Does Facebook Have a Trust Problem?

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People purport not to trust the site, but they continue to use it. Is a lack of trust holding Facebook back?

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CNBC

From pretty early on in its short history, Facebook has had issues with privacy. And though the company has made privacy controls a more central part of its offerings in the intervening years, a new poll out today -- just days before the company's IPO -- shows that nearly 60 percent of people surveyed say they have little or no trust in Facebook.

What are the effects of this distrust? Does it undermine the company's capacity to monetize its massive user base? On the surface at least, it seems that people are willing to use Facebook regardless -- it's nearing on a billion users, after all. Perhaps people have just made their peace with Facebook, and decided that despite whatever hang-ups they have about the company, it's worth it to them to be on the site anyway.

But the real effect of the trust gap will be seen less in the number of people on Facebook than in what those people do once they're there -- and what they will do there will be far more important to the company's revenue over time than an ever-expanding user base. As CEO Mark Zuckerberg explained in a recent video, Facebook's strategy is to power a "world where every product experience you have is social," meaning that "almost every app that you use is going to be integrated with Facebook in some way." In order to achieve that vision, Facebook will either need people to hold their noses and share despite their privacy concerns, or it will need to get that 59 percent figure much lower.

The former is much more likely. Assuming distrust remains high, Facebook apps still have a lot of room for improvement -- better design, better features, and, particularly, better mobile experience all afford Facebook faster, more efficient growth possibilities than building up user trust.

But Facebook may also find that through better apps and app integration it can also achieve the latter. Studies show that as people have positive experiences with online interactions -- particularly when their expectations are low -- they come away feeling much more trusting. For example, people who don't trust e-commerce vendors will quickly come around after even just one positive result. Facebook may go through much the same thing: As people use its services more, as its apps improve, the trust issue may ebb -- particularly if Facebook can avoid mistakes like those it made in its early years, which may still be undergirding the widespread sentiment of skepticism today.

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Rebecca J. Rosen is a senior editor at The Atlantic, where she oversees the Business Channel. She was previously an associate editor at The Wilson Quarterly.

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