Parker said Facebook is on the right track with the introduction of recent capabilities for segmenting friends into smaller groups and for managing the content flow, but it needs to do more.

Asked about his involvement as a backer, adviser and board member at Spotify, Parker said the music streaming service represents for him a chance to finish what he started with Napster, the pioneering music-sharing service that record labels clobbered with litigation.

Spotify has started securing licensing deals from the major labels and from hundreds of independent labels, and may in the future introduce a peer-to-peer sharing model in which users can upload their own music to the service, he said.

For example, people could upload live concert recordings they've made, but if and when that happens there will be a legal model with the labels that allows for this to happen, he said.

Parker declined to comment about his new venture, although he confirmed it will be called Airtime, and he also shot down reports that he and Facebook CEO Mark Zuckerberg recently got into a heated argument over Spotify.