#Facebookdown Today, but What"s Threatening Facebook Tomorrow?

Breaking: "Facebook Is Down" Dow Is Down -315 Points

NEW YORK (TheStreet) -- Facebook (FB - Get Report) is skating on thin ice after experiencing its third site wide outage in three weeks yesterday. Momentsafter Facebook went dark, Twitter (TWTR - Get Report) exploded with angry users using the hashtag #facebookdown to track the service glitch. No surprise,Facebook ended Monday down 3.84% to $89.21 and is still down in trading today.

In the past two weeks, Facebook experienced two other service hiccups, one on September 17and the second on September 24. This isn"t a good time for people to be questioning Facebook"s ability to provide reliable connectivity asthe company faces continued controversy around its new initiative, Internet.orgwhich offers free, but limited, Internet to emerging markets.

Since April, Facebook has been taking a more visible stand onproviding Internet to users in developing countries. Partnered with various wireless carriers and organizations, Facebook launched Internet.org to offer free access to a collection of Internet services (including Facebook) in developing countries. But the project has been off to a rocky start, adding more volatility to Facebook share price over the past few months.In May, advocacy organizations in 31 countries released an open lettertaking stabs atFacebook"s new initiative. They wrote that it "violates the principals of net neutrality, threatening freedom of expression, equality of opportunity, security, privacy, and innovation." The petitioners argued that Internet.org misrepresented itself by only offering limited Internet to developing countries.

In response, Facebook CEO, Mark Zuckerberg posted on Facebook, "If someone can"t afford to pay for connectivity, it is always better to have some access than none at all." Yet protestors are continuingto argue against Facebook"s new platform. To gaincomplete access, users must pay for a specific data plan that the majority can"t afford.People are skeptical of how this creates anatural divide of information -- casting the initiative as a capitalist ploy to further control what information is available to the public.

Also at play is a natural debate about net neutrality. Facebook has been facing complaints that by siding with its partner carriers, it isviolating net neutrality principles. In light of the challenged state of Internet.org, Facebook rebranded to "Free Basics" last week after itopened up the site to developers to help its case inthe net neutrality debate. The new face of Internet.org launched only a few days ago and now includes 60 new service apps available via the mobile Internet portal. Despite Facebook"s rebranded platform last week, the company"s stock was still trading down on Friday.

Facebook urgently needs to show its users that the company is well positioned, secure and reliable. Atthe same time Facebookalso has to show its global community that connectivity for all is a realistic long-term vision that can gain wide adoption.As yesterday"s service outage demonstrated, technology is risky enough. Facebook is now assuming additional risk by entering into larger debates like net neutrality. While Facebook is clearly well intentioned, recent volatility working alongside periodic platform outage is threatening Facebook share price in the near term.

Source: http://www.thestreet.com/story/13305463/1/facebookdown-today-but-what-s-threatening-facebook-tomorrow.html