I’ve seen a lot of angst over the past week about Facebook’s moves to open up your data to other applications.

To really understand how huge these changes are I had to get away from Silicon Valley and come and hang out with the geeks in Kinneret, Israel where famous VC Yossi Vardi is throwing an exclusive camp for geeks and successful business innovators.

To be sure, there is some fear and even a bit of hatred here of Facebook. Let’s detail that fear and hate:

1. Facebook has broken an invisible privacy contract with its users. Most of the geeks here say they expected Facebook to be about sharing photos, videos, and thoughts with friends and family. But now their previously private data is showing up on Yelp, Pandora, and Spotify. That wasn’t expected by the users, so has generated quite a bit of discussion here.
2. Facebook is very quickly painting the web with little like buttons and other social widgets. One CEO I talked with, who asked me to keep his name and company name out of this article but who runs one of the top 50 websites according to Comscore and Compete.com, told me his company will add Facebook’s likes next week. He’s not the only one saying that. My prediction that 30 of the top 100 Websites would incorporate Facebook’s likes in the first few months might turn out to be very low, based on what I’m hearing in Israel. But that does worry geeks here who are seeing that Facebook is very quickly getting their fingers (and branding) into a very large chunk of the web.
3. I’m sharing a room with one of Yahoo’s search strategists here at Kinnernet and, while he wasn’t able to tell me what direction Yahoo is going in, it’s clear that Facebook has disrupted his thinking of where the world is going. If Yahoo is feeling the disruption imagine what it must be like over at Google! Facebook is studying metadata from all these likes and other behavior of ours and I believe is preparing new kinds of search and discovery services. Facebook doesn’t need to “kill” Google to have quite an effect, either. They just need to put a box around Google which would keep Google from growing. What happens when Google can’t grow the way it wants to? Flat stock prices and loss of ability to hire the best employees that comes with it. Google is the new Microsoft, the geeks here say.
4. The geeks here say that it is clear that Facebook is becoming a dramatically more important, and larger, company than they expected. So, now, new business plans are being changed to account for Facebook’s new power and stance in the world.

So, why is it too late to regulate Facebook?

Well, first of all, what can government do?

1. They can force Facebook to switch its defaults on its new Instant Personalization program, which is already being used by Yelp and Pandora (you can see which music I listen to, for instance, on Pandora, and that feature got turned on automatically. The government could force Facebook to turn that feature off by default and make me “opt in” for you to see my Pandora music.
2. They could fine Facebook for its behavior.
3. They could call Mark Zuckerberg in front of Congress and call him nasty names.

But what else could the government do? I don’t see too many options. Do you?

So, why is it too late to regulate Facebook?

1. The damage is done. Well, let’s assume they made them switch Instant Personalization to opt in. Who cares? The damage is done. My Pandora already has all your music shared with me. Most Facebook members won’t change their privacy settings from what they already are. So, old users will keep sharing their music and only new members will be asked to opt in to these new privacy-sharing features.
2. The regulation will come too slowly. Government never moves fast. Even when it’s motivated. So Zuckerberg has at least a few months to aggregate his power before Government slaps him on the hand. Government is not going to be able to prevent that top 50 website from putting Facebook’s new features into its service. Government will not keep me from using Pandora.
3. The regulation will come after we get used to new privacy landscape. Already I’m finding I’m getting used to the fact that you all can see my data and that I can see yours. So, if Government comes along and tries to regulate that it will get pushback from me. Why? Well, I actually like the new Pandora features. I’m finding a ton of cool music because Zuckerberg forced you to give up some of your privacy. So what that I can see that you like Kenny G? Users will get addicted to these new features and they won’t take kindly to some government jerk taking away these new features.
4. Giving Zuckerberg a fine will not change Facebook’s behavior. If anything it will just push him to monetize these features more aggressively in order to pay the fine. Just wait until Cocacola icons show up next to all those Facebook like buttons. Government taxation, which really is what fines are, might have a negative effect long term.

So, what can be done about Facebook? I don’t see what we can do about Facebook. Not enough people have changed their behaviors due to these changes. I’m watching and these features are VERY popular. Even here in Israel, far from the hype bubble of Silicon Valley, all the geeks I talked with are impressed with the new features and many are already implementing them. No one sees Facebook as less powerful or less interesting today than two weeks ago. Even with a few of my geeky friends saying they deleted their accounts from Facebook my feed there is actually moving faster lately and my items are getting more engagement, which shows that not many geeks changed their behavior away from Facebook.

Zuckerberg just played chicken with our privacy and it sure looks like he won based on what I’m hearing here in Israel.

What do you think?

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