Facebook's Zuckerberg gives IPO advice, reluctantly, to Twitter

How should Twitter handle an initial public offering? Mark Zuckerberg admits he’s probably not the best person to ask.

The Facebook CEO was asked at the TechCrunch Disrupt conference in San Francisco Wednesday for some advice on how Twitter could ensure a smooth IPO.

But Facebook’s own IPO was beset with technical glitches and claims of insider trading. “I was worried people would leave the company,” Zuckerberg said of the period after Facebook went public.

But, after leading Facebook through a turbulent first year as a public company, Zuckerberg said that the IPO process itself “is actually not that bad.”

Zuckerberg was interviewed on stage by TechCrunch founder Michael Arrington.

For a smooth IPO, Zuckerberg said, “You have to know everything about your company. You’ve got to stay focused on doing the right stuff.”

Zuckerberg cited Facebook’s strong growth in mobile as an example of the importance of identifying the right areas of focus for a company.

Last year, Facebook basically had no revenue in mobile, and “people thought it was a disastrous thing,” Zuckerberg said. But during Facebook’s most recent earnings call this past July, the company reported that 41 percent of its total advertising revenue was derived from mobile.

An IPO for Twitter will go over fine as long as the social network “focuses on what they’re doing,” Zuckerberg said.

Twitter is trying to refine its focus around real-time conversations. The company recently tweaked its site and mobile apps to make it easier for people to carry out conversations on Twitter and post them outside the social network too.

Twitter has launched new advertising products too in an effort to raise revenues with a possible IPO looming. Earlier this week Twitter announced that it had bought MoPub, a mobile-focused ad exchange. MoPub’s technology could help Twitter serve ads to more consumers outside of Twitter.com and the site’s mobile apps.

Twitter has a little more than 200 million active users; Facebook has more than 1 billion.

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Privacy groups ask FTC to oppose Facebook's policy changes

Six privacy groups have asked the U.S. Federal Trade Commission to strike down proposed changes to Facebook's policies, as they violate a 2011 settlement with the agency over user privacy.

"The changes will allow Facebook to routinely use the images and names of Facebook users for commercial advertising without consent," the groups wrote in a letter Wednesday to the FTC. The groups asked the commission to enforce its 2011 order.

Facebook announced in August proposed updates to its Data Use Policy and Statement of Rights and Responsibilities, two key documents that explain how the social network collects and uses people's data.

In the revised Statement, Facebook states that by joining the site, users "permit a business or other entity to pay us to display your name and/or profile picture with your content or information, without any compensation to you." In the original Statement, people can use their privacy settings "to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us," the groups said.

The changes proposed by Facebook follow the approval by the U.S. District Court for the Northern District of California, San Francisco division of a US$20 million fund for Facebook to settle a class-action lawsuit against the site's "sponsored stories" advertising program. The complainants, some acting on behalf of minors, had alleged that their names and likeness had been used without their prior consent in "sponsored stories" advertisements shown to their online friends on the social networking website.(

"The pending changes arise from a class action settlement in which the attorneys who purported to represent the interests of Facebook users granted the company a right that was contrary to the company's policy at the time the litigation was initiated," wrote the groups, which include the Electronic Privacy Information Center, Center for Digital Democracy, Consumer Watchdog, Patient Privacy Rights, U.S. PIRG, and the Privacy Rights Clearinghouse.

As a result, Facebook users who "reasonably believed" that their images and content would not be used for commercial purposes without their consent could find their pictures showing up on the pages of their friends, endorsing the products of Facebook's advertisers, the groups wrote. "Remarkably, their images could even be used by Facebook to endorse products that the user does not like or even use," they added.

The groups also object to what they consider a "deemed consent" that Facebook requires from minors. Under the proposed changes, minors have only to represent that at least one of their parents or legal guardians has also agreed to the terms of the section, and the use of their name, profile picture, content, and information, on their behalf. Such deemed consent "eviscerates any meaningful limits over the commercial exploitation of the images and names of young Facebook users," the groups wrote.

Facebook said the proposed update did not change its ad practices or policies, but only made things clearer to people who use the service. "As part of this proposed update, we revised our explanation of how things like your name, profile picture and content may be used in connection with ads or commercial content to make it clear that you are granting Facebook permission for this use when you use our services," wrote a Facebook spokeswoman in an email.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service.
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Facebook's disclosures remind us not to count on privacy

In releasing its first report on government requests for user information, Facebook is reminding businesses and consumers that use of the Internet today requires self-censorship.

The report released last week shows also that the U.S. government—which is the single biggest requester with between 11,000 and 12,000 requests—is only one of many seeking data from Facebook. Total non-U.S. requests numbered about 15,000 during the first half of this year.

Facebook's Global Government Requests Report is meant to assure users that the company is doing everything it can legally to protect their privacy. Google does the same through its biannual Transparency Report.

The number of users specified in the requests was from 20,000 to 21,000. The majority of the requests were related to criminal cases, such as robberies or kidnappings.

Facebook handed over at least some data in 79 percent of the requests, showing that Facebook refused to release data when it could.

"We scrutinize each request for legal sufficiency under our terms and the strict letter of the law, and require a detailed description of the legal and factual bases for each request," said Colin Stretch, Facebook's general counsel. "We fight many of these requests, pushing back when we find legal deficiencies and narrowing the scope of overly broad or vague requests."

Nevertheless, neither Facebook nor any other company can refuse a legitimate government request, so it is up to users to think before posting and to avoid becoming friends with anyone who seems shady.

Brian Blau, an analyst with Gartner, said people should also follow their employer's policies for using social networks, so they don't say anything that can taint the company's brand.

However, government monitoring should not stop organizations from using Facebook for marketing, sales leads and customer support, said Alan Lepofsky, analyst for Constellation Research. "Engaging with prospects and fans would rarely involve confidential information that anyone should be worried about the government having access to," Lepofsky said.

Once the conversation with a potential or current customer becomes more detailed, the interaction should be taken off Facebook, he said. At that point, all information should be stored internally in a customer relationship management system or a tracking tool for customer support.

Experts applauded Facebook's decision to release the report in order to give users a realistic view on online privacy. However, Rick Holland, analyst for Forrester Research, said Facebook was being selective about its transparency.

Rather than just disclose government requests for data, Holland would like to see Facebook provide a lot more details on how and what it shares with advertisers, including information on customers and prospects gathered from the pages of businesses.

"I don't know if there's any risks to companies that way, but behind the scenes, I'd love to see the same level of transparency on how they're making money on [the data]," Holland said.

Tech companies, including Facebook, Google and Microsoft, are pressing the U.S. government for more flexibility in categorizing information requests, particularly in light of recent revelations of massive data collection on Internet activity by the U.S. National Security Agency.

Companies are prohibited from providing anything more than a range of the number of NSA requests and of affected user accounts.

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Facebook's new face recognition policy astonishes German privacy regulator

A German privacy regulator is astonished that Facebook has added facial recognition to a proposed new privacy policy it published on Thursday.

"It is astonishing to find the facial recognition again in the new proposed privacy policy that Facebook published yesterday. We therefore have directly tried to contact officials from Facebook to find out if there is really a change in their data protection policy or if it is just a mistake of translation," Hamburg Commissioner for Data Protection and Freedom of Information Johannes Caspar said in an email on Friday.

The Hamburg data protection commissioner, already at odds with Facebook over its use of face recognition technology, reopened its proceedings against the company in August last year, telling the company to either obtain explicit consent for face recognition from users, delete the data, or face a lawsuit, Caspar said at the time.

Facebook turned off facial recognition for all European users in September last year, and said it would delete all face recognition templates for existing users in Europe.

The German commissioner stopped its proceedings against Facebook in February, when it confirmed that the company had deleted the facial recognition data gathered on German users without their consent.

Facebook founder Mark Zuckerberg.

Turning on facial recognition again in Germany might be illegal, Caspar said, adding that it depends on how Facebook implements it. The social network should ask for the explicit and informed consent of the user, Caspar said.

"That means that there has to be offered an opt in for users," he added.

Facebook initially deleted the face recognition data in response to recommendations from the Irish Data Protection Commissioner that it adjust its privacy policy. The company's Irish subsidiary is responsible for the data of users outside the U.S. and Canada, and therefore falls under the jurisdiction of the Irish DPC, which also confirmed independently that Facebook had deleted the face recognition data .

On Thursday, Facebook proposed changes to its privacy policy on Thursday, including one related to the tag suggest feature that uses facial recognition in order to let users easily tag friends in photos they upload.

Tag suggest is used in the U.S. in the same way it was used in Europe before it was turned off. Facial recognition software is used to calculate a unique template of a user's appearance based on facial features using variables such as the distance between the eyes, nose and ears.

"We are able to suggest that your friend tag you in a picture by scanning and comparing your friend's pictures to information we've put together from your profile pictures and the other photos in which you've been tagged. You can control whether we suggest that another user tag you in a photo using the 'Timeline and Tagging' settings," the proposed change reads.

Facebook proposed the change in its U.S. privacy policy, and also in translated versions of the policy for European countries, including Germany.

However, according to the Irish DPC, Facebook does not yet intend to offer the service in Europe.

Facebook Ireland consulted the Irish DPC in relation to its proposed privacy policy changes and confirmed that this feature is not yet available in Europe, said Ciara O'Sullivan of the Office of the Data Protection Commissioner in an email. "Any proposed changes to this position would be discussed with our Office," she said.

The Irish DPC suggested to Facebook Ireland that it clarify to its users that the tag suggest feature is not currently available in Europe, she added.

Facebook is still working with regulators to find a way to turn face recognition back on in Europe, a Facebook Germany spokeswoman said in an email.

Loek Essers focuses on online privacy, intellectual property, open-source and online payment issues.
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Facebook’s data policy changes put your face front and center

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Facebook's communal photo albums make it easier to share snapshots—or ignore them

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