Last Updated Jul 5, 2011 6:11 PM EDT
When faced with competition, smart companies find a way to provide more value to customers to keep them. But when managers get scared or angry, they stop thinking rationally and start reacting, whether trying to sue a competitor out of existence or, in this case, lock down data to keep users from switching to another service provider. There's just one problem: you could argue that the collection of data actually belongs to the users. In its attempt to stymie Google, Facebook will create conditions that will do the opposite and actually drive customers into its competitor's arms.
Don't touch our junk
The extension has been out since last November but gained a lot of attention as a way to pull existing Facebook contacts into Google+. But, as Stephen Shankland at our sister site CNET wrote on Monday:
The tool, though, likely won't sit well at the dominant social-networking site. Section 3.2 of Facebook's terms of service states, "You will not collect users' content or information, or otherwise access Facebook, using automated means (such as harvesting bots, robots, spiders, or scrapers) without our permission."Talk about calling it right. Facebook has already begun to strip emails from the extracted contact information. You can still pull out contact data from Facebook through a Yahoo (YHOO) account and then import that into Google, but it's a clumsy kluge that doesn't always work well. (At least, that's what I found when trying to export my Facebook contacts into Google+ through Yahoo.)
In fact, this isn't the first time that the company has tried to keep users from exporting data. A few years ago, Facebook sued the Power Ventures, whose Power.com website allowed people to pull together their own data from various social networks. Facebook claimed a copyright infringement because, even though they didn't own users' data and the users gave Power.com their user names and passwords to gather the information, the data appeared on copyrighted Facebook pages and the terms of service prohibited users from automated means of extracting their information.
In short, Facebook isn't afraid to play hardball and it continues to lock down patents that will prove useful in a fight with other social networks.
What we've got have here is failure to communicate
However, those should be last-ditch efforts. Facebook is more controlling of its users and what they do than Apple (AAPL), which is pretty astounding. For how long will the ability to export contacts even via Yahoo last? The siege mentality -- lock out the enemy and hope you can out wait them -- must be an all or nothing thing. Any routes past the defenses are potential critical weaknesses.
Maybe Facebook thinks that inconvenience will be enough of a barrier. Heaven knows, many people will give up in the face of complexity. But as experts in customer retention will tell you, that isn't building a loyal following. All you do is breed resentment and a readiness to use another product or service as soon as it's practical.
That's what makes Facebook's gambit dangerous and desperate. It hopes to put off Google, which already sees a billion unique users a month and has many email users. Bottling the data may slow things down, but Google has an unusually clear grasp of long-term strategy. It has lots of money and can afford to build use its social network over time, as it has done with Google Apps and Android.
To block Google, Facebook actually has to block its customers from doing what they want with their own data. It's a recipe to make them more likely to try Google+. And it won't take that long for Google to add enough of such things as gaming and reuniting with old schoolmates to start succeeding, all thanks to Facebook.