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Facebook's Flaw Not Privacy, Sean Parker Says

If Facebook has a weakness, suggests Facebook investor Sean Parker, it's alienating power users with too much data.

Setting the theme for the 2011 Web 2.0 Summit in San Francisco on Monday, conference co-chair and O'Relly Media founder Tim O'Reilly recounted the way that Google's director of research Peter Norvig has described his company's advantage: We don't have better algorithms, we just have more data.

The Web 2.0 Summit this year is being described as an exploration of the data frame, the way in which companies turn data into meaningful business information.

"We're on the threshold of a new industry with data," observed Marc Benioff, CEO of, during a conversation with O'Reilly.

As an example of where the enterprise software industry is going, Benioff pointed to Facebook. "I really think that Facebook is becoming a vision and execution of the next generation consumer operating system," he said.

Facebook, he said, shows where the industry is headed and sets the pace for what we should be doing in the enterprise world.

Benioff's admiration is based on the fact that enterprise users and customers are participating in Facebook. It's where people are going and learning how to share, he said.

[ Data is the new black. Read Web 2.0 Summit Preview: Meet The Data Frame. ]

That was only a few minutes after Battelle had tried to get Napster co-founder and Facebook investor Sean Paker to weigh in on whether people should be concerned about the potentially creepy aspect of Facebook.

In a lighthearted acknowledgement of his likely bias, Parker said that "as a Facebook shareholder it's a little tricky to answer that question satisfactorily." Even so, he tried, first by quipping that "today's creepy is tomorrow's necessity," and then by observing that privacy--Facebook's serial stumbling block--may not be the biggest threat to Facebook.

Facebook's biggest issue, he suggested, is the glut of information that overwhelms power users. That could end up pushing power users toward Twitter or Google+, he mused. Facebook's challenge then is not so much gather more data as it is to give its users better tools to control shared data more effectively.

For John Donahoe, president and CEO of eBay, Facebook is not a threat but an ally. Donahoe talked about eBay's strong relationship with Facebook and its exploration of ways to connect its PayPal payment system to Facebook Credits. "Shopping is very social, " he said.

eBay's challenge is to become an e-commerce platform system for retailers, a company offering not just a sales channel but computing infrastructure. Donahoe sees e-commerce and retail becoming one and the same. In over 50% of all retail transactions, consumer access the Web at some point in the shopping cycle, he said.

Asked by Battelle how eBay's strategy differs from Amazon's, Donahoe said, "We don't compete with the people who sell on our platform."

That's not something many of today's leading platform owners can say.

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