How AOL—Aka Facebook 1.0—Blew Its Lead

[Commentary] Critics mocked America Online as "the Internet with training wheels," yet in the late '90s that was just what Web neophytes wanted—easy access, and all the neighbors you ever wanted to hang over a clothesline with. Community drove the growth of the service. And grow AOL did.

A million members in 1994. Five million in 1998. And from there, exponential growth, another million every 125 days, all of them eventually paying $23.95 a month to enter our walled garden. For the most part, they stayed there too. In 1998, a Taliban of white male MBAs swept in and brought the editorial team to heel. For the rest of my tenure, we made dumbed-down, vanilla fare. The main screen became what I called "24/7 Britney." The illogical reason? "We're under more scrutiny now."

Like AOL, Facebook is growing exponentially. Like AOL, it's a walled garden, committed to keeping its users inside its walls for most of their Internet needs. Unlike AOL, though, it doesn't charge its members. And it makes very little money per member; on a per-user basis, Facebook makes about $1 in profit yearly. The pressure to exploit 845 million users has got to be intense, and by changing its definition of "privacy" so it can share member information with advertisers, Facebook has already disappointed some of its users. Perhaps the example of AOL will remind Facebook's newly rich staffers that the customers, if taken for granted, move on.