Facebook... social networking tool or subtle privacy invasion tool?

Came across this short clip that provides an interesting take on the hidden agenda behind popular social networking website Facebook. In it, the author suggests two possible hypothesis of the driving force behind the "free" website.

In the first, it was suggested that Facebook compiles statistics (customer insights anyone?) based on information submitted by users and sell them off to marketing firms (or anyone who will pay for that matter) for commercial gains. This idea is not new or anything to shout about since its a common model in the web content industry. Consumers too, are not complaining so long as it do not cost them money (directly anyway) and that the statistics are aggregated in such a way that personal details cannot be identified/divulged. The problem with Facebook is that its privacy policy makes no attempt to protect its users' personal information as such.

The second theory is much more frightening. The author suggests that based on the ties of the companies that invested in Facebook, data collected by Facebook may be used by a US government project which attempts to piece together a person's entire existence. From people you know, where you work, which schools you attended, how many girlfriends you had, generally anything you and, more importantly, your friends care to share about you on the website.

The significance here is that you really cannot stop your friends from saying things about you which you may deem too personal or confidential. To spook you further, even if they don't implicitly mention anything personal about you, casual references to you may also lead to disclosure of details that you wish the rest of the world didn't know about. For example, a friend A openly declares that he is from School ABC in his profile. Then in a fun wall post or equivalent, he mentions you as a schoolmate. Indirectly, that makes the connection between you and the School ABC!

Scary? It sure is to me. To some, the above may just be myths and wild theories from the paranoid. But I guess as the saying goes.. "It's better to be safe than sorry". So goodbye Facebook... at least until it change its stance on protecting user's privacy!