Last week, 10 privacy organizations filed a complaint with the Federal Trade Commission. Led by the Electronic Privacy Information Center, the complaint says Facebook’s privacy policies “violate federal consumer protection law.” Inadvertently sharing your list of friends with outside companies, and your profile information with users beyond your circle of friends, are among the issues EPIC disputes.

This all has a familiarly creepy ring to it. Remember when you loaned your high school yearbook to a friend for them to sign? Sometimes you’d get the yearbook back with that person’s well wishes — plus signatures from other folks who’d borrowed your book and signed, too. That wasn’t cool: Your non-pals had read your actual pals’ messages to you. That’s a more simplistic version of what Facebook is doing, or hoping to get you to do: opening up your account to non-pals to read.

Short-Term Gains

Most users view Facebook as a safe place to share information with other users whom they select: a closed network of friends and family who have been invited to see their information. By quietly pushing its users beyond that privacy comfort zones, the company may indeed profit — in the short term.

But if Facebook loses the trust of its users, the mounting scorn will cost the company its reputation. CEO Mark Zuckerberg and Facebook officers are taking advantage of their trusting customers who don’t see their information getting sold off to salivating advertisers. And they’ll ultimately have the same reputation as the kid who signs your yearbook without your permission.

Facebook’s privacy page notes that the site has changed “a lot” in the past five years, and that “people are generally sharing more information, and” — wishful thinking, perhaps — “they are becoming more comfortable sharing more information.” The recent privacy changes, it says, are meant to “address these shifting social norms” — although some critics suggest that the real goal here is to better compete with Twitter, where most users open their updates to all.

Legal Challenges

Whatever their motives, the company clearly wants users to share more information with “everyone,” because such information has value to potential advertisers. DailyFinance’s Tom Johansmeyer wrote that it was only a matter of time until someone decided to challenge Facebook legally. A Facebook spokesman told the Wall Street Journal that it “discussed the privacy program with many regulators, including the FTC, prior to launch and expect[ed] to continue to work with them in the future.”

What would be most useful and honest, though, would be for Facebook to bonk users over the head with the message that their updates are being made public. That may not best serve the company’s needs, but users should not be duped into opening up their information. Because while getting 350 million users to share their personal information publicly may attract advertisers, it erodes the trust of those who use Facebook and make it an increasingly powerful network.

But the decision could open the door to a litany of problems. Among the potential issues: Who has the right to determine if a site is memorialized? What if the husband memorializes his wife on Facebook but the wife’s parents think that such a move is in poor taste — can the page then be taken down?

Facebook’s Chimene Stewart said in an email, “We defer to the wishes of the family member who requested the account be memorialized.” That means as long as one person wants it, Facebook will memorialize the deceased person’s page. Down the road, I wouldn’t be surprised if that leads to lawsuits to have a memorialized page removed.

There could be other problems as well. Facebook’s Max Kelly, a close friend of the Facebook employee who was killed, explained in a note to users on October 26 that “When an account is memorialized, we also set privacy so that only confirmed friends can see the profile or locate it in search.”

Confirmed friends means those who were Facebook friends with the Facebook user before he died. Facebook says it will prevent anyone from logging onto a deceased person’s account after the user’s death but it will allow friends and family to leave posts on the profile wall in remembrance.

But what happens if, for example, a Chicago firefighter dies after saving lives and folks want to show their respects by posting on the firefighter’s Facebook page? Only those linked to him before his death could leave a note. In the future, will people leave instructions in their wills about whether they wish to be remembered on Facebook?

Another problem the company faces is advertising. Currently, besides memories of the deceased’s life, the memorial pages also contain advertisements. That could easily be considered in poor taste. But what if Facebook were to yank the ads on those pages? Then the company would take a financial hit and would be left with memorial pages that generate little to no revenue.

Perhaps Facebook would do better to stick with the living. “There are already sites that memorialize people,” says Andrew Hazen, founder and CEO of Prime Visibility, which helps boost online exposure for individuals or companies. “What’s intriguing to me is that Facebook is memorializing what people have built themselves. But who will contact Facebook? People will die and Facebook will have no idea, because it won’t be a priority to contact Facebook. God forbid my spouse passes on, the last thing I’m doing is notifying Facebook that she is no longer alive. I suspect this won’t be policed or executed very well.”

Facebook, for its part, believes that providing the memorial pages of its users outweighs any potential problems. But if the company ends up pulling ads and dealing with lawsuits from irate relatives, it may soon be lamenting not the death of its users, but the demise of its memorial pages.

How about President Barack Obama? Will he be less likely to speak his mind in public after ABC News reporters used Twitter to spread his off-the-record comment about Kanye West acting like a “jackass” on MTV’s video music awards show? TMZ.com, owned by DailyFinance’s parent company AOL, then published audio and video of those comments. Will such incidents cause celebrities and non-celebrities to be more on guard for fear that their every move may be made public via social media?

Twitter recently redesigned its homepage to show off its real-time search, while Google is working on caffeine, a souped up version of its search engine, which is sporting faster and more relevant search results. Facebook may soon be able to top both products from Google and Twitter, if they successfully blend FriendFeed’s real-time search features.

A core reason Facebook bought FriendFeed is for its talent, including ex-Google (GOOG) engineers, and its ability to help with real-time search. Many, including blogger and FriendFeed advocate Robert Scoble, would argue that FriendFeed does Twitter better than Twitter. Moreover, they bought it for a fraction of what they could have paid for Twitter. All Things Digital’s Kara Swisher wrote that Facebook paid $50 million for Mountain View, California-based FriendFeed and its 12 employees.

“Some might think FriendFeed was a second choice acquisition for Facebook, since the company couldn’t land Twitter last year,” wrote Mashable’s Josh Catone. “But FriendFeed was probably the smarter choice.” Facebook has more than 250 million users. Match that with FriendFeed’s technology and engineers, who are now senior members of the Facebook team, and Twitter has cause to be nervous about a stronger rival in Facebook. The purchase comes as Facebook has been pushing its users to open up their updates to better emulate what Twitter is already doing.

Google has Microsoft (MSFT) and its Bing search engine to content with, plus Twitter’s real-time search engine. Add Facebook to the list of search-wannabes. Search is where the money is online, Google has shown, and the bees are gathering to feast upon the search nest. Searching for what’s next in search? Facebook will soon be part of the Web’s race for a superior real-time search experience.

Other inner teen-voice reactions: So what? Who cares? Saying teens don’t Twitter is like like saying college students don’t have a career or, ‘Gasp, study finds that few under the age of 50 are AARP members.’ It’s a moot point. Teens will use Twitter when they have a reason to use it. Until then, they have MySpace, Facebook and AIM to keep connected with the online world.

Almost all Twitter users have a reason to be there, be it big or small. Because I write about Twitter, folks ask me whether they should join. I tell them, sure, if you have something to say or sell. Most folks on Twitter, in my estimation, are there to promote something. It’s either a product, a service, or themselves.

I’m not being crass. In life, whether we’re cognizant of it or not, we’re always selling ourselves. What comes out of our mouths, put on paper, how we dress, the car we drive, the job we have, the house we live in, all conveys a message about who we are. While not a pleasant thought for many, it’s true.

For those of you who say, I’m not selling myself and I don’t care what people think . . . I get that. That doesn’t mean people aren’t watching. People are assessing, and buying or selling you, based on judgments filtered through their vision of the world. Twitter simply provides an online outlet to what folks are already doing offline.

In my experience, most folks I’ve encountered on Twitter are promoting their product, service, writing or philosophy. Most Tweets can be traced to those four categories. The latter two usually means the person is a published author or wishes to become one, while the first two mean the person hopes you will like them and their entertaining or informative Tweets enough to buy whatever it is they’re selling.

One reason I joined Twitter was to let others there know what I or my colleagues at DailyFinance have written. Otherwise, I use the micro-blogging service to point out articles that other journalists — who I don’t know or work with — are writing. Twitter has also proved useful in making connections and staying in touch with folks I’ve met through Twitter or know professionally. I use Facebook, or send e-mails, to stay in touch with family and longtime pals. I’d argue that most of what many teens post on Facebook would not translate well to Twitter.

The Nielsen study underlines America’s obsession with youth. Since the 1960s, when advertisers came up with the clever (sarcasm) and successful idea of marketing cigarettes to kids, as a culture, we have gravitated toward giving great importance to what teens think is hot, and who or what is the next big thing.

In this case, the next big thing in 2009 turned out to be Twitter. Wait, teens don’t like it? Kids don’t use it? How then has Twitter has become popular? This goes against what has been deemed sacred by marketers and advertisers in the past 50 years. Twitter not being cool with teens is the conclusion of the study by Nielsen’s David Martin and Sue MacDonaold. The translation is, if kids aren’t bonkers about it, it’s doomed to fail.

To be clear: love kids! I have a 2-year-old and another on the way. I have eight nieces and nephews under the age of 25 and we all get along. I’m no curmudgeon. That said, I’m not here to wag a finger and say it’s a shame we don’t value age and wisdom as much as other cultures or the U.S.A. did prior to the 1960s. I’m simply saying how silly it is that we are weighing the opinions of those who have been on earth less than 20 years so heavily.

For example, take Britney Spears, who is 26. How many years ago did she jump the shark? She’s 26 and some marketers might argue, passe. Paris Hilton is 28. Her sex tape is soooo 2004. Julia Roberts and I were born in the same year. She’s 41. ‘Pretty Woman’ came out in 1990, when she was 23. How much more influential is she now than she was 18 years ago? If measured by influence among teens or in the world of pop culture, you might get a negative number on a scale of one to 10.

Teens who don’t use Twitter will use it once they join the workforce or graduate college. They’ll have a reason to use it. They’ll start meeting people and want to keep in touch in a way that doesn’t involve drunk frat party pictures seen on their Facebook or MySpace pages.

So while marketers and, maybe the folks at Twitter, may be alarmed that teens aren’t frantically knocking out 140 Tweets on their iPhones on their way to the movies, I say, give ‘em a few years. Soon they’ll be buying diapers, paying their taxes and credit card bills and Twittering along with the rest of us geriatrics.