At its core, facebook contains a useful service. It's messaging capabilities are good, and the fact that identities and connections facebook are persistent effectively combats the problem that plagued much of the early internet: constantly changing pseudonyms and emails. I know that it is not necessary, but it is convenient. Additionally, its support for multimedia posts, links, profiles and other adds a nice, rich experience.<p>Unfortunately, many of the internet's great consumer businesses were built on this premise that advertising will pay for everything. That premise has been a good one for many years now, but, advertisers are getting savvier, and the addressable market is getting addressed pretty well. yes, there is room for growth, but, for many advertisers, that growth is not inside their target markets. While targeted marketing does provide value, I think it is an open question "how targeted is enough targeted?" Meaning that there is not definitive and universal data on where the benefits of less privacy really result in positive outcomes for advertisers. I would guess that in many cases greater accuracy in audience targeting does not result in statistically significant improvements in conversions when balanced against the increased cost of hyper targeted vs semi targeted ads. I am sure this depends heavily on many factors.<p>The challenge, though, is that facebook has to grow revenue, and, they have pursued this with advertisers by attempting to differentiate their ad products on the basis of hyper targeting. they <i>do</i> have differentiated ability to do this, and it gives them a competitive edge. It means that they spend the majority of their time building products that the liminal areas around personal privacy and ethics.<p>This puts them in a very difficult spot, because many of their competitors <i>in the ad business</i> are doing the same thing, and trying to get the same level of detail. Google has not launched multiple social networks just for the fun of it...they did it to serve their customers.<p>The monetization and differentiation that facebook has pursued has pushed them to be on the bleeding edge of selling granular, user-specific data. This seems unlikely to change without an outside force to force a change of behavior in their competitors as well. If you take away the competitive pressure to do something (by making it illegal, for example) then it can avoid further progress in this arms race.