So here’s a little shot from the world of Social Media: (It’s a couple of days old, but what are you going to do!)

A few days ago many people were reporting this:

TG Daily – UPDATED: Facebook changes policy, now owns rights to your content forever

With the new terms of use Facebook effectively owns each and every item you have posted to their site thus far.

Many people uttered an ‘it figures’ – and I even caught a tweet like this:

Twitter / TC Krantz: Deactivated FB accounts an …

Deactivated FB accounts and took photos, art out of MySpace to be safe as well. I’m really considering deleting my MySp acct too.

And…

Facebook Terms of Service Change Rapidly Turns Into a PR Nightmare

Talk about a snowball effect. Since Consumerist posted the article about Facebook’s subtle change of terms over the weekend, users have begun lashing out about it and is now sparking a formal complaint to the FTC.

But, if you read the top article completely (or this) you’ll find out that Facebook has decided to take this whole thing seriously.

Facebook Revises Back to Original Terms

Mark Zuckerberg has just posted an update to the Facebook blog stating that they’ve decided to revise the terms to what they were previously.

(The last link is dated yesterday, February 18th, 2009.) I think this problem was inevitable, and I’ll explain why. Facebook needs to make some money on what they are doing, and since Facebook accounts are free (we can thank competition + capital for that one) and most services on it are also free (except for the $1 gifts) they have turned to advertising for money.

The only conceivable advantage Facebook advertising has over, say Google, Yahoo, and MSN, is that instead of just ‘seeing’ the page the surfer is looking at, or the terms they have just entered, Facebook sees status updates, photos, interests, friends, fan pages, groups for that same person.

Having dabbled with the platform myself, I can say that most information – like ‘interests’ for instance, is very inconsistent as a field to use for keywords, and thus to reach a good audience one often has to use very basic methods. This would mean geo-targeting, male or female, and maybe relationship status. That means, things almost everyone has entered.

But what if you could scan their notes, posted items, status updates, and comments for keywords? To do this, though, I think they were advised they would need to ‘own’ that content – just like Google owns your search when you enter it. (And as a side note has not given that information away to the government, as of yet.)

If that is the real cause for the change in the policy (which is now rescinded) or not, I can’t say – I don’t work for Facebook. It does however, seem to me to be a candidate for the correct answer. For the social media startups – and the big players – profitability is a big issue.

In the first article I linked, you’ll find there are a few terms added in the TOS here:

license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing.

Against:

license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising…

It’s reworded to begin with, but the second has a lot more terms ‘modify, edit, adapt…’ and an explicit line about Advertising.

As for the removal or the ‘If you choose to remove your User Content at any time…’ clause, which states that their license to your stuff expires when you remove it, I can only guess the machinations behind it. But I’ll bet it’s to protect their use of your stuff for data mining.

Good, bad, ugly? Facebook has a had a little of all three. My guess is that unless we’re willing to pay for Facebook accounts, we should expect more of this.