Facebook's Biggest Obstacle: No One Trusts It

Last Updated Jun 23, 2010 3:08 PM EDT

Facebook must be one of the best-positioned companies in the history of high tech. It has massive following, solid revenues, and enormous potential. But none of that will matter unless it can get past an enormous hurdle: People don't trust the company.

A recent Zogby International poll of U.S. adults showed that about 49 percent trusted Microsoft (MSFT), Apple (AAPL) and Google either "completely" or "a lot." (GOOG) However, only 18 percent of the same group had the same level of trust in Facebook. That's still good compared to Twitter, which came in at 8 percent, as did "the Media."

John Zogby, CEO of the research firm, attributed the problem for both Facebook and Twitter to two factors: lack of brand equity, which takes time to create, and the privacy issue.

Facebook might want to write this off as older people who don't get the new public reality of the world, but the poll suggested otherwise. Of those 18 to 29 years old, only 20 percent had complete trust or a lot of trust in Facebook. Hardly comforting, but not surprising given previous research with a similar conclusion.

Trust is important because Facebook's future rests on people trusting it with personal information, which it can use to more effectively deliver advertising. Some estimates expect the company to cross the billion dollar mark this year. There are entire areas of technology services that Facebook could scoop up -- including the de facto portal of choice.

However, the revenue only increases -- and the new areas of business only remain viable -- if users continue to cooperate. Anyone who thinks that this success couldn't come undone need only think of MySpace (NWS). It's why privacy will remain a contentious issue for Facebook.

Image: stock.xchng user sundstrom, site standard license Related:
  • Erik Sherman On Twitter»

    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.

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