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Facebook is the clearcut leader in social. We all know this. No one else is even close (except maybe Google). There are all sorts of reasons why they are succeeding — namely due to the billion people using the site.

However, like all industry leaders, Facebook is under attack from all sides. As the well-established elephant in the room, they’ve lost their “cool” factor. And the cool factor for any “social” venue or activity is finite. Bars and clubs both are more often than not shut down and re-branded every five years. Particularly as a service that revolves around “social,” Facebook’s window of being “cool” is limited — and, I’d argue, has already passed.

Facebook’s struggles with monetization are well documented. In eight years, I can truthfully say I’ve never clicked on an ad while browsing the site — mostly because I’m not in a transactional mindset while on Facebook (Facebook is what I do to waste time). Their new mobile ads are irrelevant, and detract from my already sub-par experience. (Why they haven’t launched a payments platform to compete with PayPal is beyond me, but that’s another topic by itself).

Once communities get too big, they lose their intimacy — and get flooded by marketers. Both of those have happened with Facebook. I truthfully don’t know exactly how many people I can maintain true relationships with, but it’s probably right around the 150 mark research has shown to be true. Facebook, for myself and most others, is well beyond that. It shows me a lot of information, about a ton of people — but very little real substance occurs there anymore. The people that matter, have been lost in the noise.

All that said, here’s why I think Facebook is on the downward slope: Privacy. Privacy and data usage is clearly the elephant in the anti-Facebook room.

We’ve been in private beta with my startup, Oh Hey World, for the past month or so. We figured a Facebook login would be easier than having people create yet another account to keep track of, and part of our service is showing you people you know living nearby — so Facebook was the login system of choice (with no option to sign in without it). However, we’ve been getting feedback like this on an increasingly frequent basis:

I have privacy issues with Facebook and don’t want to login — but I don’t think I’m the normal use case.

Yet, when person after person repeatedly says the exact same thing, that is indeed the normal use case. I haven’t kept exact stats, but I’d venture a guess that 40 percent of people say they are extremely uncomfortable using Facebook to login and refuse to login to our beta site as a result. The other 60 percent all bring up privacy concerns, but are OK with the trade-off. Here are a few quotes from a Facebook post asking whether people would login with Facebook or free-form if given the choice:

“fill out form, fb makes me worry about security too much”

“Never Facebook. Using FB as a login has only downside and no benefit. You open your personal data to companies you don’t know well, you expose yourself to the risk of spamming your friends, you give more info to FB that they’ll use to throw ads at you. What do you gain? half a second?”

“Never FB. I post enough of my own useless crap. I don’t need outside companies posting useless crap too or accessing any of my FB info.”

Trust is the lifeblood of the web. And people don’t trust Facebook.

That’s a SIGNIFICANT problem if your entire business revolves around billions of people trusting you with their personal data.

What’s needed for a competitor to beat Facebook?

  • A decentralized location to store profile data, social connections, and photos (think WordPress.org). Users need to know their information is going into a spot that will be around in 5, 10, 20 years.
  • User data is not sold
  • Partner with leading sites in 5 industries to adopt the login system alongside Facebook and market the value proposition, nd eventually have the partner sites shut off FB login entirely.
  • A significant community building effort to convince the top 10 percent of content creators to switch platforms. If interesting content stops showing up on Facebook, people will go seek out information from their trusted sources wherever they publish it.
  • No advertising would be ideal. Charge the users $.50 per month, or make enough money from donations (Wikipedia) and/or developer fees.

Of course, the most important component of the equation is the right entrepreneur, with strong connections at a wide range of companies, to lead the charge and devote a few years of his or her life to it. Something tells me WordPress creator Matt Mullenweg would be in a prime position to pull this off. There also happens to be an initiative out there that fits this bill — Being Collective — started by Scott McLeod as a side project (who I met at Startup Abroad in Bali a few months ago).

Drew Meyers

With a billion people on their platform, I know I’m in the minority. But Facebook is in a vulnerable position. The tides are against them.

Facebook has lost the trust of its users. I believe, without trust, a web site is doomed. And lastly, I firmly, firmly believe the future of the web lies in niche communities.

All this leads me to believe someone is going to make a serious run at Facebook in the next 18 to 24 months. Whether that be App.net, Path, Google, or someone else — who knows.

You with me? Or you think I’m crazy?

Drew Meyers is founder of Oh Hey World. Global nomad originating in Seattle. ex-Zillow community builder & biz dev. Entrepreneur. Microfinance advocate. Travel addict. Fan of Red Hot Chili Peppers and Kiva.

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