
Facebook stock drops more than 20% after revenue forecast misses - noncoml
https://www.marketwatch.com/story/facebook-stock-crushed-after-revenue-user-growth-miss-2018-07-25
======
JumpCrisscross
Deletion is too extreme for most people. More reasonable: escalating partial
dis-engagement. Here's what my friends and I did, sequentially, over the
years:

1\. Turn off notifications for the Facebook app on your phone;

2\. Turn off notifications for the Facebook Messenger, Instagram, et cetera
apps on your phone;

3\. Delete the Facebook app from your phone;

4\. Delete the Facebook Messenger, Instagram, et cetera apps from your phone;
and finally

5\. Log out of Facebook on your desktop.

It took me 2 years to go through from step 1 to step 5. It has made me happier
and more productive. I still have a Facebook account. But the friction of
grabbing my laptop and logging in forces me to consider "is this what I want
to do? Or am I thoughtlessly reaching for the crack pipe?"

~~~
ashelmire
Deleted my account nearly a year ago. I don’t miss it at all. For the first
few months, I definitely felt like I was missing out on things. But since then
I’ve taken a bunch of classes, read a bunch of books, and enjoyed my other
hobbies more. It’s hard to do that when wasting time on Facebook. Also I’ve
avoided all the bullshit arguments and much of the debates with extremists on
all sides of the political spectrum.

I want a social network that encourages human interaction in the real world -
not one that turns friends into enemies, feeds narcissism, and provides a
platform for corporations and hostile governments to spy on us and manipulate
us. Facebook cannot and will not ever be that network.

~~~
iknowverylittle
>I want a social network that encourages human interaction in the real world -
not one that turns friends into enemies, feeds narcissism, and provides a
platform for corporations and hostile governments to spy on us and manipulate
us.

Well this is a site for startups. It seems like you have a good initial
idea/problem and/or need. Now the next hard part is concieving and
implementing a solution.

There's peer-to-peer networks already though I doubt any of them will be a
Facebook replacement. It does provide a solution in part to the spying and
data mining (obviously whatever you decide to put out there is free to be
harvested).

So how do you encourage human interaction, perhaps meeting, and build
constructive discussions?

Unfortunately I'm afraid some of that might just be choosing to predominantly
interact with people that are also like that. Although a technologal solution
would still be valuable.

~~~
ashelmire
> Well this is a site for startups. It seems like you have a good initial
> idea/problem and/or need. Now the next hard part is conceiving and
> implementing a solution.

Aha, I'm already moving onto implementation. I've been thinking about this for
a while. Maybe I'll be one of the next billionaires in tech ;-)

~~~
iknowverylittle
Well you can give me your second billion after you make your first.

That said, I don't know how you would monetize a system like that.

Furthermore would you really want to? Seems to me part of Facebook's (and
other popular social media platforms) growth is attracting advertisers with
access to user data personalization.

Consequencently this set up leads to people (at least geeks/nerds) boycotting
or giving up on Facebook due to information mining and obnoxious advertising.

Then those aforementioned nerds/geeks make something new that begins the cycle
over again.

~~~
K0SM0S
> That said, I don't know how you would monetize a system like that.

My personal intuition is that the simplest forms of communication (defined as
exchanging data between two or more participants) shouldn't be _directly_
monetized.

If we compare to physical communications means and services, there's an
obvious yet powerful realization to make: communication is free (from any
third-party) so long as it's distributed (i.e. when you and I talk, we take it
upon ourselves to spend the energy required to communicate, we don't need a
middleman), whereas it becomes a paid-for service when it's centralized (e.g.
post office, telephone system, nowadays internet).

Notice that in the physical world, most (centralized) communication businesses
are monetizing a more-or-less public container, which operates as a black box
for the (de facto) private content. — e.g. package, letter, phone
conversation.

Translate this into the digital world: email, file storage and exchange, chats
and calls. So far, to my knowledge, most of the popular solutions have been
centralized and therefore, monetized (notable exception are bittorrent or IRC,
the protocols, widely used as a consequence, but rather nerdy to the general
pop, which I think has to do with UX).

Simply put there's a business behind most of the middlemen (Fb, Gmail,
Skype…), few solutions rely strictly on tech that anyone can freely operate:
you need that central server authentication to reach other users in the walled
garden, and neither 'speaks' to others (can't use app X to speak to someone
using app Y).

Back to my personal intuition, there is an increasingly higher chance that
someone comes up with a decentralized communication system wherein users each
bear the cost/energy required to communicate, based on a free protocol (as in
beer, it needs not be OSS, although probably should for security/trust
purposes).

Think Bittorrent for data specific to communication. The internet in itself,
with requests being free (POST GET etc), is such an example of a distributed
architecture which you enter simply by leveraging the correct tech; there is
no gatekeeper. Blockchains might be another good example of distributed
systems (even ignoring cryptocurrencies and focusing on the distributed
database tech).

It's a general trend, I think, that we progressively massively distribute
technology-based services starting with the most fundamental, the closest to
"first principles" for the purpose. Think about printing, how it started with
Gutenberg, what a single individual can do today. It takes decades, centuries,
these are deeper trend. However, as fast as things go in this day and age, I
think communication is just about to be disrupted _forever_ by virtue of
massively distributing the means. Just like printers. Or file exchange.

------
everdev
> Wehner also said Facebook still expects expenses to grow 50% to 60% from
> last year

> “But as I’ve said on past calls, we’re investing so much in security that it
> will significantly impact our profitability,” Zuckerberg said. “We’re
> starting to see that this quarter.”

That sounds like a big 1-year jump. From what I can tell, the big Facebook
scandals (fake news, Cambridge Analytica) came from faults in company policies
rather than security glitches.

I wonder if labeling it "security" is a PR thing as their web ads all focus on
FB taking active steps to make sure those types of scandals don't happen
again.

~~~
sonnyblarney
I was directly involved in one of those 'incidents' several years back where
FB gave our app a special API that others did not have. This was because it
was easier for us to build the 'FB experience' for their users, than it was
for FB themselves. It was clean, legit, above board and secure.

It's astonishing how different the 'media narrative' is from reality, and it
confirms my belief that the press runs on such narratives (i.e. building up,
crashing down) because in both directions the truth is inflated for dramatic,
i.e. click-bait reasons.

Our large company built a very good FB app that effectively was 'FB' on our
platform. It was FB branded - for users, it was effectively the 'real' (and
only) FB. Obviously that app had to have special APIs.

Everyone involved from top to bottom was pro. We didn't store data, nor did we
want or need to. The way the tech was setup (data goes to app), we didn't
really have the option. Users logged into their own accounts and retrieved
their data, it's not like we could just access data arbitrarily.

Everything was pro and above bar - and nobody in the equation - a lot of us
regular, conscientious people - thought for a second that anything was wrong
or irregular in any context.

In fact - the whole situation could be described as: "FB hired 3rd parties to
develop some code", which surely they do in some circumstances.

Nobody was harmed in any way, and there really wasn't risk of anyone being
harmed.

I understand that with 2018 hindsight, we might look at things a little
differently, but in reality, I think we'd have _still_ done it. Perhaps there
would have been more checks and assurances (i.e. FB takes ownership of code
and actually publishes the app), but in reality it was (and would still be)
fine.

As far as the Cambridge story - this is also misleading because the API's that
were used there were available to the _entire world_ and everyone knew exactly
what they were. Were there tech people screaming foul? The press? Not really,
they seemed reasonable, until it seemed that some bad agents were getting a
little unscrupulous, and so FB did the right thing and altered the APIs to
make them more secure. Security polices change all the time, in this case they
tightened up given some field data. That's it.

It's really a story about Cambridge's scammy behaviour, and possibly lies to
FB on where that data was, not about FB.

I don't like Facebook, I don't use it, I don't like being 'productized' etc.
etc. - but I don't feel that the information in these scenarios has been
properly handled by the media.

Because there are legitimate issues with privacy in the new world order in
2018 that are finally coming to bear, and we definitely want to re-evaluate
our situation with FB, basically, we go and dig up 'something that happened 10
years ago in which nobody was harmed' to build a 'kind of misleading
narrative' around the the 'legitimate issue'.

~~~
NikolaNovak
FWIW - Every time I have has personal knowledge of IT issue that made news, it
made me lose faith in news. I'm not talking the minor, regular and downright
stereotypical "Journalists don't understand technology", but major spins of
context, impact, background and history. I'm currently on a system that's been
making front pages in my country, and while the factual details of impact are
largely accurate, what causes them, background, what can and should be done
about it are wildly inaccurate (and not in the "reasonable people can disagree
/ many technical solutions have merit" sense; in the "what are you smoking /
why does anybody think or believe that" sense :P )

~~~
everdev
Everyone I've met that's been interviewed about a controversial topic has been
critical of the press. I haven't been sure if it's because they think their
view is the only correct one or the media are truly that sloppy.

My intuition says the latter because time is money and journalists are rarely
experts in the fields they cover.

~~~
hluska
I was once something of a journalist and noticed something interesting. When I
interviewed someone about something controversial, they were significantly
more likely to become defensive when I checked facts and quotes with them.

~~~
losteric
Sometimes the defensiveness arises because of our offensive media
atmosphere... the feeling is some of the journalist's quotes/"facts" may be
mis-attributed, taken out of context, or straight up lies hoping to get a
response that can be quoted out of context.

Even supportive facts/quotes can cause concern. Subject matter experts have a
reputation on the line, while the journalist is often just looking for a
story.

~~~
hluska
It's interesting because the act of constantly checking facts and quotes
actually helps prevent words from being taken out of context. Good interviews
can get away from both parties and solid questioning and verification ensures
that the listener applies the correct context to the words.

------
yotamoron
Faacebook is hugely overvalued. Its actual value for its users is far less
then perceived. You can't fool all the people all the time, and the day will
come that people will realize it. I'm all for social networks (and making good
profit from operating them), they have a key role in democratizing the global
society, its just that facebook is abusing our basic psychological needs to
make money.

~~~
collyw
Its difficult to give it up completely (without loosing something). I tried,
but it is a useful place for contacts that you don't see often and are in
different parts of the world. It stays current, which phone numbers and email
address don't.

~~~
beagle3
You lose something by using it too, you know -- you let FB track everything
about you, and shape your world view if you read the posts they decide to show
you. It's a tradeoff.

You don't have to delete it; Just make sure it is perfectly blocked (through
uBlock Origin, Disconnect, Ghostery, PiHole, etc) so they can't track you -
and login in once a month or so to
[https://mbasic.facebook.com/](https://mbasic.facebook.com/) if you need to
figure out someone's new phone number.

------
alismayilov
Facebook is very valuable in countries where press freedom is not good (if
facebook is not blocked yet). My country (Azerbaijan) is one of the worst
countries in terms of press freedom. The only “free press” we have is a
facebook. There are many goverment’s trolls, but everybody understands when
trolls write something (trolls get average salary). On the other hand,
goverment follows oppositions’ discussions on facebook and responds
accordingly. That is the only platform we have now goverment and oppositions
speak with each other.

~~~
scandox
Well at least your trolls are paid. A lot of our trolls seem to be volunteers.

~~~
spdionis
Probably the volunteer ones are the most realistic and dangerous.

~~~
Cthulhu_
Yup, I'm fairly sure the online Trump hype train was 10% trolls and 90% people
tagging along for the ride.

Then again it died reeeally fast right after the election, so now I'm not sure
anymore.

~~~
thetrumanshow
Or more abstractly: influencers and followers. What makes them trolls,
exactly?

Also, no surprise things die down after an election, since it’s not the hot
topic anymore.

------
ardy42
Facebook can't be doing well: they're running ads on the New York Times app,
trying to convince me to join.

And these aren't flattering ads either: they emphasize that I'd be joining "2
billion users" and that "it's free to sign up." They're bargain basement and
have a desperate vibe.

~~~
anonytrary
I'm a young millennial and I'm sure that I'm suffering from a bias here __* --
but I 'm actually surprised they would need to take out ads in the NYT, given
what their product is. I just find it so hard to believe that a significant
number of people in the US haven't heard of Facebook or haven't any close
friends who use Facebook. If the number wasn't significant, then I don't know
why they would need to take out ads. Unless you've been living under a rock,
if you're my age, then you have had more than enough time to figure out
whether Facebook is your cup of tea.

 __*I am probably underestimating how many older folks are completely out-of-
the-loop with Facebook.

~~~
mcbits
It does make some sense considering the ideal user for an ad-supported
business: Has money and either isn't savvy enough to block ads or, even
better, ethically opposes blocking ads.

No offense intended to the previous commenter in particular, but statistically
speaking, someone who reads stodgy news without an ad blocker in a
subscription app on an expensive phone probably fits the profile. They may
have heard of the company but haven't tried it, or they tried it in the past
and just need the brand occasionally refreshed in their mind until they try it
again.

~~~
varjag
There's probably zero people in the world who ethically oppose ad blockers and
haven't heard about Facebook yet.

~~~
fastball
I know a couple people that are ethically opposed to ad-blocking and have
never bothered to sign up for Facebook.

~~~
varjag
Huge difference between "never heard of" and "never bothered to subscribe". An
ad in NYT is unlikely to win their minds.

~~~
fastball
The comment you replied to had the phrasing:

    
    
      They may have heard of the company but haven't tried it, or they tried it in the past and just need the brand occasionally refreshed in their mind until they try it again.
    

Nobody but you claimed that these people "haven't heard of" Facebook. You seem
to be under the false impression that ads are only for people that have never
heard of something. That is almost the opposite of the truth.

------
utopcell
From the article: ``The company reported 1.47 billion daily active users,
while Wall Street expected 1.49 billion; it logged 2.23 billion monthly active
users, as analysts expected 2.25 billion.''

It doesn't feel like the results justify the 20% drop.

~~~
cm2187
I presume the dollar value of a US or European user to advertisers is greater
than that of an Indian or African user. European user count going down is
problematic.

But the problem with these after hours sessions is that they don't have much
liquidity and that you can easily have a market squeeze due to people covering
their position. This is what happened with the VIX ETNs.

~~~
zeusk
Everyone but most retail investors can trade during AH, while the liquidity
may be lower - I'd say the participating agents are more logical and have
enough capital to drive big moves.

~~~
briandear
Retail investors can easily trade after hours. With Fidelity, it’s a simple
check box/request to enable it.

------
Animats
The market has expected this for years. Look at Facebook's declining P/E
ratio.[1] 81 in 2005. 22 now. Successful established companies have P/E ratios
in the 10-20 range. Facebook is coming in for a landing as an established
company, ending its growth company phase. This is a normal part of the
corporate life cycle.

[1] [https://www.nasdaq.com/symbol/fb/pe-
ratio](https://www.nasdaq.com/symbol/fb/pe-ratio)

~~~
dawhizkid
You cannot say a 20% drop AH is "expected" by investors. If this was truly
"expected" then the slowing growth would've been long accounted for in the
price.

~~~
perl4ever
I think you* have unreasonable expectations for precision in valuation. 20% is
not a large fluctuation in the context of the unlimited future of a company.
Something truly unexpected would make an order of magnitude difference.

*but you're not alone.

~~~
what_ever
How is 20% not a large fluctuation? That doesn't make sense. If you want
absolute numbers it's $130 Billions. Almost worth 4 Twitters.

~~~
perl4ever
Without getting into any theory about how much stocks _should_ vary, if you
choose a bunch of random stocks and track them for a few months, I think you
would find out that 20% is not a lot.

Stock prices should come with uncertainty bars, like scientific quantities,
but there is of course no standard way to calculate and denote that.

~~~
usaar333
FB Options expiring this Friday had an implied volatility of about 100% before
close of day.

A 20% drop in 2 trading days has around a 1/700 chance of happening under a
Black-Scholes model.

So yes, this does happen in the market, but it's a reasonably rare event.

(As another data point on how rare this was, $190 puts were being sold for
$0.3/share. Those are now worth $17, a 50x return)

Sources:

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

[https://www.hoadley.net/options/barrierprobs.aspx](https://www.hoadley.net/options/barrierprobs.aspx)

~~~
adrianN
A 1/700 chance per day means that it happens every two years or so, right?

~~~
Danieru
Two years of days where implied volatility is 100%. That is not an everyday
level of implied volatility.

A single day move of twenty percent is rare even in small caps. Facebook
moving that much means the market did not except even the risk of something
this big.

For comparison when Nissan announced a recall of over a million cars their
stock moved less than three percent. Single day moves are rarely so large, and
almost never this large for a single company.

------
ceohockey60
The pessimistic guidance dovetails well with Zuckerberg's recent, wide-ranging
interview with Kara Swisher[1]. FB has been the darling of tech and general
media, until the last 2 years--turning a great brand to an increasingly toxic
one. By Zuckerberg's own estimation, FB's "retooling" needs 3 years, and they
are about 1 1/2 years in, so the guidance reflects that timeline. If they
deliver on that timeline, a rough 2nd half of 2018 and all of 2019 is to be
expected.

[1] [https://www.recode.net/2018/7/18/17575156/mark-zuckerberg-
in...](https://www.recode.net/2018/7/18/17575156/mark-zuckerberg-interview-
facebook-recode-kara-swisher)

------
drewmol
>"and at the same time, it was encouraging to see the vast majority of people
affirm that though want us to use context, including from web sites this they
visit, to make our ads more relevant and improve their overall product
experience.”

I assume the vast majority clicked 'Agree' or similar on prompts about updated
policies, but it's funny to phrase it this way. Obviously if asked directly,
the vast majority would't actually _affirm_ that.

------
schnevets
I'm seeing a lot of "I deleted and I don't even miss it" comments. I haven't
deleted my account just yet, but I only check the news feed once a week.

Taking this anecdotal evidence into account, I wonder if it's just Facebook's
core audience growing out of social media. Sure, Zuckerberg has a bazillion
users, but his site started by selectively inviting college students in the
early 00's. Those early adopters are now all in their 30s and have better
things to do than gossip and post vanity shots all day. Maybe the older
audience who joined the site later are losing interest because that core was
less active.

And then there's the younger generation who actively avoid Facebook and stay
connected through a massive spread of other apps/games/sites that are not
outright social media outlets. Without a major pivot, this could be big
trouble for FB.

------
edw519

      2007
      High school acquaintance: Join us on facebook!
      Me: What for? So you can treat me like shit like you did in high school?
    
      2008
      Cousin: Join us on facebook, so you can stay in touch.
      Me: Why don't you just tell me what's happening like you always have?
     Then we can shoot the shit and laugh and talk and gossip, just us two, like we always have?
    
      2009
      Neighbor: Why don't you join our community group on facebook so you can see what's going on?
      Me: I'll just pay my dues and spend my time on what's really important to me.
    
      2010
      Work associate: Why don't you work at facebook? Everywhere else is lame.
      Me: Because lots of other places are doing cool stuff that really matters.
    
      2011
      Friend: I can't believe you're still not on facebook. Everyone is!
      Me: Your 2 sentences contradict each other.
    
      2012
      Me: Why didn't you invite me to your wedding?
      Fraternity brother: Because you're not on facebook.
      Me: Lame. And classless.
    
      2013
      Sister-in-law: Your business cannot succeed unless it has a presence on facebook.
      Me: Really? I just had my best year ever.
    
      2014
      Local business: See what we're up to on facebook.
      Me: I just go somewhere with their own website.
    
      2015
      Me: Why didn't you answer my emails?
      Friend: Why didn't you just message me?
      Me: What's that?
    
      2016
      Work friend: How do you manage to get so damn much work done?
      Me: Because I'm not spending hours every day on facebook on my phone.
      I'm too busy building stuff.
    
      2017
      Business guru: A following on facebook is not nearly as effective as a good email list.
      There's too much noise for the signal.
      Me: You don't say?
    
      2018
      Almost everyone: What have we done?!?
      facebook is ruining everything!
      Our privacy is gone! How do we get off?
      Me: I get off every day. The old fashioned way.

~~~
deepaksurti
Now when some one asks me why I am not on FB, I will just redirect to this
:-). Thanks and I thank myself for having not wasted even a second on any
Social NW site, not that I look down on others who do. To each his own, for me
staying away helped and I profited!

~~~
fosco
HN is a social networking site, it is the only one I use. but I am spending
time reading these comments... and probably do not want tknow the total time
per week I spend on this site, I might cry because my excuse of not having
time to exercise could be wrong.

------
noncoml
> Wehner said a combination of currency headwinds, new privacy controls, and
> new experiences like Stories will contribute to the deceleration

I remember the day Chambers Saif Cisco hit an air pocket. Since then it has
only been layoffs, cuts and austerity for Cisco. Never really recovered. Is it
the same day for FB?

> Cisco on Wednesday reported healthy profit and sales gains for its fiscal
> first quarter, in line with Wall Street expectations. But a host of
> challenges -- including losses in public sector accounts and in specific
> product areas like set-top boxes -- coupled with a less-than-invigorating
> sales forecast for the current quarter, were enough to send Cisco's shares
> tumbling.

> Cisco CEO John Chambers, on Cisco's Q1 conference call, described the
> challenges as hitting an "air pocket," and was bullish on many of the areas
> in which Cisco excelled. But he set a subdued tone for the call, especially
> with the forecast that second quarter revenues would increase only about 3
> to 5 percent, and a forecast that revenue growth for fiscal 2011 overall
> would be 9 to 12 percent, well below both the 13 percent for Q2 and the 13.1
> percent for FY11 predicted by analysts.

> Specifically, said Chambers, orders came in over $500 million below Cisco's
> initial Q1 sales forecast.

------
patrickg_zill
As well, Facebook announced that they were going to set up a new incubator in
China.

Then today or yesterday their permission to do so was yanked by Chinese
authorities.

EDIT: [https://www.zerohedge.com/news/2018-07-25/just-hours-
after-a...](https://www.zerohedge.com/news/2018-07-25/just-hours-after-
approval-china-kills-new-facebook-venture) summary of stories from NYT,
Reuters, etc. on this matter

~~~
hemantv
I don't like the Chinese government at all. But at least there is a powerful
force against stopping this company from infecting all of the humanity.

I just wish India would take a similar stand and then game over for Facebook.

------
adarsh_thampy
I deleted my Facebook account more than 2 years ago. Installed Instagram to
test what the fuss was about. But uninstalled it in a day.

The thing that's still Facebook and major part of my life is WhatsApp. Chit
chats, group discussions, and calls with family back home all happen through
WhatsApp.

Couldn't transition to other apps because most people in my family and friends
circle don't really care about privacy or data security. They prefer
convenience.

Without them switching, it's going to be hard for me to switch.

~~~
tapoxi
> Couldn't transition to other apps because most people in my family and
> friends circle don't really care about privacy or data security. They prefer
> convenience.

What's wrong with phone calls and SMS? Granted they're not more secure, but at
least they're not Facebook. I don't know any WhatsApp users, so I'm unaware of
the advantage.

~~~
SamuelAdams
My social circles use it because it provides a consistent experience. Some
have androids, and some have iPhones. When you have an all iPhone group chat,
things work rather well. Liking different texts, animations, etc work well.
But when you add a non-iPhone to the mix, the texts are sent sms-style, so you
get messages that say "Sam liked X's comment!".

It's easier for everyone to use WhatsApp, because that platform provides a
consistent experience. Also I can search messages in WhatsApp, I can't find
this in iMessage.

------
bradenb
I think the stock price is finally catching up to reality and public
perception. I've noticed a huge resistance to using Facebook in recent years
within my social sphere. Professionally, I'm one of the few that I know that
still use the service; I think it's FOMO keeping me on, but I find it
extremely difficult to add content to my profile and find myself mostly acting
as a passive consumer of others' content.

~~~
mrep
They have over a billion daily active users. That is more than the EU and the
US COMBINED! Any personal opinions about a product are practically useless
when your customer base is that freaking large and diverse.

Edit: I avoid facebook like what seems like most other people here on hacker
news but my point is that hacker news is in no way shape or form
representative of the global population.

~~~
GranPC
> That is more than the EU and the US COMBINED

Source? From two quick Google searches it seems like the EU and the US Z
combined make more than 1bn users.

~~~
mrep
According to Google search for EU and US populations:

EU population: 508 million people

US population: 325.7 million people

------
mtgx
When Facebook posted good returns and stock didn't drop right after Cambridge
Analytica many were gloating about how that is "proof" that the privacy
scandal didn't affect Facebook and that no privacy scandal will ever affect
Facebook.

But they were simply not looking closely enough. And as I said back then, you
need to give this sort of things time to see the real effects, like at least
until the end of the year. Because I believe the worst is still ahead of
Facebook. Facebook is now on a downwards path, and it's irreversible.

Facebook is now officially Blackberry. And just like with Blackberry before,
many dismissed the fundamental issues of the company while blindly following
the "record quarters" Blackberry kept having until 2009.

If they had just looked closely enough, they would've seen that BB's core
North American market was on a steep decline path and it was also obvious that
its phones were nowhere near as good as iPhones or Android phones.

Just look at what's happening to Facebook engagement. Ignore Facebook's
sugarcoating. Look how the people around you are using Facebook and what they
say about it.

~~~
aylmao
> When Facebook posted good returns and stock didn't drop right after
> Cambridge Analytica many were gloating about how that is "proof" that the
> privacy scandal didn't affect Facebook and that no privacy scandal will ever
> affect Facebook.

> But they were simply not looking closely enough. And as I said back then,
> you need to give this sort of things time to see the real effects, like at
> least until the end of the year.

I agree.

> Because I believe the worst is still ahead of Facebook. Facebook is now on a
> downwards path, and it's irreversible.

I don't think I agree. Facebook still has many opportunities for user and
revenue growth in Instagram and WhatsApp. As far as being irreversible,
Microsoft was in a very dire position too and now it's having record-breaking
quarters. It'll largely depend on leadership and direction.

> Facebook is now officially Blackberry. And just like with Blackberry before,
> many dismissed the fundamental issues of the company while blindly following
> the "record quarters" Blackberry kept having until 2009.

If they had just looked closely enough, they would've seen that BB's core
North American market was on a steep decline path and it was also obvious that
its phones were nowhere near as good as iPhones or Android phones.

One bad quarter doesn't make a company "officially Blackberry". IIRC,
Blackberry didn't release it first touch-screen phone until 2013 (5 years
after the iPhone) and it's first Android phone until 2015 (8 years after the
iPhone). It was their stubbornness quarter after quarter, year after year that
sank them-- they weren't dead the minute the iPhone was released just like
Samsung wasn't. They should've just played smart and embraced
Android/touchscreens from the get-go.

Will Facebook remain stubborn or will it gain trust back? I don't know.
Calling it dead already is a huge oversimplification though.

> Just look at what's happening to Facebook engagement. Ignore Facebook's
> sugarcoating. Look how the people around you are using Facebook and what
> they say about it.

The people around me are not an accurate sample of all Facebook users around
the world. In my case, I see a lot of people using Facebook for Events and
Marketplace. I see everyone on Instagram. The real data is in the numbers.
Facebook's website falling behind Reddit is telling, but Instagram and
WhatsApp surpassing Snapchat's stories also is ¯\\_(ツ)_/¯

------
yalph
Its mostly because of the guidance, not the miss.

------
cs702
_User growth is slowing down to a crawl:_

* There are 4.16 billion Internet users worldwide.[a]

* 26.3% of the world's population is under 14 years old, close to Facebook's minimum age of 13.[b] This means 73.7% of the world's population is at least 14 years old.

* If we assume the population of Internet users has a similar age distribution as the world's population, that means there are around 4.16 * 73.7% = 3.07 billion Internet users who are at least 14 years old. This is a _rough estimate_ of the maximum possible number of people who can have an account with Facebook today, i.e., the size of the company's addressable market (in users, not dollars).

* The true size of Facebook's addressable market could be higher (for example, if the age distribution of Internet users is different)... but it could also be significantly lower (for example, if a substantial number of Internet users cannot or will not join Facebook due to religious, cultural, or governmental restrictions, or due to the availability of established regional alternatives).

* Facebook just reported monthly active users of 2.23 billion, up only 11% from 2.01 billion a year ago.[c] This isn't exactly stellar user growth. The company now has around 73% penetration of every person in the planet who can join Facebook today. Again, this is a rough estimate.

* The company's CFO disclosed in today's quarterly earnings call that the company expects a "deceleration" in growth.[d]

[a]
[https://en.wikipedia.org/wiki/Global_Internet_usage#Internet...](https://en.wikipedia.org/wiki/Global_Internet_usage#Internet_users)

[b]
[https://en.wikipedia.org/wiki/Demographics_of_the_world#Age_...](https://en.wikipedia.org/wiki/Demographics_of_the_world#Age_structure)

[c] [https://investor.fb.com/investor-news/press-release-
details/...](https://investor.fb.com/investor-news/press-release-
details/2018/Facebook-Reports-Second-Quarter-2018-Results/default.aspx)

[d] [https://www.cnbc.com/2018/07/25/facebook-warns-investors-
of-...](https://www.cnbc.com/2018/07/25/facebook-warns-investors-of-weakening-
revenue-in-second-half-of-2018.html)

\--

EDITS: I updated the global Internet usage figures based on dooglius's comment
below (the Wikipedia page is outdated). I also expanded significantly on my
original post to make my facts and reasoning as clear as possible to others
here.

~~~
dooglius
The first citation on that Wikipedia page [0] has been updated to an estimate
of 4.16 billion internet users as of Dec 31, 2017.

[0]
[https://www.internetworldstats.com/stats.htm](https://www.internetworldstats.com/stats.htm)

~~~
mrep
From what I can tell (those sources are pretty vague), they include china
where American tech companies are effectively banned and thus there population
is not really relevant.

------
ebikelaw
Well, the stock dropped a bit after the report, but then it fell off a cliff
during the call. It must be the forecast and not the results that is really
spooking people.

~~~
gnopgnip
How are stock price drops reported when the market is closed?

~~~
mortehu
The closing auction signifies the end of regular trading hours (where more
rules are in effect) but not the end of all trading. US stocks now trade 24/5
on at least one market, and well beyond 4pm ET on many more.

------
2sk21
One thing I have been wondering - how will they monetize WhatsApp?

~~~
jquast
Haven't they already monetized on WhatsApp? They've already been able to
gather a massive amount of social graph data and personal details, phone
number, location information.

If they made any amount of value on WhatsApp data, the users are never
informed. I think the only way to really know is to join as an employee and
find out what they do/did with it. The only thing we are aware of is
advertising when we see it, everything else is nebulous.

~~~
2sk21
Agreed - WhatsApp data is getting added to their social graph for sure.
However, they have not yet made any attempt so far to, say, inject ads into
chats or on the app itself. Despite their statement of end-to-end security,
they still control the end points, so this kind of ad injection could be
compatible.

------
apexalpha
Delete the apps. Use website for facebook and Messenger Lite if you must.
These apps are the new sigarettes.

------
jhanschoo
In my opinion, among all the tech behemoths, it is Amazon that has the best
long-term (stock) prospects. Whereas most tech companies build their
businesses on ephemeral software-based services, Amazon possesses logistics
and infrastructure that are among the best in the world.

~~~
lawrenceyan
JD.com has far better logistics and infrastructure. They also don't send you
fake products when you order online as their guarantees seem to actually mean
something unlike Amazon.

~~~
StudentStuff
Seriously, a guy I know that works over at Amazon was horrified at the trash
that Amazon Fresh delivered to his house both times he tried it. Rusty,
leaking canned goods and a mix of average to damaged produce does not make one
want to be a repeat customer, even if you want to support your own company.

JD.com with their heavily automated warehouses seems like they've eliminated a
major cost center, it'll be curious to see if its just nearly fully automated
to the press, or actually significantly better than Amazon/Ingram Micro & the
other major human based warehouse wholesalers out there.

------
timtas
> The social-media behemoth’s stock lost roughly one-fifth of its value.

That's one way to describe it. Another way is, Facebook's stock fell to where
it was two months ago, which is 70% over what it was at the start of 2017.

I'm not saying that a large one-day drop is insignificant or isn't news. But
to paint this as the bottom falling out is unwarranted.

------
mhh__
Time to buy discount facebook stock?

~~~
le-mark
I don't have the sense this is a bottom by any means. Certainly there will be
a bounce but I expect to see long term decline (imo).

------
let_var
I deleted Facebook before deleting Facebook was cool. I'm sure there are few
good benefits but drawbacks and ads dwarf them all.

One more thing - the last time when I met my school buddies back in my
hometown, we had more things to share, discuss and appreciate. It really felt
good and real. Previously this experience was diluted by constant barrage of
FB feed, there was nothing new to share or discuss.

------
nadim
20p discount on FB today

------
tchaffee
I haven't seen anyone mention that the drop did not carry over into the
regular daytime trading. Am I missing something or is this a non-story by now?
I was actually looking forward to buying FB at a 20% discount, but it just did
not happen at all during regular trading hours.

~~~
tchaffee
I was totally wrong. Not sure what happened. Maybe I was looking at charts
before the market opened?

------
ElijahLynn
I have kept my account for the reason that I meet people in real life and that
is very valuable to me. I try not to use it for much else, but event discovery
and human connections are important enough for me to keep the account.

------
hemantv
This company is the drug dealer of Silicon Valley. They have consciously
destroyed a generation attention span using psychological tricks.

Hoping they start losing some of the good talent + the US implement something
similar to GDPR.

~~~
_cs2017_
Judgmental much? Who are you to speak on behalf of everyone, a whole
generation? I personally have enjoyed using FB and Instagram. If you don't
like it, don't use it. And don't tell me and other users that we are stupid or
drug addicts.

~~~
jnwatson
Just like the opioid crisis, there is a point at which individual choices
collectively impact society. I'm personally fine with someone shooting up in
the privacy of their own home, but clearly something must be done when entire
communities are affected.

Facebook has shown a willingness to provide my country's adversaries a
powerful tool to subvert the foundations of its society. Fomenting racial
strife and spreading pernicious rumors is just the start of it.

The country and the world would be a better place without Facebook.

~~~
existencebox
Honest question; Why is _facebook_ the powerful tool, and not our populations
inability to recognize the threat (misdirection, targeted messages, biased
sources, etc) within it/think critically about it? To dismiss the nonsense
like most people used to dismiss tabloids. Facebook obviously scales this up,
but that is the nature of a modern connected world, whether we like it or not,
and I'd rather give people the tools to navigate that than try to build a
padded room, since there will _always_ be another Facebook. (And to fully
undermine my own point, I _don't know if it's possible_ to give enough people
these skills, but from a philosophy of personal empowerment and freedoms, the
alternatives seem far less preferable)

It sounds a lot like the drug war. The approach that DRUGS are the problem, as
opposed to situations that lead users to abuse them in destructive ways, has
lead to a very demonstrable half-century of ineffectual policy and violent/sad
outcomes.

I have not so entirely given up on ones ability to tread a path through this
insanity, and am more worried of an escalating trend to put that
responsibility in the hands of some gatekeeper as opposed to ones own agency
as a sentient human. I don't even disagree with your final statement; I'd just
want to see it come from rejection by the individual than mandate from on
high.

~~~
beagle3
> Honest question; Why is _facebook_ the powerful tool, and not our
> populations inability to recognize the threat (misdirection, targeted
> messages, biased sources, etc) within it/think critically about it?

> It sounds a lot like the drug war. The approach that DRUGS are the problem,

"facebook" is not the drug; "[http://facebook.com"](http://facebook.com") is
the drug, and that's not he problem. "Facebook Inc" is the problem, much like
purdue pharma is a significant cause of the current heroin epidemic. And not,
purdue has not been addressed either.
[https://www.nytimes.com/2018/05/29/health/purdue-opioids-
oxy...](https://www.nytimes.com/2018/05/29/health/purdue-opioids-
oxycontin.html)

------
chrischen
If only facebook helped me achieve my goals rather than trying to manipulate
me to give them attention with the lowest hanging fruit.

------
trhway
that explains recent what looks like layoffs at FB. I was surprised to learn
that several people in my extended network have been very recently and
unexpectedly kicked out from FB.

------
untog
Interesting to note that this is currently #2 on HN, while a discussion about
fake news/free speech on Facebook was immediately flagged off the home page as
soon as it arrived:

[https://news.ycombinator.com/item?id=17613810](https://news.ycombinator.com/item?id=17613810)

I'd be curious to hear from those who flagged that Facebook story and not this
one: why is that one inappropriate for HN and this one fine?

~~~
noncoml
IMHO it's big news signifying a possible end of an era. We reached peak FB.
What's next? Is it going to implode as fast as it exploded, or is it going to
be another tech dinosaur dying slowly?

The financial consequences will also be big. A lot of people have invested in
FB, probably you too, through your 401k. Also imagine what will mean for the
SF Bay Area a FB that is laying off or cutting down on expenses/compensation.

~~~
mrep
> What's next?

Reddit maybe since they have been exploding in growth.

To me, it seems as though network effects are not as important as they seem as
the businesses that rely most on them where fellow users provide all the
content (myspace, facebook, twitter, snapchat, reddit...) rise and fall faster
than any other company.

~~~
narrator
Reddit is committed to free speech and anonymity while Facebook is not.

~~~
mrep
I love reddit but they have banned many subreddits.

Nobody has pure free speech not even the US (you cannot say bomb on an
airplane nor threaten someone among many other things).

Granted, we do have more free speech than most countries but not pure free
speech (which I think is fare as my former 2 examples were cases that bring
negative externalities upon others).

~~~
SmellyGeekBoy
I know we've been over this on HN many times but "free speech" is more about
freedom of the press than freedom to be a dick to other people or break the
law. The banned subreddits I know of were either hate groups or pedophilia.

------
AzzieElbab
Bots to the rescue?

------
pbreit
Since GOOG had good earnings, safe to say this isn't reflective of broader
market/economy?

------
stevehawk
Completely anecdotal but I enjoy hating on facebook -

I created an account so I could create ads for my new business.. I have no
idea what's going on but the only page it ever serves me is "sorry something
went wrong." so clearly they're missing out on my $5/day ad budget.

~~~
SmellyGeekBoy
Their ad platform doesn't play nicely with ad blockers. Maybe that's the cause
of your issues?

~~~
stevehawk
The ad creation tool is working fine. It's the "Page" I created. Can't view
it, modify it, publish it, etc, i just get the error page. And because of that
I can't launch an ad campaign.

------
bigtones
Yhis was all after the bell as was the earnings announcement, and the quoted
stock drop was in the after hours trading market, so it could be less tomorrow
in the standard market.

~~~
ebikelaw
It's funny to suggest that after hours trading means less. The people trading
during the regular session were literally just gambling, whereas the people
trading in the after are trading on new fundamental information.

What I'd really like to know about today's regular session is why seven
billion dollars worth of shares changed hands on the last tick.

~~~
zeusk
> What I'd really like to know about today's regular session is why seven
> billion dollars worth of shares changed hands on the last tick.

Not all trades are reported real-time; Dark pool executions are often bulk
reported prior to end of day settlement.

