what users understand the growth of the social networking websites will be based on increased data from their users’ content which will generate more online advertising revenues.
 

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