Facebook becomes a utility - or has it jumped the shark?

An interesting and flattering portrait of Facebook and its founder Mark Zuckerberg appeared in Fortune, and aside from glossing over the current privacy and valuation concerns, glossing over less than expected revenues and the not unexpected lack of profitability, it does provide a window into the rapidly growing company's current status. Where it seems to be: consolidating its vision, its platform - even its real estate in Palo Alto.

There's no question that it's Facebook's moment - the story opens with a reluctant baby boomer being forced to join by a friend's assumption of its ubiquity in posting his photos, etc. But what's not as clear is why the dismissal of Myspace as having "jumped the shark" will not also be applied to Facebook down the road.

Consider this scenario. Facebook Connect, openSocial, or other open and portable data arrangements began to allow users to actually port their social info - their list of friends for example. Third party functionality becomes available to easily and painlessly reproduce your photo albums and other personal content, ostensibly in the name of backup or management tools, and cross platform widgets maintain your personalization across multiple sites.

Then, in a Beacon-like crisis of monetization, Facebook's recent privacy policy deterioration (they own your info for life now!) coupled with heavy handed commercialism (advertisers and marketers customizing messages to your status updates) piss off one too many people. Perhaps Facebook Connect allows someone unscrupulous to do something illegal like answer the security questions for a bunch of 401(k)s and empty the accounts; perhaps something merely vulgar. (A marketing message like: "Your friend feed says you just got dumped... Wanna buy some Ben and Jerry's?) Suddenly, a large group of users begins to use the open standards and tools to simply replicate their online profiles and lives in an alternate network - perhaps led by tweens to a mobile social network or Twitter and Youtube to status updates coupled with UGC... Much as Myspace became painted fairly or unfairly as a prowling place for sexual predators, Facebook could suffer a similar seismic shift in perception.

The threat could come from any direction - many of these possibilities are all to real - and Facebook is only one of many trying to capture the energy of social networking. Much like Friendster and Myspace before it, and countless others whose names are not even remembered, it's tough to catch the lightning in a bottle, but even tougher to keep it.

So what can Facebook do to keep the people it has fought so hard to attract? Well, the rude awakening to find coworkers and parents with access to your personal info formerly accessible only to your peer group could be mitigated by allowing for the much talked about 'persona management' of profile information: perhaps restricting different views to different classes of 'friends'. For example, someone in the work category could never see anything not categorized under work. Easier management tools and default settings that protect privacy more effectively would help promote this. At the very least, they will help avoid "Michael Phelps" moments of explaining certain behaviors to Grandma.

Perhaps most important, however, is that having built a platform and ecosystem around it, it's now up to Facebook to manage it. For it is most likely that this is where the crippling blow would come from: from those closest to Facebook. The marketers partnering with Facebook for monetization; the widget developers extending its platform; the Connect adopters supporting its single sign on and social graph. Managing the privacy standards, security risks, and threats from its very openness may be the challenge that Facebook needs to address most.