In the movie The Social Network, Facebook's Mark Zuckerberg is cast as a conniving, sociopathic ''asshole'' who shafts his co-founder and rips off an idea for an online community that later becomes his social networking site.

The real Mark Zuckerberg prefers to be seen as a social visionary. In a new book, The Facebook Effect, he tells his biographer that he wants to make the world a better place by creating an online environment that fosters openness and sharing.

Moviegoers can make up their own mind about the Zuckerberg character when The Social Network opens in Australia later this month. As for the real one, it may take more time to see if the vision thing is for real or just a bunch of weasel words.

One thing's for sure, he's a clever one. Harvard's most celebrated dropout since Bill Gates wants to turn an already popular website into a indispensable platform that becomes a kind of web within the web and which can be integrated into all manner of electronic devices, ranging from mobile phones to TV sets. This will have privacy implications across all facets of our lives, not just when we're in front of a computer.

Building confidence

Yesterday, Facebook took a big step in the right direction by announcing changes designed to boost confidence in the way it handles personal information supplied by its 500 million-plus members.

These acknowledge that not all friends are equal and that you don't have to share every scintilla of information you decide to post with everyone on your extended friends list.

Facebook will also allow users to see and manage how third parties use their "public" information. And it has introduced a way to bundle the entire contents of a user's profile and pop it into a portable compacted file.

Until now, the company had shown contempt for its users' privacy and has had to make regular tactical retreats after overstepping the mark and exposing a reckless disregard for the sanctity of personal information. These misadventures were not mistakes.

They reflect Zuckerberg's personal philosophy of "radical transparency". In January, he told an audience that the concept of privacy was passe, that it was no longer a ''social norm''.

While the advent of the world wide web has helped to diminish the need to hit the privacy panic button as frequently, there is still a gulf between Facebook's concept of the norm and everyone else's.

If Zuckerberg actually believes that transparency "will help create a healthier society", he should lead by example. Facebook should also be detailing the extent of the vast trove of personal metadata that is being compiled on the back of information supplied directly and indirectly by its members.

Spying for free all the time

Too much of the Facebook-flouts-privacy debate, however, has centred on control over the known information that users willingly divulge on their pages and those of their friends.

What has been overlooked is the hoovering up of the digital fingerprints we leave in our online meanderings. It’s what Columbia University law professor Eben Moglen calls the “data dandruff of life”. This can be sorted, aggregated and then linked back, not to a semi-anonymous IP address or a browser ID, put to a real person with a real name.

In a talk given to the Internet Society earlier this year he lobbed a few well aimed brickbats in Zuckerberg’s direction. “The human race has susceptibility to harm but Mr Zuckerberg has attained an unenviable record: he has done more harm to the human race than anybody else his age,” Moglen told his audience.

The professor mocked the way Facebook traded the perceived convenience of its services and some free web storage in return for “spying for free all the time”.

Then there’s the inferred data, or what Moglen calls “the data in the holes between the data we already know if we know enough things”. And we have no way of knowing what has been collected, shared and stashed in places we never knew existed, with companies and organisations we never consented to allow into our lives.

For example, every time you click one of those ubiquitous Facebook "Like" buttons, which have now spread well beyond the borders of Facebook itself. Or when you update your whereabouts using Facebook Places, the company's new geo-location service.

They always knew your name, age and gender. Now they can tell what you like and where you are or where you have been.

And you know what comes next? By knowing where you have been, they'll be able to work out where you are going. Heading home after work? Let's flash up an ad that offers you a discount at your favourite Thai takeaway. Some may see that as a convenience. I find it creepy. The moment my phone informs me that it knows what I'm going to do next is the moment I ditch the phone.

Giant in the making

With an estimated market valuation of $US33 billion and revenues expected to hit around $US1.6 billion this year Facebook is already a giant in the making and counts among its investors, the savviest venture capitalists in the United States and Russia, Hong Kong richest man and Microsoft.

By the privately-held company’s own reckoning, half of all its users visit the site every day and they are spending collectively 23 billion minutes daily updating their status, uploading pictures, playing games and chatting and sharing with friends.

It’s the world’s largest photo-sharing site, the second biggest video viewing web destination and in August was ranked ahead of Google and Yahoo - for the first time - as America’s top online destination.

In Australia, Facebook is similarly dominant. Online ratings agency Nielsen says that over the past 12 months, Facebook’s local traffic grew ten per cent, its reach now extends to almost two-thirds of all Australian web users who each spent an average of 347 minutes on the site.

Regulation can't keep pace

Facebook's advantage over the likes of Google is that it can deliver a more accurate demographic slice of the audience to advertisers. I have no problem with that, as long as I know everything that is being logged under my name and that if I choose not to allow it, there is guarantee that when I choose to remove my data, all of it disappears from Facebook's servers immediately and forever.

But this is Facebook's secret sauce, so it's not likely to share it without a fight. And as it grows, Facebook continues to fly below the radar because it remains in private hands, thereby avoiding the kind of intense regulatory scrutiny that comes with a sharemarket listing.

In any case, legislation in this area can't keep pace with the rate of change. Supervisors and watchdogs either don't have the skills to tackle well-funded adversaries or don't have the brief to keep them honest.

Yesterday's announcement by Facebook will help to change the perception that the company is just a data miner posing as a social network. But that perception won't be put to rest until we see more evidence that Zuckerberg's "radical transparency" vision will apply first to Facebook's own dealings.