'Facebook Killer' Ello Doesn't Care About Money—So It Won't Work

Ello’s founders, a group of designers and programmers led by artist Paul Budnitz, use the statement to criticize social networks for building businesses that track their members’ personal data and sell it to advertisers. “Your social network is owned by advertisers,” they write. “Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold.”
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I was sitting in the New York loft in November 2007 where Facebook founder Mark Zuckerberg introduced Beacon to a roomful of skeptical advertising execs. Like many things Zuckerberg has tried over the years, this advertising product didn't work, with countless people complaining it crossed the privacy line, and Facebook had to revamp the company's ad strategy.

But even then, when Facebook still felt more like the cool kids' club with the good-for-the-world glow that comes from a powerful mission (connecting everyone in the world), Zuckerberg understood something fundamental about the nature of his endeavor. "Look, we're a business," he told reporters in the pressroom. "We're going to make money. If you don’t like it, you can find other websites."

I can’t help thinking about this while reading the manifesto circulating the web from Ello, the mysterious and buzzy social network that's just the latest "Anti-Facebook." Ello's founders, a group of designers and programmers led by artist Paul Budnitz, use the statement to criticize social networks for building businesses that track members' personal data and sell it to advertisers. "Your social network is owned by advertisers," they write. "Advertisers buy your data so they can show you more ads. You are the product that’s bought and sold."

Ello’s founders---like so many Anti-Facebookers before them---have it wrong. Facebook, as the world’s largest social network, is owned by shareholders and run by a management team that spends a good deal of time striking the right balance between the needs of its users---the 1.3 billion people who are active monthly---and its advertisers.

It's tricky. Should Facebook cater too directly to advertisers, it risks alienating users, who will take their vacation photos and status updates somewhere else. But should Facebook abandon its business interests, it quickly would run out of the resources it needs to provide fast, safe service across many platforms—the very thing users take for granted.

>Should Facebook abandon its business interests, it quickly would run out of the resources that allow it to provide a fast, safe service across many platforms

What's more, you---i.e., the user---are not the product on any social network. To suggest you are takes away any agency you have over your actions. Yes, it's true the personal data you choose to input will be used in ever more sophisticated ways to help advertisers show you things to buy. But you are making the choice to upload a political article you’ve read or allow others to tag you in photos.

Ello promises an ad-free alternative to these platforms. But there’s a simple truth about social networking: Brilliantly nimble and reliable services cost money to produce and maintain. Should users flock to Ello, which launched at the start of August and is currently invitation-only, its founders eventually will need to find a way to support it.1

They could charge membership fees, but this hasn’t yet worked effectively for a general interest social network. They could collect donations and use free software, but this probably would lead to an inconsistent consumer experience, and people have little patience for that. What’s more, the company has received $435,000 in seed funding from the Vermont firm FreshTracks capital. Investors expect returns.

More likely, Ello will follow the path blazed by those have come before it. Remember Diaspora? The social networking service started by four New York University students in 2010 raised $200,000 on Kickstarter to build an open-source alternative to Facebook that would give users more control over their personal information. But it never really caught on. Two years later, The New York Times reported that the project "seems to have petered out."

If users fall in love with Ello, which actually appears to work more like Twitter or Tumblr than Facebook, it will also have to negotiate the tension inherent in funding and building something socially meaningful. The Ello manifesto sets high expectations for how its founders hope to approach this conundrum—by thinking only of users. But it’s unrealistic, and will cause the project to fail.

1Correction 10:11 EST 09/26/14: An earlier version of this story incorrectly identified Ello's launch date.