Friday, January 27, 2006 The humble beginnings of many popular Web services, such as Google, LiveJournal, and Yahoo!, are well-documented and available on their websites, and frequently recounted in news stories about the firms. These websites are also scrutinized for any perceived violations of users' privacy or other basic rights.

However, until recently, no investigation had been done into MySpace and Facebook, two new "social networking" sites of explosive popularity among teenagers and college students. American bloggers, using Google and financial records, have begun investigations into the origins and policies of these sites, making some claims that the site owners explicitly deny.

Facebook

Facebook was founded by Mark Zuckerberg, an individual web developer looking to make friends at Harvard University. Although Facebook has been sued by ConnectU.com for allegedly copying its concept and data, Facebook is actually the first worldwide college network on the Internet. As one of the most popular college websites, Facebook is notable for its lack of prominent advertising. It quickly accumulated $50,000 in debt in 2004, and it took nearly a year for it to begin turning a profit, so clearly it needed a large amount of venture capital.

In August 2005, independent blogger Josh Smith theorized that Facebook could actually be a data-gathering operation. He determined that Facebook received its initial funding from Peter Thiel, which he named as co-author of the book "The Diversity Myth", which argues that "multiculturalism" is used to promote social intolerance on American college campuses. Smith also found that Facebook also received $13 million in funding from "Accel Partners", a firm whose manager James Breyer formerly served as the chairman of In-Q-Tel, a venture capital firm operated by the United States Central Intelligence Agency.

However, both Accel Partners and Peter Thiel have invested in many dot-com companies. Peter Thiel is the co-founder of PayPal, and James Breyer has done extensive work in Silicon Valley. Investigating a firm's sources of venture capital has not often led to breakthrough exposes in the past.

More importantly, Smith discovered clauses in Facebook's current Privacy Policy which state that they "may share your information with third parties, including responsible companies with which we have a relationship". The Privacy Policy also warns that "Facebook also collects information about you from other sources, such as newspapers and instant messaging services. This information is gathered regardless of your use of the Web Site." Other bloggers have also called attention to this ambiguous statement, which seems to point towards a Facebook conspiracy theory. User "timg" at the Reddit news website noted that "these sites provide possibly the most accurate and easiest to use resource for mining information about groups of people."

According to Chris Hughes, spokesperson for Facebook,

The clause you reference in the privacy agreement is leftover from an outdated version of the privacy policy which is currently being updated. We used to have a couple features on the site that aren't still there, such as collecting users' away messages from AIM (if they said they wanted it) and displaying mentions of their names in campus newspapers (again, upon request). That clause will not be included in the upcoming version of the privacy policy which will be released in the next couple of weeks.

The main issue surrounding Facebook is one of trust. Privacy advocates on the Web are always wary of any website that asks for detailed personal information, and Facebook takes this to the extreme by displaying entire social networks. However, most Facebook users seem to trust it deeply, providing full friends lists, phone numbers, and personal photo albums.

MySpace

Trent Lapinski, another blogger, began an investigation into MySpace in July 2005, when it was acquired by Rupert Murdoch's News Corporation, parent company of FOX News. MySpace does not often receive criticism about privacy issues, as its users typically do not give out last names or other personal information, but its company history is more interesting. Lapinski was threatened with a lawsuit by MySpace's legal team when he let them know about his investigation, but on January 4, he decided to come forward with the details anyway.

MySpace expressed interest in commenting on this Wikinews article but did not respond by press time.

MySpace's CEO Chris DeWolfe and its most prominent spokesperson Tom Anderson first met in 1999 at Xdrive Technologies, a dot-com startup which gave away free storage space to Internet users. DeWolfe and Anderson went on to work together at ResponseBase, LLC., which was acquired by eUniverse, Inc., which later became Intermix Media. The relationship between these three companies is tangled indeed, and involves the MySpace name itself.

MySpace banner from 2001, 2 years before the site was allegedly founded.

According to Chris DeWolfe, "the general MySpace site" was launched in September 2003. Tom Anderson claims that "MySpace was a creative idea before it was a business." However, long before MySpace became a social networking website, the name MySpace and the domain myspace.com had been used by ResponseBase for their profitable newsletter about "Freebies, Deals, & Discounts", and a free disk space host similar to Xdrive. Newsgroup archives show multiple messages linking to copyrighted files hosted on MySpace. In 2001, MySpace's spokesperson was quoted in an article about "warez". The Internet Archive has backups of MySpace.com going back to 1999, but these cannot be accessed because MySpace's current owners have blocked the Internet Archive specifically from accessing the site.

One newsgroup message from 2001 documents the transition from MySpace to ResponseBase:

Got more steaming piles of spam from "Media Now!" aka "responsebase.com". The specific username that the spams were sent to was only given to a specific company (freediskspace.com, later myspace.com) for their use only. Unfortunately they sold it, even though my business relationship with them ended in May 2001 when they discontinued the service I was using. Apparently they couldn't pay their bills and sold their list to spammers.

Actually, MySpace had simply shut down and become ResponseBase-- as evidenced by the "Freebies" newsletter above. ResponseBase also used a list of 8 million e-mail addresses purchased from Xdrive for their newsletters. In 2002, ResponseBase was booted from their ISP as an illicit spam organization-- with Tom Anderson himself listed as their billing contact. And later still, ResponseBase would be renamed to MySpace.

In 2002, DeWolfe went on to become a director of "Fog Cutter Capital Group", whose CEO, Andrew Wiederhorn, was convicted of income tax and pension felonies and sentenced to prison. Fog Cutter continued to pay Wiederhorn a salary of $350,000 per month for 18 months while he sat in jail. Wiederhorn's wife, Tiffany Wiederhorn, is on the board of directors at MySpace's parent company Intermix Media.

Intermix Media itself has a tangled history. In 2004, Intermix (then operating as eUniverse) was named as a spammer organization on USENET. It purchased ResponseBase, shut down its operations, and reformed it as MySpace. On April 28, 2005, Intermix was sued by the State of New York for installing malicious spyware over the Internet. According to their press release:

The Attorney General documented at least ten separate web sites from which Intermix or its agents were downloading spyware, providing either no warning or other misleading disclosures. In this way, Intermix and its agents downloaded more than 3.7 million programs to New Yorkers alone, and tens of millions more to users across the nation.

Intermix also went to great lengths to protect the spyware and adware it secretly installed. The programs were hidden in unlikely locations on the computer and could not be removed through a computer's "Add/Remove" function. In addition, the programs omitted "un-install" applications, and even reinstalled themselves after being deleted.

Just before the adware investigation was announced, Intermix's primary investors sold $25,000,000 worth of Intermix stock at roughly $8 per share. When the attorney general announced the investigation, Intermix stock fell to $4 per share. Intermix's former CEO, Brad Greenspan, has accused Intermix investors of insider trading.

Soon afterwards, the spyware issue was settled out of court; Intermix paid $7.5 million to the State of New York.

According to The Economist, "As an internet business, MySpace.com considers itself to be an entirely new breed ... The community has grown virally, with no advertising." However, this leaves one crucial question unanswered: without advertising, how did the site become popular in the first place?

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