“It’s kind of like they’re selling out,” says Florida State sophomore Michael Rubano, administrator “Students Against Facebook Being Public,” one of several recently-created Facebook groups that protest the expansion. “The exclusivity that it used to have is completely gone.”

Dubbed “Expanded Registration,” the new feature–which will allow anyone with a valid e-mail address to join one of about 500 regional networks, connecting them with others in their geographic area, but not to school networks–has already generated user outcry, and it’s uncertain whether the change will help or hurt the company made famous for being a hip, insider, college-only community.

Facebook denies speculation that the expansion is designed to help the site keep pace with rival, less restrictive social networking sites like MySpace, which in August had more than 55 million unique visitors to its site (compared with 14.7 million to Facebook; not everyone who visits is a member) according to comScore Media Metrix. “We really don’t view MySpace as a competitor,” says Melanie Deitch, Facebook’s director of marketing. “We’re really trying to do fundamentally different things. We want to grow, but over the past two and a half years, we could have grown a lot quicker.” Still, keeping that insider-y feel that made Facebook so popular will be a tough challenge. After all, is it really cool if everyone can be a member? “It’s kind of a brand identity shift and I think it’s going to be tricky for them,” says Greg Sterling, founder of Sterling Market Intelligence, an Oakland-based firm that researches Internet marketing trends.

Tricky indeed, especially since Facebook members can be a vocal bunch, something company founder Mark Zuckerberg found out last week, when the site erupted over the addition of “News Feed,” a feature which automatically sends a user updates anytime an online friend changes a detail of his or her online profile. In response to this, hundreds of thousands of users joined Facebook groups denouncing the News Feed as an invasion of privacy. “We’re all a little confused over the changes being made,” says Arturo Menchaca, a Northwestern alum who last week started the anti-News-Feed group, “Dear Zuckerberg, I Disapprove of Your Changes to Facebook, Signed EVERYONE.” “It just seems like they’re really trying too hard to corner every single Internet community market.”

In response to the uproar, Facebook issued a mea culpa late last week (but did not revoke the feature). Late Monday night, site administrators posted a review list on all users’ home pages (which made brief mention of the coming expansion) of the site’s privacy controls to remind users how they can limit which associates can view certain aspects of their online profiles.

Still, analysts say the barrage of changes has shaken up Facebook’s base, though it is too soon to tell what the lasting effects will be. “It was a bad PR move for them, but it’s just very hard to predict what’s going to happen,” Sterling says. “Facebook is well established and it’s not going to go away overnight. But it is vulnerable.”