I don't think they forget about it, any more than they forget about Facebook's pattern of privacy abuses and Mark's non-apologies. If there were an easy-to-use alternative, the people I talk to would love to leave FB instantly; as it is, they're cutting down how much they use it and feeling increasingly resentful. So yes they've posted great numbers in 2011 but from a competitive strategy perspective they're vulnerable.

The people you talk to are not typical. "Most people" aren't aware/bothered by the privacy aspects of Facebook- just look at the number of visible, insecure profiles.

Facebook is not vulnerable from a privacy standpoint- that was the reason everyone said that they were moving to Google+. They didn't.

The people I'm talking to are moms, dads, students, photographers, recent graduates, old friends from high school in rural Pennsylvania, relatives, people at the place I get my hair cut ... okay, admittedly I get my hair cut in San Francisco, and I talk to privacy advocates as well. It's not unanimous by any means, plenty of people still think it's just fine, but if they lose even 5-10% of their usage and/or engagement over the next quarter they'll have a real problem getting the IPO valuation they want.

Inability to use buggy poorly-designed extremely complex software correctly is not evidence that people don't care. I'm a software engineer and security guy and deal well with complexity and even so I haven't been able to figure out how to keep my profile both visible to the people I want to and secure without devoting way more time than I have available. When I tell people that they often respond "oh thank god it's not just me".

It's not just privacy; it's the whole pattern. The constantly-changing UX is a huge deal to a lot of people, and so is the general attitude of "you're the product" and Zuckerberg's non-apologies.

Agreed that Google+ botched their short-term chance but it has decent usage and now has a much better first-user experience so if people react badly to Timeline, there is an alternative. In any case Google+ has clearly shown there's pent-up demand for a Facebook alternative. They'll keep investing in any case, and there are plenty of other options coming along. I talked about this back in September in "In Chaos there is Opportunity" http://www.talesfromthe.net/jon/?p=3163