Let's Call Facebook What It Really Is

Fakebook? Facebots? Either way, Facebook needs to address its 83 million fake accounts, many linked to click fraud, before its reputation slides further.

Just when Zuckerberg et al thought it couldn't get any worse, it gets worse.

Ever since its IPO in May, Facebook's stock price has been circling the big drain like a beloved family goldfish. (What was his name again?) Zucky's personal wealth dropped to a mere $12.1 billion last week, according to Bloomberg Business Week. He probably can't even rate acorner booth at Buck's with that paltry fortune.

Now it seems that Facebook is riddled with fake profiles -- some 83 million of them, according to its own estimates. In an SEC filing this week, the social network admitted that 8.7 percent of its 955 million active members are using duplicate or false accounts. Of those, about half are simply duplicate accounts for legit Facebook members, the company says. Another third or so are personal accounts for businesses, organizations, or pets that really should be Facebook Pages. What's left are the problem children: the 15 million or so bot accounts that are used for spamming, malware distribution, and click fraud.

If you've been following Facebook lately, that news should hardly come as a surprise. In June, ITworld's Thank You For Not Sharing blogger Dan Tynan wrote a series of posts on the seemingly endless Facebook bots he's been encountering lately. Those bots were employed to artificially boost the Likes on the Facebook pages for small businesses -- sometimes without the businesses even being aware of it.

Last month, BBC reporter Rory Cellan-Jones set up a Facebook Page for a fake product called Virtual Bagel and bought some Facebook ads to promote it. Within a few days, the page recorded more than 3,000 Likes -- at least some of which came from fake accounts. Of course, every time someone clicks an ad, Facebook makes a few pennies; it doesn't matter whether the clicker is human or not.

Now we have examples of real companies bailing out of Facebook, thanks to fake clicks. Over the past few months tiny Web music e-tailer Limited Run (formerly Limited Pressing) bought some Facebook ads to promote its newly launched site, but it noticed something funky going on. Four out of every five clicks on its ads appeared to be from bots. Limited Run decided to bail on Facebook, but first, the employees wrote a blog post about the decision -- and about Facebook's demands for $2,000 a month to let the company change the name of the Facebook page:

Facebook was charging us for clicks, yet we could only verify about 20% of them actually showing up on our site. ... So we did what any good developers would do. We built a page logger. Any time a page was loaded, we'd keep track of it. You know what we found? The 80% of clicks we were paying for were from bots. That's correct. Bots were loading pages and driving up our advertising costs. So we tried contacting Facebook about this. Unfortunately, they wouldn't reply. Do we know who the bots belong too? No. Are we accusing Facebook of using bots to drive up advertising revenue. No. Is it strange? Yes.

That post generated a lot more attention than the LR guys expected. The story got covered by theNew York Times, Wired, SlashGear, and several other news sites. It also got Facebook's attention in a big way. After the hubbub, the Limited Run crew decided to delete that blog post, but a cached copy was still available at blog time.

Facebook claims to be flummoxed about who's doing all that clicking on its behalf, and most of the bots seem to be based overseas. Given that botmasters aren't known for their pro bono work on behalf of multi-billion-dollar corporations, I suspect some rogue Facebook employee is behind this, probably in some location far far away from Palo Alto. The question is, how motivated is Facebook to find this person?

There is a thriving business in fake Facebook accounts, and it's been going for some time. To be fair, there's an equally thriving business in fake Twitter accounts, G+ profiles, YouTube clicks, and the like. On the InterWebs, nobody knows you're a dog. Facebook has gradually been trying to shut these down -- the site YouLikeHits.com, for example, was ordered by Facebook's legal eagles tostop selling Likes back in June. That's a very small drop in a rather large bucket.

If Facebook wants its business model to survive, it needs to clean up its act in a hurry, before the big advertising fish start bailing. That, or rescind its IPO and go private again, where the fakes and frauds are easier to hide.