
Facebook unfriended - briandear
http://www.economist.com/node/21559947?fsrc=scn/tw/te/pe/workinprogress
======
ChrisNorstrom
This is why you really need to research a company's growth potential before
you buy its stock. Just because something's popular doesn't mean it can grow
forever. Had all those investors realized that Facebook was a one trick pony
they might not have lost 40% of their money (and counting...).

They had all these visions of grandeur that Facebook could plug various
services to their existing users and make endless amounts of money. Maybe add
a Facebook classified ads service, document sharing service, auction site,
shopping e-store for its members that takes a small commission. Whatever other
companies did, just copy it and add it on Facebook and watch users instantly
abandon competitors. After all FB has close to a billion users. Little did
they know that Facebook users were never that engaged nor will they ever be.

The collective hive mind of bored humans completely ignored Facebook
Questions. Zuckerberg's first attempt at trying to cultivate its legion of
human potatoes. He quickly pulled FB Questions after no one used it and tried
again later by changing it to Ask Questions and shoving it right after the
"Add Photo/Video" link above the status update box itself. People are still
ignoring it. Its members are there to share photos and talk to friends, not
seek knowledge, not sell photos, not start businesses, not buy digital
products, not share documents, or anything else productive or profitable for
that matter.

In general users follow the "One website per one purpose" rule. Auction site
neanderthal, eBay learned that the hard way when it simply tried to tack on
classified ads thinking its members would ditch craigslist. Even monopolistic
cro-magnon Microsoft has tried and failed numerous times at getting its
installed base to use more profitable tacked on services and products.
Ironically they only succeeded in spreading the worst internet browser in
human history this way. Facebook's still in denial about it's useless network
of potatoes. Sorry. Humans.

After all these years Silicon Valley still values massive droves of bored
users without problems over clusters of customers with money in hand. In some
ways they're right, Facebook still makes massive amounts of ad revenue and is
still profitable. But I doubt it'll experience any further population boom or
miraculous revenue growth.

The company isn't going anywhere for now, but as Facebook fatigue sets in and
members find new and easier ways to share photos with friends (a user's main
activity) things might not always be "flowers and sunshine" for FB. And in the
future we'll look back in hindsight and say "I can't believe they didn't
foresee it, all the signs were there."

~~~
taligent
I just love armchair experts.

Did you ever think that maybe those investors aren't looking for a short term
return and don't care about the stock price day to day. You know the type of
investors we actually need more of.

And if you actually were a little more creative you would see that Facebook
doesn't have to bundle everything into the website. It can have separate
brands like Instagram and grow into new markets that way. And with its sheer
user base and content it would be able to decimate smaller competitors.

~~~
AlisdairO
> Did you ever think that maybe those investors aren't looking for a short
> term return and don't care about the stock price day to day. You know the
> type of investors we actually need more of.

That kind of intelligent investor was probably unlikely to buy in on a clearly
overhyped IPO, in fairness.

~~~
joering2
Yes agreed and +1. I believe it was Warren Buffet who said: on stock exchange,
every long term investment is a missed short term investment.

But obviously you wont find a person in his her sound mind (not to mention
financial guy) who would say: hey lets buy now and even if it goes down 40%
thats fine we are in it long run... (lol)

Besides Facebook is a special example. It was banksters fraud perfectly
executed. Yes Facebook makes money. Yes, it is self sustainable, yes it will
pay off all its debts and creditors. Yes it doesnt go anywhere. But the
overbloated IPO price with this PE was a freudster move. This stock belongs to
single digit wagon. When it gets there, then consider buying for a $1 or $2
pop accordingly to good Q, but until we get there respect your money for God
sake!

------
antidoh
"So Facebook must make money from the members it has rather than simply by
adding new ones."

The test will be if they can charge for membership. People find phone service
worth paying for. People find internet service worth paying for. Some people
even pay for TV.

Would 50% of current users pay for Fbook?

~~~
theorique
I get a lot of value from Facebook and I would be willing to pay a nominal
subscription fee.

However:

• As a customer, my demands are much greater than as a user. I feel more
entitled to make demands and get real attention than for a free service.
Customer service becomes more important when money is involved.

• I would expect _absolute_ control over my own data. No advertising. No
selling aggregate data to advertisers. If I quit the side, my data needs to be
gone completely, without a trace.

• If my friends started quitting the service in droves, due to fees, I might
no longer consider it worth the money and would probably leave or wind down my
involvement as well.

~~~
maigret
As a way to make that visible to Facebook (probably someone there is looking
at that thread, but your vote count isn't visible...) - I would totally pay
for FB also, at the price that linkedin or others are proposing.

My demand would then be data security, no advertising. Other users could stay
on free service, but the apps they use shouldn't have access to my data
anymore.

EDIT added mention to invisible votes

~~~
theorique
Yes, I think maintaining a free service would be necessary, much as LinkedIn
does. Freemium seems to be working well for LNKD in a way that might be a
potential way forward for FB.

------
mapster
The article presented very little factual info other than FB stock price and
the latest Wall street social media drama (anecdotal). FB is the envy of any
large media company so it's multi billion valuation is spot on.

------
tomp
FB is slowly becoming background noise, a part of our infrastructure that
everybody has come to depend on, but that noone is really hyped about. Kind-a
like Google Search.

~~~
joering2
No it doesnt. Not only i personally not care about all the "be the first of
your friends to like this post about deadly car crash", there is further no
"infrastructure" that internet relies on when it comes to facebook. To me and
billion other net users it could dissapear overnight and i would see or feel
the difference, other than websites would get little bit cleaner. Google, on
the other side feeds website owners with monetary gains by leasing space from
them for adsense. If that would get shut down, i would assume many could not
afford to continue with their websites.

~~~
tomjen3
And my grandparents would be quite happy to see the internet going down.

But that doesn't mean that billions of people don't rely on it.

------
steve8918
Facebook has done what every other company only dreams of doing, which is get
almost everyone in the world to use them, and on a relatively consistent
basis.

The problem is that they haven't been able to follow this up with another home
run. They have all these users, and unfortunately their best way of monetizing
these users so far has been ads. And even then there is anecdotal evidence
that these ads aren't very effective. And even worse, their users are moving
onto mobile far quicker than they anticipated, and because that space is
unmonetized, they are losing a large source of income. They are facing the
perfect storm of poor monetization of their current users, a mobile platform
that is completely unmonetized, and quicker-than-anticipated migration of
their current users to this unmonetized platform.

The Facebook desktop experience is a lot less sticky than they believed, and
now they need to scramble to fix this gap in monetization, and until they do
(and if they can), their stock will be under pressure. The movement of users
from Facebook desktop to Facebook mobile is something that probably could have
been picked up a lot sooner through their analytics, and something they should
have addressed a lot sooner, instead of publicly scrambling now for a
solution.

I thought 2-3 years ago that the logical next step for Facebook was to invest
heavily in their Facebook app ecosystem, so that people would log into
Facebook and stay there the entire day. They could have email, IM chat, world
news, tv shows, music, word processing, etc all from various Facebook apps and
keep their users engaged all day long. It would follow the natural progression
of Operation System to Browser to simply Facebook. And with the iPhone App
store as a model, maybe they could charge 30% and make loads of money that
way.

But this never seems to have taken off, which seems like a strategic misstep.
I find the Facebook app space to be relatively inactive, except for games like
Zynga, but even Zynga's results show that Facebook app usage appears to be
dropping. Because the Facebook app experience is relatively non-existent, it
means that the only really useful feature of Facebook is the newsfeed and
photos, both of which can be reproduced very well on the mobile. If they had a
healthy Facebook app ecosystem, it might slow down people's migration to
strictly mobile, and allow for better monetization of users as well.

As a side note, I've been trying to develop a Facebook app just to learn, and
I have to say that the developer documentation is amongst the worst I've come
across. Things have changed so quickly that doing Google searches is
relatively useless. And even the latest documentation doesn't appear to be
proof-read, lacks good explanations or examples, is confusing in many places,
and some links don't even work. Thank God for stackoverflow! There are a lot
of weird loops that have to be jumped through as well, which feels hacky, but
I imagine there are technical reasons for it. But still, it feels like the
entire experience of developing an app should be cleaner and easier. Part of
it is probably because you can't host your apps on Facebook servers, so all
this indirection causes technical issues, so maybe the solution (if it even
matters anymore since app development doesn't seem very popular) would be to
offer their own hosting service.

------
alaskan
This article is just a rehash of all the articles that have been discussed on
HN in the recent days. I just don't understand why stuff like this gets
upvoted. This anti-facebook anthem on HN has to die

------
alpine
I really, really wish an Open Source alternative to Facebook and Twitter would
happen so we can put the proprietary social era behind us.

~~~
DanBC
I'd prefer a standards-based approach.

Define an open standard for a message; a photo-share; tagging; etc etc.
Include stuff that clients and servers MUST do, or MUST NOT do. Write a nice
server, and host it. Write a nice client (Browser extensions? Website?)

Now you have an open ecosystem that is as flexible as people want it to be.
There's a reason that all discussion sites end up being a worse implementation
of Usenet.

~~~
Silhouette
_I'd prefer a standards-based approach._

Exactly. The problem isn't that we don't have useful social networks. The
problem is that we have too many of them, with varying heights of wall between
their respective gardens that make interoperability and data migration
absurdly difficult in many cases.

I suspect the roadblock is that these networks are tied together by the
underlying concepts of identities and relationships, but for many valid
reasons a lot of people would like to present different identities in
different contexts or treat some relationships differently to others. Until
there is some reasonably standardised approach (or set of compatible
approaches) to representing these ideas, there's no robust foundation so you
can build different kinds of messaging and content sharings systems on top.

That in turn leads to practical issues of authentication and trust networks,
and we haven't completely solved those problems in a way that Just Works for
non-technical users yet.

~~~
awakeasleep
Consider the ecosystem of the internet plus phones and computers as "the
social network". You'll see what we have actually works how you'd like, right
now.

Facebook lets you talk to your old friends, twitter lets you meet new ones,
and google plus is there if you want to get serious. Tumblr for a more
expressive context, and wordpress for the rest.

The problem with creating a new social network is that you'd have to replicate
a dozen companies with varying degrees of porosity in their services.

Add to that my second point: we don't know what we want yet. Things are still
evolving and developing, in a high pressure cauldron of talent and money. Once
things cool down and take shape we'll see what we like and someone will spend
time making open source plugins. It's a really fun time to play on computers.

~~~
Silhouette
_Consider the ecosystem of the internet plus phones and computers as "the
social network". You'll see what we have actually works how you'd like, right
now._

Not quite, because everything is so heterogeneous that there's no unifying,
consolidated view to help me use it.

I want a single private, secure, easy to use platform to look up my friends
and colleagues on-line, and on top of that I want to have convenient plug-and-
play functionality for everything from IM to sharing photos to collaborating
on a coding project to scheduling a business meeting.

Right now, we have the Internet infrastructure sitting a level below all of
this, and numerous web sites (not to mention e-mail, IM tools, Usenet,
distributed version control systems, etc.) trying to be both the platform and
one or more of the plug-ins. This is not what I want as a user, i.e., as a
person who wants to get stuff done and doesn't really care whose badge is in
the corner of the screen as long as it all works properly.

