
Facebook has lost $100B in 10 days and now advertisers are pulling out - shahocean
http://business.financialpost.com/technology/u-s-ftc-investigating-facebooks-privacy-practices
======
nugi
This is the beginning of the Big Churn. Less top talent will want to be
associated with facebook. Already even a few more privacy clueless friends
family members are deleting their accounts. Adverts were always so low yeild,
and fb pages 'because we need one'. Now that is all changing due to
perception. The FTC, stocks falling, are further indicatuons of falling trust.
And all business is built on trust.

~~~
fossuser
Oh please - the overreaction from this is ridiculous.

I'm buying FB call options.

Facebook's network effect is extremely strong - this is also not even
including their other assets (Instagram, Whatsapp, Oculus).

The API access was in violation of terms of service and the ability to access
data through friends via the FB graph has already been closed.

~~~
chrischen
Yes, Facebook's current network is fairly strong, but you shouldn't look to
where the masses currently are, you should look to where the trendsetters, the
young, and the people in the know—where they are. These people are ahead of
the curve, and the signs they are emitting is that Facebook is not serving
their interests and needs. Young people don't want to use facebook because it
forces you to interact with everyone, including parents and people out of your
circle. Privacy conscious people and many at the forefront of technology all
either personally avoid and limit facebook usage or keep their children away
from it (if they aren't already disinterested in the first place). Yes
Facebook allows you to "fix" these issues with enough configurations, but then
why would a new user go through the hassle of all that when they could just
install snapchat or instagram (yes I know facebook owns this, but it's not
facebook).

So unless there's a fundamental shift in its business model and allure, its
trajectory will be doomed. It doesn't mean Facebook the company will fail, but
it does mean that the Facebook product—what it is in its current form—has a
finite shelf life.

~~~
wizardforhire
I've been putting off posting this for months because when I write it, it
seems grandiose but it's been my life and it's too ridiculous not to share.

I was born in 80 so that dates me. I've worked in music for the last 20 years
and I've worked with over 60 bands most of whom are very successful now.
However that number is misleading because I've toured with hundreds of bands
if you count the openers and headliners over the years. It's stupid really
when I look back on it. Once when I was 25 I used my network to start a music
festival with no money that's been going on for the last 10 years and has
never had less than 50k people attend. Anyways long story short most people
don't understand marketing. But when you're touring you're living it. I
remember when the words taste maker started getting thrown around. I remember
when gorilla marketing became a thing... Because the marketing people would
all be coming to our shows and our parties and sponsoring us. All of this to
say that

We were early adopters of Friendster, when they killed the bulletin board my
friends and I moved to MySpace, when MySpace got over crowded we moved to
Facebook, when our families friends got on Facebook we left for Twitter and
reddit, the less public of us left Twitter almost immediately but our pr teams
stayed, when Obama won in 08 we left reddit. Many of us went to snapchat and
we all use Instagram even though we hate it. There was a minor period when we
thought google + was going to serve us but that lasted exactly one day.

What we desperately want is a decentralized encrypted locally hosted
application that has exactly one killer simple feature. A bulletin board to
post events. That's it. A simple way to keep in touch with each other and
local ownership of our photos and videos. Sure to reduce bandwidth we'd be
fine with our friends or fans hosting encrypted files on their devices but
that's as far as they go. Do that, slap an easy to use interface on it, don't
have advertising call it something literal like friends torrent or something
and we'll never have another Facebook. If you want to monotize it... Give it a
market place. But if you take anything from this rant it should be this, your
tastemakers aren't faceless nameless statistics they're real people and
they're friends with each other. We know who we are and we are and have been
paying attention.

Also fuck Facebook freedom isn't free

~~~
michaelchisari
_Do that, slap an easy to use interface on it_

What you're asking for is much more difficult than you realize.

~~~
wizardforhire
I know (with lots love)! That's why I haven't built it. It's also why I don't
think it has been built yet and why in my frustration this evening I sort of
let loose.

------
AdamN
What's interesting for me is that I finally deleted my account. I never used
it anyway but now I feel empowered to say "I don't have an FB account" and
that's ok.

I think this is a sea change - there will never again be this dominant of a
social network imho. From now on the space will be fractured into niches
(AngelList, LinkedIn, NextDoor, etc...).

~~~
pseudometa
I did the same. While I used to use my account regularly 5+ years ago, my feed
was just full of stupid updates. People posting food pics, family commenting
on news, and old viral videos, and lots and lots of ads. So, hey, I deleted my
account. While Facebook isn't loosing any revenue from me, it certainly didn't
ever attract me back into the active user status. Good riddance.

~~~
mieseratte
A few months back I had tried doing the "Hide this Page" game hoping to
reclaim my feed. This turned into a Sisyphean task that makes Inbox Zero look
fun. As it turns out, there are also a number of pages[0] that you simply
cannot hide or otherwise unfollow.

I happened to "delete" my profile a week before this shit storm blew up and
thankfully someone pointed out the Deactivate vs. Delete dark pattern and I
quickly fixed that situation.

It's a weird world when the Smut Peddlers have some sound advice on living.

[0] - I didn't keep a list, but I recall one called "Wittitudes" or something
along those lines simply lacked the "Hide" option, and all attempts at
blocking it failed.

------
jarjoura
It's too easy for some of you to get excited about one giant corporation
taking a rather public beating. The anti-facebook tribe is strong in the
Hacker News community.

Plus, what SV company wasn't a free-for-all of user data in 2012-2013? I don't
know if any of you remember the Path app's lawsuit that triggered Apple's
lockdown of API permissions. Apple, who suddenly got religion about privacy,
but they too learned from their mistakes.

Anyway, I'm not here to argue in favor of FB, but the stock going down is
pretty self perpetuated right now. It's algorithmically triggered in response
to bad news in the press, that then generates more bad press like this and so
on. I'm not sure where the bottom will be here, but I'm pretty sure it'll
reverse course soon enough.

~~~
domevent
_Anyway, I 'm not here to argue in favor of FB_

You’re just doing a really great impression of someone who is? My initial
reaction was an unrealistic belief that you and others singing a similar tune
work for FB, but I doubt that. I think it’s a very rational fear that FB is
the first domino to fall, possibly along with Uber. Fear and self-interest,
and the simple desire not to see your industry facing a prolonged public
backlash ending in regulation makes more sense as a motive.

Is that about right?

~~~
jarjoura
As it's impossible for me to convince anyone in this thread of anything on
this topic, I'm just freely making some points. People have already picked a
side to stand on and the line has been drawn. Case in point, you've already
gotten your pitchfork out.

~~~
domevent
You didn’t really respond to anything I said, just complained that people
aren’t agreeing with you and some ad hom that those people are mob-like.

------
jlmorton
In other words, FB has done somewhat worse than the NASDAQ, and about the same
as GOOG over the same time period.

Best not to take broad market movements and try to ascribe specific market
expectations to individual companies.

~~~
tylermenezes
What are you talking about? The NASDAQ was down 4% since last Friday. Facebook
was down almost 20% from Friday this morning...

~~~
jlmorton
Sorry, but what are you talking about? Facebook closed on Thursday at $165. It
closed on Friday at $160. FB was up by half a percent today, on Monday.

[https://finance.yahoo.com/quote/FB?p=FB](https://finance.yahoo.com/quote/FB?p=FB)

~~~
JumpCrisscross
> _Facebook closed on Thursday at $165. It closed on Friday at $160_

16 March open to 26 March close, Facebook lost 13% of its value [1]. The same
statistic for the S&P 500 is 3.4%. This time horizon makes more sense than
yours because it matches the first revelations of Cambridge Analytica's use of
Facebook's data [3].

[1]
[https://finance.yahoo.com/quote/FB/history?p=FB](https://finance.yahoo.com/quote/FB/history?p=FB)

[2]
[https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC](https://finance.yahoo.com/quote/%5EGSPC/history?p=%5EGSPC)

[3] [https://www.nytimes.com/2018/03/17/us/politics/cambridge-
ana...](https://www.nytimes.com/2018/03/17/us/politics/cambridge-analytica-
russia.html)

------
otalp
I fail to see how this will seriously damage them. They already own the two
biggest alternatives to facebook - Instagram for pictures and WhatsApp for
communication. More people are using their services than ever before and more
people are getting access to the internet in developing countries.

~~~
chrischen
People in US don't really use Whatsapp.

iOS users do use iMessage and Android use Hangouts.

~~~
phinnaeus
Do android users actually uses Hangouts? I have a couple of friends on it but
my understanding is that Android users (like myself) just stick with standard
SMS/MMS in the US. Patiently waiting for Universal RCS to take off...

~~~
saym
I know this is just anecdotal, but my friends and I do heavily use Hangouts.

It doesn't have enough functionality on its own, but I've augmented our
experience with a chatbot powered by
[https://github.com/hangoutsbot/hangoutsbot](https://github.com/hangoutsbot/hangoutsbot).

Obviously I don't think that this experience is typical, not everyone is a
programmer or has a server on which to run it.

------
tinyhouse
I have no idea where the FB stock is going. I don't think the company is in
trouble, but likely to continue shifting focus. The good thing for them is
that their products complement each other pretty well.

FB the product has been changing quite a bit. Many people don't use it anymore
to see what their "friends" are doing. They use it to follow certain groups of
interest. For me it's becoming something between Reddit, Meetup, and
Craigslist. (I don't check my FB often)

Instagram (which I don't use) is still strong in what FB used to be, but the
friendship model is more lax like in Twitter. The demographics also complement
FB well.

WhatsApp (which I use daily for everything) is huge all over the world. It's
also catching up in the US. Besides the 1on1 communication, it's also big on
groups. But the WahtsApp groups are quite different from the FB groups. They
tend to be smaller and more personal. It's not really by design, it's mainly
because it's connected to people's phones. They just need to figure out how to
monetize it. The potential is huge. (but first please improve the calling
quality, it's so bad)

WhatsApp is a great product but among the three the most easily replaceable.
But that's not going to happen any time soon. FB were smart keeping it
independent and separate (many users don't even know they own it). One thing I
really dislike about Google is that they merge everything under one umbrella.

------
AdamN
The bigger problem is recruiting. How many offers will be declined in favor of
Google, startups, etc...

~~~
otalp
It's not like Google is a privacy haven for people who care about that sort of
thing.

~~~
mieseratte
> It's not like Google is a privacy haven for people who care about that sort
> of thing.

Google, Facebook, and Amazon are all on my shit-list. Any company that
harnesses hapless users as a product can rot in hell.

~~~
drewmol
I'm a bit worried they will soon enough go the route of AT&T, Comcast, the
Telco mafia, Airlines, etc. and embrace their suck, then just lobby for
survival.

[https://www.fastcompany.com/40520529/big-tech-lobbying-
spree...](https://www.fastcompany.com/40520529/big-tech-lobbying-spree-heres-
how-much-apple-amazon-and-others-gave-d-c-in-2017)

------
kin
I genuinely believe that advertisers are only pulling out because it's the PR
thing to do. There are many other companies that would love to take advantage
of a less competitive bid for Facebook ad space and I have no doubt they will
be taking advantage of it and will continue to spend boats of money on
Facebook.

~~~
anaptdemise
Two of the largest advertisers don’t think Facebook ads are effective. The
latest, P&G, specifically call out how narrow targeting is ineffective.

> After cutting back on certain digital ads, “we didn’t see a reduction in the
> growth rate,” said Mr. Moeller during the call. “What that tells me is that
> the spending we cut was largely ineffective.”

[https://www.wsj.com/articles/SB10001424052702304192704577406...](https://www.wsj.com/articles/SB10001424052702304192704577406394017764460)

[https://www.wsj.com/articles/p-g-to-scale-back-targeted-
face...](https://www.wsj.com/articles/p-g-to-scale-back-targeted-facebook-
ads-1470760949)

~~~
MarkMc
I wonder why Facebook doesn't make deals with supermarkets to collect data on
every single purchase. There's no doubt that Facebook advertising would be far
more effective if it knew when John Smith last purchased toothpaste.

------
nickpsecurity
Facebook didnt loose $100B in 10 days: it's market value dropped in response
to bad news. Stocks go up and down all the time on companies that remain
around a long time. It's still making piles of money. Its users have a huge,
switching cost to block a transition, too.

------
reaperducer
Perhaps some good will come out of all this.

Maybe in the future, when some PHB asks development to add a questionable data
gathering function to a platform they can say, "Remember Facebook?"

~~~
jlmorton
Facebook runs a messaging service with ~1.2 billion monthly active users. One
of the core features of the product is to integrate with other contacts on
your phone, and you have to explicitly enable this feature, agreeing to
"ongoing upload" of your "text and call history".

Apple runs a messaging service called iMessage. It logs all of your call
metadata, SMS history, etc. There is no opt-in, it's just default behavior.
Apple also runs iCloud. All of your data is sent there, too, including
complete conversations.

Can someone for the life of me explain to me what makes Facebook the villain
here? Apple does exactly the same thing.

Facebook has never sold this data. There is no evidence they've even used the
data for anything except its explicitly-stated purpose.

~~~
symlinkk
> you have to explicitly enable this feature, agreeing to "ongoing upload" of
> your "text and call history"

I don't remember this being explicitly asked of me in any obvious way. And
even if it was, I would have assumed they only needed that permission to get a
list of contacts on my phone, and that the rest of it would be unused.

> Apple runs a messaging service called iMessage

Yes, and it's all encrypted and none of it is sent to third-party advertisers
or creepy voter manipulation firms.

> Facebook has never sold this data. There is no evidence they've even used
> the data for anything except its explicitly-stated purpose.

[https://www.nytimes.com/2018/03/19/technology/facebook-
cambr...](https://www.nytimes.com/2018/03/19/technology/facebook-cambridge-
analytica-explained.html)

~~~
jlmorton
> I don't remember this being explicitly asked of me in any obvious way.

Maybe you didn't. The Facebook app does not collect this data. It's only
Facebook Messenger or Facebook Lite. Here is a screenshot of the permission
request: [https://fbnewsroomus.files.wordpress.com/2018/03/opt-
in_scre...](https://fbnewsroomus.files.wordpress.com/2018/03/opt-
in_screen.png?w=1152&h=2048)

> Yes, and it's all encrypted and none of it is sent to third-party
> advertisers or creepy voter manipulation firms.

Yes, and this is all encrypted and none of it has ever been sold, or shared
with any other third parties. So what is the difference again?

> [https://www.nytimes.com/2018/03/19/technology/facebook-
> cambr...](https://www.nytimes.com/2018/03/19/technology/facebook-cambr..).

This is a completely different issue, and unrelated to the thread.

------
stickdogg
I hope they continue to lose money. That's a pretty negative feeling to have
towards a business for me too. However, they started harvesting text and call
info back in 2006; that is about the time I first started looking into
anything technology related. I thought fb was terrific as it grew and helped
enable more connectivity. Now that it has been shown to be true tho, the
invasion of privacy is absolutely ludicrous.

------
f2n
Good, I hope we see a sleeping giants-style shaming of advertisers who
financially support Facebook

~~~
TAForObvReasons
Ironically many of the sleeping giants that could tip the scales were already
pulling out. Case in point: Proctor and Gamble (2016)
[https://www.wsj.com/articles/p-g-to-scale-back-targeted-
face...](https://www.wsj.com/articles/p-g-to-scale-back-targeted-facebook-
ads-1470760949)

~~~
majormajor
Extra-ironically, look at the opening line there:

> Procter & Gamble Co. PG 0.66% , the biggest advertising spender in the
> world, will move away from ads on Facebook that target specific consumers,
> concluding that the practice has limited effectiveness.

More-and-more-specialized online display advertising rarely delivers as (heh)
advertised on any platform.

But on the other hand, the bit you leave out includes both that they weren't
cutting their FB budget, and that they'd found some areas where it works
better:

> Mr. Pritchard said P&G won’t cut back on Facebook spending and will employ
> targeted ads where it makes sense, such as pitching diapers to expectant
> mothers.

So the real question is: were these political campaigns the useless sort of
micro-targeting, or the effective kind?

~~~
TAForObvReasons
P&G actually cut their digital ad spend :
[http://www.adweek.com/digital/procter-gamble-
cut-140-million...](http://www.adweek.com/digital/procter-gamble-
cut-140-million-in-digital-ad-spending-because-of-brand-safety-concerns/)

> “Digital ad spending was lower versus a high base period and due to current
> period choices to temporarily restrict spending in digital forums where our
> ads were not being placed according to our standards and specifications,”
> the company said in its earnings

I suspect that FB targeted ads are not as useful for larger companies (who are
generally advertising for awareness) compared to smaller or niche companies
(where the target audience may be well defined).

------
matt_s
Could this spark a small tech bubble burst?

Will non-tech people be fed up with their data being abused by tech/ad
companies? If this trend goes viral (ironic, eh?) it could mean less ad money.
Advertising has had it really good compared to older days of TV and radio with
targeted online communities and data about them.

Maybe this just sparks less VC investment towards freemium products?

------
cJ0th
This looks like big news but I think it is merely a small correction of its
market value. For better or worse, they are going to stay for a very long
time. At least from the current generation a significant amount of people will
cling onto it for the rest of their lives like others do with cigarettes.

------
CryoLogic
I wouldn't particularly mind if it lost another 100-200b in market cap. It's
gotta be enough to have a long term affect, and to teach the other social
media giants a lesson so they don't replicate the same behavior. Unfortunately
the might just get better at hiding it.

------
l33tbro
Facebook isn't going anywhere for a long time. They'll retain the privacy-
clueless fossils with FB. They'll keep the aspirational set with IG. Anything
even remotely competitive or alternative they'll just throw cash at and snap
up.

~~~
ardit33
Unless it becomes so uncool that you are lame if you still actively use it...

eg. like having a myspace, or a .hotmail, or a @aol email account

Social networks have to be both useful and trendy in order to fully
succeed....

messenger and whatsup are both very useful, FB itself is less, and it needs to
be somewhat trendy in order to survive

Personally I find fb very useful to keep up with family and friends, but that
might be not be the same for other people, especially very young folks

~~~
ams6110
Myspace actually did keep a niche going with musicians for quite some time
after its general popularity had waned. No idea why that was or if there's
even any of that left.

------
mikeash
I’m impressed at how misleading this headline is. If you didn’t know better,
you might think Facebook’s bank accounts contain $100 billion less than they
did a week ago. What they actually mean is that the stock price is down ~20%.

------
VeejayRampay
I like how when you click on the headline, the article actually says "$70B".
But then again, what's $30B nowadays.

------
benevol
Facebook deserves to die. That's really all there is to say.

~~~
sgregnt
Facebook deserves to prosper.

------
bb88
So while it seems like $100B dollars is a large sum, it's really about 12% ish
of the market valuation. Yes it hurts, but no, it's not the end of the
company.

Think of it this way. How much money will FB have to spend to rebrand itself
and fix the privacy issues. $1 Billion, maybe $2 Billion?

You can do a lot with $2B dollars.

~~~
megablast
It will be back up within a few weeks. That is the way it works.

------
bigtones
Shares in Facebook did not fall on Monday - they were up 0.45% at market
close.

~~~
dennisgorelik
FB +0.45%

S&P +2.72%

That means FB is still falling relative to the overall market trend.

~~~
unreal37
Falling upwards?

Words having meanings! Let's just use words that mean what they mean. Facebook
did not "LOSE" $100B, and the stock is not "falling".

------
Dowwie
Change isn't coming. Sorry.

Trump's victory signaled a social media gold-rush for political campaigns.
2018 is a major election year in American politics. You can bet that campaigns
are evaluating and signing onto social media related efforts. To meet this
demand, as Cambridge Analytica buckles, others will take it place. The people
who benefit by these services are those who make the laws. While legislators
benefit by social media targeted services, there won't be a political will
sufficient to pass a law that will slay the goose laying golden eggs.

------
paulsutter
This is what Mark gets for contemplating a run for President...

------
nstj
@dang: “Facebook stock has dropped $100B in in 10 days...”

------
pimmen
The advertisers leaving is what really hurts Facebook. Remember, you aren't
Facebook's customer if you're just a regular user; you're the product.

Think of it this way; imagine a farmer having a bad harvest. that's a lot of
pressure, but he or she will try to cope with the loss and monetize what's
left cleverly. Now, imagine the same farmer but the demand for the crop is
falling. Now that's a capital "P" problem right there.

------
jjuhl
With luck this could be the beginning of the end for Facebook. Probably not,
but one can hope.

------
stevemk14ebr
Is it crazy to consider investing in their stocks soon-ish. I totally hate the
company but if this is global-minimum i can make some cash pretty easy. I'm
relying on the premise that most users will continue to user the site and that
this is a short term media frenzy similar to youtube advertiser fiasco.

~~~
pedalpete
If you hate the company, don't invest. If you're non-fussed but think it will
return to it's glory days invest. If you love the company, invest.

You aren't the only one who doesn't like the company, it "can" be taken as a
negative signal and suggest the company will continue to lose.

How many people LOVE facebook? I don't think they really exist anymore. Apple
has it's haters, but it also has it's fans. Google has more haters than fans.

Of course, we're talking about more mature companies here, so the upside is
not as great, the downside could have a real impact.

Of course, you have to consider FB as more than FB. If you loved Occulus, I'd
say maybe invest. Big fan of Whatsapp, maybe invest.

There should be other opportunities to invest in things you do like that you
would be proud to own.

------
stanislavb
Let it burn

