Has Facebook ruined Silicon Valley or just changed it?

As giants like Google and Apple and Amazon and Facebook battle for supremacy, venture-capital veteran Bill Davidow says, their main weapon is the ability to lock web users into their ecosystems and then exploit the data provided by consumers, along with the other elements of this unbalanced relationship.

He doesn’t mention it, but a great example of what I think Davidow means is the way that Facebook routinely seems to change the terms of its offerings primarily for its own benefit — including the way it recently made facebook.com email addresses the default for all users without telling anyone. Would older Silicon Valley companies have treated their customers this way? It’s hard to imagine how — but then, their businesses were very different, in a time before social media took over the world. Davidow argues that this kind of behavior is almost required in today’s environment, since everyone is after the same goal: accumulating as large a user base as possible, so that it can be monetized in some way. If Google can’t generate what it needs with Google+, then Facebook wins — and if Facebook can’t make inroads into mobile, then Apple wins.

The fundamental shift behind what Davidow is describing is that consumers are not really Facebook’s customers — as more than one person has pointed out, they are actually the product that is being sold.