Is Facebook creating its own demise by building a moat around the castle?

Never has a internet company had so much information about its users. Facebook knows your friends. They know where you go in real life and online. They know who you hang out with, who you talk to, what interests you, and they have a database of pictures of you that the FBI would die to get a hold of (and probably have already). Companies are built around the data that Facebook shares about you, but that is changing. Facebook is building a moat around their data and only lowering the drawbridge to those who are not a threat and who contribute to the “Facebook cause” by giving back some love through sharing.

They’ve reached a tipping point that makes them all but invincible, but their strength in data and the desire to protect it may end up being their downfall.

Yesterday’s blocking of Twitter’s Vine and the previous day’s blocking of Yandex show a dangerous trend. It isn’t just that they were blocked. It’s that they were blocked almost instantly. They are acting as judge, jury, and executioner for those who want to use their data and that’s absolutely within their right, but the swift hand of justice that seems to be guiding them displays an extremely paranoid wave of “ready, fire, aim” that could be painting the company into a corner regardless of how big they are.

As Josh Constine from Techcrunch points out:

Facebook is playing with fire. It could use policy enforcement to cook competitors and shine a light on its dominance of social networking. But if this enforcement scares off developers whose apps might otherwise provide content that could be shown next to ads in the news feed and piped into Graph Search, Facebook could get burned badly.

Building on Facebook is becoming dangerous. Developers will not be willing to take the risk of doing anything innovative that takes time to put together with such a risk that their efforts will be summarily dismissed and flushed down the drain by a jealous and merciless emperor. If Facebook continues to send the message of “don’t try to build around or on our platform if your efforts are designed to benefit you or our competitors,” then their free-flowing fire hose of willing developers will soon fall to a drip.

They are not self-sufficient. Not even close. They are much more delicate as a company and in more of a precarious position than they seem to realize. Size is great if you can keep people interested, but they seem to overestimate the interest level and underestimate the capacity of the user base to make a sharp turn away if they do something stupid. Their history is dotted with many stupid decisions, particularly in the realm of privacy, and while it hasn’t cost them the farm yet, it definitely could in the future. Governments of the world see a huge target on their back, particularly with an economy that isn’t doing so well. France, the United States, and other countries see Facebook as having a little too much while giving too little in return whether they say it publicly or not and a hostile politician could cause major problems.

Facebook is still on top today. There’s no reason to think that their status will change in the future without something major happening. What they don’t seem to realize is that they are still vulnerable in the court of public opinion and the courts of law around the lands. The greatest defense in such situations is to give, to be the hub through which others are able to build something special. A giving company of Facebook’s size that embraces innovation and enables others to succeed on their platform will have a much better foundation through which to build a defense. Instead, Facebook seems to be content building their moat. They may soon find that the castle starts emptying out or the walls come under siege as a result.

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“Castle Moat” image courtesy of Shutterstock.