When Fred Wilson talks, people listen, and recently Mr. Wilson took a not so subtle (nor inaccurate) jab at Facebook and its ilk:

The challenge for large social networks is to undo permissions that they’ve already given. Meanwhile, a startup is at an advantage as they can build something from scratch that allows the user to predefine the data terms for sharing.

Wilson was gushing about Foursquare — a company in which Wilson’s VC firm has invested, so take his observations with the appropriate desert of salt — but the point is no less cogent. Large companies with entrenched business models cannot easily pivot their operations. (Marketing they can change quickly, whence comes spin.) This is especially true of changes that run counter to foundational company culture.

Google, Facebook, Apple and every billion-dollar player out there have an entrenched approach to many aspects of online business, including security and privacy. It has been loudly and snarkily argued that Google’s utilitarian engineer-first culture can’t build successful social apps. Apple has a beautiful design obsession, which means they might build death-grip phones. Facebook was (at least anecdotally) founded by someone who doesn’t give a damn about privacy.

If these were still scrappy upstarts with a dozen or so employees, it might be possible for company culture to shift to address these shortcomings. But each of these firms has thousands of employees in multiple countries, and the corporate culture is the only thing that such a dispersed and diverse group has in common. It’s their corporate DNA. And when a technical gaffe or market shift makes those traits a liability, they’ll be unable to adapt quickly.

If your privacy and security needs run counter to the predispositions of these companies’ cultures, odds are they’ll be unable to fundamentally address the problem in anything resembling a timely fashion, and that they’ll unleash spin well before they unleash apologies. Google Buzz. Facebook Beacon. The iPad iLeak. Every company has blindspots, and your private data might be caught in them — even absent malicious intent.

Hope you’ve got a backup plan.

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• Congress To Probe Tech Giants On Privacy (huffingtonpost.com)
• Fred Wilson: Apple is “Evil” and Facebook is “a Photo-sharing Site” (gigaom.com)
• Empowering users to control their privacy (googlepublicpolicy.blogspot.com)
• Mark Zuckerberg and Facebook, CEO’s Are Their Brand (pamil-visions.net)
• Privacy as a Social Differentiator (broadstuff.com)

Tagged as: Apple, facebook, Facebook Beacon, Fred Wilson, Google, Google Buzz, Privacy, Social network