Facebook, beloved by college students as a parent-free zone for staying in touch, is feeling some growing pains.

Hatched in a Harvard dorm two years ago, the free online service claims 9.5 million members who can share photos, messages and personal profiles. Only the vastly popular MySpace and Classmates.com, among social networking sites, draw more monthly visitors, according to comScore Media Metrix.

But Facebook sparked a revolt last month with a new feature that some members saw as a privacy threat.

Last week, amid reports that Yahoo is eyeing a $1 billion purchase of the service, Facebook opened membership to anyone with an e-mail address. That’s not sitting well with Facebookers.

“Now that Facebook is opening up to the general public, I just don’t think it’s going to hold the appeal for the early 20s like it did in the beginning,” Princeton University senior Shannon Wallace said. “Facebook used to be a place where you didn’t have to put an air on for older people or try to cover up stuff for people younger than you.”

It’s a ticklish conundrum for Facebook, a challenge many popular Web sites confront sooner or later. How do you add newcomers – enhancing your value to advertisers and buyers – without riling users who put you on the digital map?

“They have to walk a fine line as they open up the network to people that weren’t part of that exclusive club,” said Mark May, an Internet analyst for Needham & Co. in New York.

Facebook, he said, somehow must maintain its appeal to young people who “felt they were protected from outside forces like advertisers, or commercialism, and also from the “dirty old man.”‘

Social networking sites became hot properties last year when Rupert Murdoch’s News Corp. bought MySpace for $580 million. Google recently agreed to pay $900 million for exclusive rights to supply ads and search functions on MySpace.

Other players include Xanga, Friendster and Orkut. A Microsoft spin-off called Wallop is joining the fray.

Why?

“These social networking sites have become the modern day version of the mall, where young kids go to socialize,” May said. “Advertisers are trying to figure out how do I reach this demographic, because I can’t reach them anymore at school, or cold-call them on the phone, and e-mail has filters. … With the popularity of social networks, there they are.”

There was trouble in the virtual mall last month when Facebook introduced a feature called News Feed. It broadcast changes made to a member’s profile to anyone on that person’s list of friends. Every tidbit large or small, from romantic breakups to a new favorite song, became instant news. Members expressed fear of stalkers and threatened boycotts; Facebook raced to add controls so members could hide profile changes.

“We really messed this one up,” co-founder and chief executive Mark Zuckerberg conceded in a blog posting three days after the feature debuted.

When Facebook started accepting members from high schools a year ago, Carlo Badiola was disappointed. The New Jersey Institute of Technology sophomore remembers how his high school pals had looked forward to college so they could join Facebook.

“This took away the cool part of it,” said Badiola, who kept his membership just the same.

In May, Facebook admitted people with workplace e-mail addresses. That was broadened last week to allow nearly anyone to join regional communities within Facebook.

Those changes angered Rebecca Colangelo, a Morris Plains, N.J., resident attending college in North Carolina.

“You can get yourself in trouble accidentally,” Colangelo said. “There could be a picture of you running naked down the street and your parents find it inappropriate. Something stupid like that.”

Colangelo said a college friend has refused to designate her own mother as a Facebook friend, because she doesn’t want her mom viewing her pictures. “I wouldn’t want my mom going through my pictures of me,” either, Colangelo said.

Many schools have warned athletes to be careful with their online postings, and Loyola University in Chicago even declared Facebook off-limits.

Carolyn Abram, Facebook’s “resident blogger,” said memberships were expanded to satisfy users who complained that friends were kept out by overly strict requirements.

Facebook now requests a cell phone number at registration, to authenticate new members. And users still can dictate how exclusive they want to be, Abram said via e-mail.

“To clarify, networks are closed off to each other, but people can have friends in other networks,” Abram said.

“For example, I am in three networks, Facebook, Stanford and Silicon Valley. This means that, depending on the privacy settings of the other people, I can see the profiles of the people in these networks.

“If I know someone in the San Francisco network, I can search for him or her (provided their search privacy settings allow it) and request to add them as a friend, but I will not be able to see that person’s profile and personal information until they approve my request.”

Facebook would not discuss media reports about Yahoo’s purported interest, or field questions about whether it’s targeting MySpace, which launched a month before Facebook and claims 114 million members.

“We want to help people understand their world, and the expansion is in line with this goal,” Abram said. Yahoo and MySpace declined to comment.

Facebook appeals to a narrower audience that is unlikely to rival MySpace, which could mushroom into a $15 billion company by 2009, according to analyst Jordan Rohan of RBC Capital Markets. “MySpace is more about culture, music, things like that,” Rohan said.

The real question for sites like Facebook and MySpace isn’t widening their reach – it’s how to make money from the audiences they already have, said Nate Elliott of JupiterResearch. “The reality is none of these guys know how users will react to any of this,” he said.

But Elliott is sure that Facebook already has crossed from “cool” to mainstream.

“They can’t all be cool kids on Facebook,” he said. “There aren’t that many cool people.”


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