SINGAPORE (Apr 2): In software as on the internet, the oldest battles have been between the “walled garden” and “open platform” approach. Apple’s late co-founder Steve Jobs, for example, was a big proponent of the “walled garden”. Eventually, however, Microsoft ran away with the PC business because it was willing to license its operating software whereas Apple was not.

In the social network space, pioneer Myspace was a walled garden that allowed Facebook to become a truly global network when it rolled out an open ecosystem approach. To outdo Myspace, Facebook in 2007 allowed outside developers to access data such as friend lists, locations, photos and all sorts of other information without letting users know. Although Facebook began putting up walls again two years ago, deciding that a walled garden was better because it wanted to use all the data itself, its open approach came back to haunt it two weeks ago as stories emerged on how its data had been abused.

Facebook stock is now down 24% since Feb 1, wiping out nearly US$150 billion ($196.3 billion) in market value. Is the Facebook crisis a “headline risk” that might just dominate the news cycle for a few weeks before something else takes over or is it a permanent game changer? Is it a head fake or a tipping point for Big Tech?

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