Facebook Should Get Ahead of the Privacy Police and Pay Users To Share

Last Updated Apr 28, 2010 3:44 PM EDT

Last week I asked if Facebook would face-off with Congress over privacy. The pixels barely had a chance to burn into the monitor before four U.S. senators wrote an open letter, asking Facebook to change its privacy policy and how it shares user data with business partners. The company claims surprise at the comments and talks about "sitting down" with Senator Charles Schumer and, presumably, the other senators. But the time for a nice chat is long past.

Facebook has been mired in privacy issues for years. CEO Mark Zuckerberg had better get past what he wants and start looking at what his company needs -- user data -- and figure out how to get it by giving something back to his customers. But he needs to do it soon, as the time to act and retain some control of the situation is quickly passing.

Facebook should have been anything but surprised at the contents of the senator's letter. Let's take a quick stroll down memory lane and remember how the company handled previous privacy storms

At least once a year, Facebook tries to expand its use of customer data to make money -- although all in the name of user convenience and experience. Each time, Facebook had to run off and fix things after the fact.

I understand that Zuckerman wants to cement Facebook into the firmament of the web and increase the company's revenue. But revenue plans are no good if they antagonize lots of customers and, now, government watchdogs. Should the company continue down this road, expect further action by Congress, which is reacting not only to Facebook, but a broader wave of concern about online privacy. Although company management may think it can push the envelope, political reaction will impact not just Facebook, but an entire industry.

Here's an idea: let users opt-in to the program instead of making them opt-out, with Facebook offering a benefit for cooperation. The company could negotiate discounts with vendors or even temporarily underwrite discounts with slightly lower advertising prices to give people a reason to turn over their information. Those consumers who want to stay private will still be part of the ad audience and not grow resentful enough to seek another social network.

Although I rarely advocate bribing users, in this case Facebook is asking customers for an additional form of payment. Some quid pro quo would be wise. Unfortunately, that means Zuckerman must give up getting his own way in deference to a bigger picture. So far, his track record isn't encouraging.

Image: Flickr user bunky's pickle, CC 2.0.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.