Facebook is alive and well, with over 400M users, but some cracks in the foundation are beginning to emerge.  The next year or two is going to be very interesting, and we needn’t look further than two items to prove it (privacy settings and a movie that’s coming out soon).

“Quit Facebook Day” is scheduled for May 31^st.  This stems from a group of users who are very concerned about Facebook’s privacy policy (which is now longer than the U.S. Constitution and has dozens of settings with more than 150 options).   We don’t believe “Quit Facebook Day” is going to result in any type of mass exodus.   With 400M users, the site probably gains and loses a few thousand each day, and the movement has about 1500 committed quitters so far.   Secondly, where are people going to go?  They’re certainly not going back to MySpace, Twitter doesn’t have the functionality people truly want, and the secondary social networking sites don’t have the pizzazz or population.  Facebook is a fantastic, engaging platform that’s also an addictive and important means of communication for millions of Americans.  They’ll be fine … for now.

But where there’s smoke there’s fire, and the controversy over privacy settings isn’t going away anytime soon.  Those that are most upset about the privacy issues are also those whom are most capable of fanning the flames and creating a lot of buzz online.  Trust us; this is a big problem for Mark Zuckerberg.

And while Zuckerberg and his team need to quickly deal with the privacy issues, now comes word of a movie entitled The Social Network. The Hollywood film, due out this fall; will allegedly portray Zuckerberg as a ruthless and untrustworthy sex maniac.  We can’t say whether those allegations are fact or fiction – we’ll unquestionably give him the benefit of the doubt for now – but this is another very serious PR challenge that’s looming in the coming months.  Two big strikes are in front of our eyes.

Think about it like this:  if you own a restaurant and people hear there are rats in the kitchen, you’re finished.   And the two stories above are suggesting there are rats in the Facebook kitchen.  Will Facebook hold on to its dominance, or will the PR damage reach critical mass, resulting in more and more users migrating to other social media sites?

The online world is fickle and one’s success isn’t guaranteed to last long (just ask the generals at AOL or MySpace).  The next biggest thing is truly the next biggest thing.  And whether it’s warranted or not, Facebook is beginning to be positioned as “corporate,” “evil” and “greedy” (the kisses of death in the online world), so there will be some attrition.   Secondly, there will be another social networking site popping up soon that has new bells and whistles, strict privacy policies, and no sales machine (initially) – and the early adopters will buzz about it.

Facebook isn’t going to crumble in 2010 or 2011, but we’d like to add a third variable to this equation that makes us wonder how popular it will be as we near 2012.  Facebook is nearing the stages of being too big.  It’s become everyone’s site.  The reason the largest growing segment on Facebook is women 55-65, is because the saturation level of most other demos is nearing 80-90% – older women may be the last user-growth opportunity.  When you become everyone’s site, it’s possible you’ll become no one’s site (relatively speaking, of course).

We’re fans of Facebook, but we also study social media and trends, and Zuckerberg has some big problems on his hands.  Privacy issues.  Ugly personal allegations.  Being too big.  With such a huge user base, he has the power to overcome those obstacles, but he’ll have to do it right or else the empire will be in jeopardy in a few short years.  In that case, we’ll all be talking about QQ, Renren, Hi5, Bebo, or something else.

Here’s another great,  “refreshed” video from Erik Qualman on social media.  If this doesn’t convey the importance of social media and being mobile in your mind, we’re not sure what will.  And while social media represents a giant opportunity for brands and personalities, there are some critical rules of the road that should not be violated.  We’ll be outlining those rules soon, so stay tuned.  In the mean time, enjoy this video and we’ll see you in the social spaces.  Thanks to Erik for more great work.

This web advertisement (on the right, Glenn Beck) caught my eye this morning.  While self-explanatory, it speaks volumes.  Being multi-platform is not just an opportunity; it’s necessary in today’s world.  The Beck camp realizes it’s not enough to just be on TV and Radio; they must live and breathe online, too.

And this goes for all of us.  Whether a personality or brand primarily resides on TV, radio, online, the stage, the playing field, a book shelf, a brick and mortar shop, or the blogosphere, today’s consumers demand some on-demand functionality and multiple touch points.  In other words, consumers want to enjoy their entertainment and news whenever and however they want.

Further, all brands, in addition to an interactive and fully functional website, should have a customized smart phone app that allows users to get the full experience, plus some exclusive, app-only benefits.

The app examples below (click on the pic for a cleaner shot) – CSPAN, Huffington Post, Dr. Drew/Loveline and Best Buy – while all very different types of content, show a commonality:  an understanding of the importance and power of today’s technology and being multi-platform and mobile.  Don’t let your brand be left behind.   If your brand doesn’t have a smart phone app yet, contact our partners at jacAPPs and they’ll take care of you.

While “American Idol” is still a mega ratings force, the cracks in the franchise are widening.   The show just had it weakest ratings performance since 2002, and it’s down 8% for the season among 18-49s.

Every other network would love to have ‘Idol’s’ ratings, so the situation isn’t dire, but concern must be running through the halls at Fox.  We believe “American Idol” will still easily win the season, but doing so next season and beyond is in jeopardy.  As we analyze the situation, we believe the ratings slips are based on three key factors.

1.  The show is growing stale and predictable:   The addition of new contestants and a new judge isn’t enough to keep the show feeling fresh, season after season.  The format, look, judging style, and commentary are largely the same.  Secondly, some of the musical “themes” are questionable at best, especially if they’re targeting the 18-49 demo.

2.  Fluff vs. Stuff:   At this stage of the competition, with only a few contestants left, producers have the daunting task of trying to stretch 15 minutes of meaningful content into a full hour.   There’s simply too much fluff, not enough stuff.

3.  Star Power:  The talented contestants must be applauded, as they’re doing their best on a difficult stage.  But outside of Krystal (who’s quickly beginning to lose her identity), there isn’t a stand out, “must see” star.   Don’t get us wrong – Lee is phenomenal, Mike is smooth and very likeable, Aaron is this year’s teen sensation, and Casey reminds us that the blues are still cool.  But while there’s a very talented cast, the show lacks a stand out, unique star personality like they’ve had in past years.  And one of the cornerstones of Media Positioning is talent development – we’re hoping for more personality definition to be brought to the surface, so their true star power can be seen.

We wish each contestant the best of luck and hope they have flourishing careers.   Our advice for “American Idol” is to really shake it up next year, or risk damaging the franchise to the point it will be difficult to resurrect.   Even if Simon weren’t leaving, they can’t afford to not evolve.

If you’d like to read more specifics about Tuesday night’s ratings, click here.

We’re not sure if it’s because of Mercury Retrograde or that we’re in a slow news cycle, but there were quite a few interesting Social Media stories popping up today.  Read below and enjoy; but don’t overlook the importance of having a solid Social Media plan for your brand.  There are rules of the road and violating them comes with big risks.  As always, let us know if we can help your brand develop the right strategy.

1.  Sex does sell.  After doing some research, Dan Zarrella, a social media researcher, says, “Articles in my dataset that include sexual references in their titles, are shared on Facebook far more than the average story.”  Read more about Dan’s findings here.

2.  Consumer Reports says half of social networkers post risky information online.  Read about it here.  Just imagine what the marketing pros at Life Lock could do with this information.  Their TV ads could sizzle.

3.  If you don’t think the virtual world’s economy isn’t real, think again.  Second Life users are suing over a virtual land dispute.  This does raise an interesting question:   who owns virtual goods – the creators of the goods or the people who have paid virtual currency for them?  Read more here.

4.  Did you know that 7% of Americans use Twitter.  While the tone of the article, which you can read here, suggests 7% of the American public isn’t an impressive number – and maybe it’s not compared to Facebook – I can think of a lot of brands that would love to have 20 million customers.  Congrats to the Twitter folks.