If you had to boil it down to one sentence, you could say that Facebook’s platform never reached its potential because of the company’s complicated and mercurial relationship with developers. Over the years, Facebook has exhibited a pattern of capriciousness that has eroded developers’ faith in the idea that the platform could be a stable environment on which to build a business. Whether it be through too-sweeping rule changes that penalized trustworthy apps for the sins of a few bad actors, or disregard for expectations about what it would or wouldn’t build itself, Facebook created a situation that, for many, proved untenable.

Whatever it was, Facebook systematically burned the trust and goodwill of the startup community.

Let's hope that Facebook never needs their help again.

or let us all move onto something better

In many ways we HAVE moved onto something better.

Smartphones, tablets, and other mobile devices.

The smoking gun:

John Battelle: “Would you be willing to state that people who are building high-quality, high-perfoming businesses on your platform can continue to do so without fear that at some point you’re going to take advantage of the platform and put them out of business or build a business against them?”

Mark Zuckerberg: “Well, I don’t think it would be very good for us if we did that. But at the same time, I think it’s very clear that we’re a company that’s — the product is evolving very quickly.”

– Web 2.0 Summit, San Francisco, October 17, 2007

If you had to boil it down to one sentence, you could say that Facebook’s platform never reached its potential because of the company’s complicated and mercurial relationship with developers. Over the years, Facebook has exhibited a pattern of capriciousness that has eroded developers’ faith in the idea that the platform could be a stable environment on which to build a business. Whether it be through too-sweeping rule changes that penalized trustworthy apps for the sins of a few bad actors, or disregard for expectations about what it would or wouldn’t build itself, Facebook created a situation that, for many, proved untenable.

It was supposed to be an equitable relationship. “We’ve designed Facebook Platform so that applications from third-party developers are on a level playing field with applications built by Facebook,” the company said in an FAQ document circulated at the time of Platform’s launch. “Ultimately, our users will decide which applications they find most useful, and it is these applications that will become the most popular.”

Why developers will never trust Facebook again:

Towards the end of 2008, word got out that Facebook was developing its own music player and artist pages that it would incorporate into the native user experience, something it had led iLike to believe it would never do. TechCrunch’s then-editor Michael Arrington zeroed in on the decision’s significance. “The outcome of the battle will affect far more than Facebook’s music strategy,” Arrington wrote. “[I]t will also signal if the company is at all serious about being a platform/operating system for the social graph, or if they just want to own everything of value on the Facebook platform”

Since 2009, Facebook has gone through two more waves of changes to its platform, reinforcing its reputation for volatility. In 2010, it irked its most important partner, Zynga, maker of popular social games such as FarmVille and Words With Friends, by trying to force it to adopt Facebook Credits and accept a 30-cents-on-the-dollar tax in the process. Zynga, which in 2011 would account for 12 percent of Facebook’s revenue, didn’t take kindly to the suggestion. While they still work together, Facebook’s relationship with Zynga has never fully recovered. The struggling gaming company has since switched its focus to mobile, which it had been slow to pick up on.

Last year, Facebook altered how it displayed stories from news organizations’ “social readers,” leaving publications like the Guardian and the Washington Post with significantly less Facebook traffic than they had previously enjoyed — quite a blow for the Post, especially considering that its owner, Don Graham, sits on Facebook’s board and was one of Zuckerberg’s first mentors. Once trumpeted as the centerpieces to Zuckerberg’s vision of “frictionless sharing,” the news readers suddenly found themselves in a ditch. Fed up, the Guardian ended up killing off its reader last December.

The volatility continues to the present day. After Facebook tweaked its news feed algorithms, video-sharing apps SocialCam and Viddy saw their user numbers fall off a cliff. Viddy sunk from a peak of 35 million monthly users last year to just half a million earlier this year, according to Appdata.com. As Reuters has pointed out, LinkedIn competitor BranchOut plummeted from a high of 39 million monthly users to just 100,000 after Facebook throttled the dodgy in-stream “notifications” the company relied on to attract users.

Meanwhile, Facebook has also played tough with potential competitors in the messaging space, namely Path, Voxer, and MessageMe, all of which have had their access to the “find friends on Facebook” API revoked. In the same vein, Facebook also blocked Vintage Camera, an Instagram competitor; along with Vine, an Instagram Video competitor; and Russian search engineYandex, whose social search product competes with Facebook’s own Graph Search.

The company’s justification is that such apps exploit its platform without feeding useful data back into it. The apps merely attempt to replace core things that Facebook does, rather than extend them, the company says. That explanation, however, has done little to cool simmering tensions between Facebook and developers.

The cumulative effect of all these changes over the years is that developers have learned to be suspicious of the platform. Ben Brown, a veteran developer who sold a dating site to CNET in 2005 and now runs an Austin-based digital publishing company called XOXCO, says building for Facebook Platform is a “terrible idea.”

Facebook's behavior was completely wrong:

Trying to craft an effective solution to the spamming of the news feed and abuse of the notifications system by apps like RockYou and Slide, Facebook took a sledgehammer to its API access. Instead of singling out individual bad actors and banning them from the platform, it instead severely restrictedaccess to notifications for everyone, and eventually cut them off completely, giving developers no way to communicate directly with their users.

Facebook instituted a host of other changes too. It stopped developers from installing their apps on users’ profile pages, clamped down on promotions, and shut down third-party ad networks.

The motivation for these changes was pure: Facebook wanted to protect its user experience. But it was making up the rules as it went along. In attempting to mitigate the damage caused by a few, it ended up punishing the many. The upshot was that Facebook compromised the openness of its platform.

Consumer apps don't need Facebook anymore:

“Facebook occupies an interesting space in mobile. We’re not an operating system, but we’re not just an app either.”

– Mark Zuckerberg, Wired, April 4, 2013

The hottest consumer apps around today didn’t need Facebook to get where they are. Snapchat, which delivers 200 million self-destructing images a day and is reportedly valued at $800 million, evaded Facebook entirely. Zuckerberg’s company later built a Snapchat clone, Poke, which has been tumbling down the App Store rankings since the day it was released. Video-app Vine has hitched itself to Twitter’s locomotive and is doing welldespite being cut from Facebook’s friend-finding feature.

Same goes for MessageMe, which now claims more than 5 million users. WhatsApp, which has more than 250 million users, goes straight to the address book for its users. Line, WeChat, KakaoTalk, and Kik are actively competing with Facebook, building their own social graphs and app platforms. Tencent’s WeChat, it’s worth pointing out, is dominant in the world’s largest Internet market, China, which is closed to Facebook. Along with Line and KakaoTalk, WeChat is also aggressively competing with Facebook for new users in fast-growing Southeast Asia.

That state of affairs raises questions about how relevant Facebook’s platform, built for the desktop Web era, is today. Khosla Ventures’ Keith Rabois succinctly sums up the platform’s fading influence: “I haven’t heard the words ‘Facebook Platform’ from someone in a year.”

Why should anyone trust Facebook?

The success of both Connect and payments will ultimately be contingent on user trust, which is something Facebook still struggles with. While Connect is almost ubiquitous on socially-oriented apps, most will also offer an alternative sign-in method, such as email or Twitter, because of consumer fears that a connection via Facebook will end up spamming their friends. Anyone who has used Spotify is familiar with shared tracks popping up uninvited on their timelines. And anAP-CNBC poll published on the eve of Facebook’s IPO found that 54 percent of respondents didn’t trust the platform enough to conduct financial transactions through it.

That lack of trust is a serious problem. As Facebook chief operating officer Sheryl Sandberg said at the recent D11 conference, “Trust is one of the most important things we have to get right.” The implication was that Facebook hasn’t yet.

I have two questions -- 1, what can Twitter learn from this, or will they suffer the same fate? 2, I've always felt FB needed a leadership shakeup - or management shakeup, etc. This article makes it seem like they need their Eric Schmidt.

Twitter never established a pattern of distrust with users the way Facebook did with its ever shifting privacy policy and its ridiculously resetting privacy settings on a regular basis.

Twitter did establish itself as incompetent at managing a developer ecosystem -- to this day we have OAuth availability failures -- but I'd rather deal with Dumb but Good than Smart but Evil.

Facebook's stock structure makes it impossible for anyone but Zuck to decide leadership changes.

It is very much Facebook's Achilles Heel that his formal education stopped when he was a teenager, and his life experience has been similarly limited by his runaway success.

Who are examples of some executives that Zuck should recruit to reshuffle his management team?

Actually, I'm at a loss. Facebook isn't rich enough to buy eBay, Yahoo, LinkedIn, or Twitter.