Why Facebook can't open up like Twitter: Life doesn't operate in 140 characters

No matter what Facebook does it never seems to make everyone happy. The latest hubbub: Facebook opens up its activity streams to third party developers, but doesn't go far enough. Why? Damn privacy. 

ReadWriteWeb's Marshall Kirkpatrick makes a great argument that Facebook remains fundamentally close due to its extensive privacy limitations. To developers, Facebook's approach means that they can't see what everyone on the site is doing at all times. To the rest of us, that's a good thing. All Facebook's Nick O'Neill captures the other side of the equation somewhat.

Kirkpatrick writes:

Ask Twitter what people are saying on that site about the swine flu and you can get the full story to parse until you're blue in the face. The new Facebook openness is like interoperability between different telephone handset manufacturers but conversation remains closed between individuals. Conversation on Facebook is no more easy to analyze today than it was yesterday.

And.

The data that developers are able to work with is severely limited. They will simply be able to make a call for a user to Facebook and get back the friends' streams that this particular user has the permission to see...The data that Facebook controls, conversations and social connections, could be used for analysis of real-time social patterns which could lead to world-shaking new insights. Do we get access to that data? No.

Now let's flip things the other way. Let's say Facebook opens up everything. Say Facebook doesn't sweat the privacy nuances. You're either public or private (and most forget the settings). Then there would be a Facebook scale freak out. Why?

Also see: Are social networks the next-gen commerce, CRM hubs?

Twitter can be exposed to the world because it's only 140 characters. In aggregate that limitation may be useful, but the individual isn't going to worry about privacy that much. Twitter is a brain fart on a subway. Facebook is your kids, your wife, your pictures and a social graph that may be a snapshot of your identity. In other words, Facebook is nuanced. Life is nuanced. And as a user I want control of those nuances. Most folks don't live for third party developers. 

The other billion dollar elephant in the room here. Money. Facebook wants to make money and by keeping a lot of the conversation to itself. Facebook is building the analytics to plug into CRM systems and ultimately that's the secret sauce. Privacy today and social commerce tomorrow. Perhaps Facebook only grows from 200 million users to 500 million users, but makes a ton of dough. It could be a win for users and for Facebook's profit margin. Is that so bad?