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The new Yahoo? Facebook should heed the lessons of internet history (economist.com)
418 points by jkuria 3 months ago | hide | past | web | favorite | 230 comments



This seems implausible precisely because it’s the crowded view. But can anyone recall a time that the crowd correctly predicted the ascent of an unpopular product or the descent of a popular one? I’m old enough to remember Yahoo’s rise and fall. There was a time people thought Zuckerberg was a greedy fool for turning down a $1 billion bid from Yahoo. Oh yeah did we forget about that?

Yahoo failed because they were out-innovated. They weren’t the only ones. Lots of highly successful search engines got their lunch eaten by Google. Yahoo also suffered from a lack of leadership and some very poorly conceived acquisitions.

I don’t see any of that with Facebook. In fact it’s the opposite- people are uneasy with how effectively they’ve acquired users and their data and monetized it.

Further, they’ve pretty much only made incredibly savvy acquisitions and managed their integration into the Facebook ecosystem masterfully. Instagram not only exists today but has quickly become arguably the most valuable property. What about Tumblr? Flickr?

Say what you will about the ethics of the company but Facebook has demonstrated they have vision and the ability to execute and adapt. Yahoo didn’t. Most companies don’t. They have their existing business and customers and exist as long as the winds don’t change.


> Yahoo failed because they were out-innovated

The worst part is that Yahoo innovated a lot ... In incubators, side projects, etc ... But they failed to bring their innovations to their main products, or to turn their side things into full blown products.

They had no plan, neither overall or per product.

Take emails for exemple, for the longest time (and still now, although not as dominating) THE key to user identity on the internet. Google had a plan to leverage their Gmail userbase and integrated it, Microsoft took its time but they ultimately had a plan to leverage their hotmail userbase, but Yahoo sat on yahoo mails (one of the "big three" of emails basically) for the longest time and did ... Nothing.

Same with flickr, they had people who loved the platform and begged them to take their money and move the product forward as a paid product and instead they let it rot for years. Lots of yahoo properties are like that. It's not that they tried something crazy and it failed, it's not that they got beat by a new comer, they just let their stuff die on their own. Pictures is now even more relevant than ever, and Yahoo should have been at the forefront and yet they let themselves be sidelined by doing nothing.

The best non-yahoo similarity I can find is what Google is doing with Blogger.


> The best non-yahoo similarity I can find is what Google is doing with Blogger.

That's a good point. But to be fair everything "social" that Google has touched has died with the exception of YouTube.

In fact Google really hasn't done a great job holding onto many other arenas than their main ones. Blogger has been blasted by Medium. Knol was outlasted by Quora. Google Code was beat by Github. Their "shopping" attempts have always been eclipsed by Amazon. They can't get an edge with Google Cloud compared to Azure and AWS.

Gmail, YouTube, Maps, and Android are all success stories. But if you look at their "social" products YT is really the only success story.

EDIT: I use and love Google Photos but I can't remember the last time I heard someone talking about it. Instagram did it with a social spin.


> Knol was outlasted by Quora.

Knol wasn't a competitor to Quora. It was meant to go after Wikipedia, Answers.com, and the various how to sites. Quora wasn't founded until June 2009. Knol's traffic had peaked in early 2009 and already fallen off a cliff by June 2009. By the time Quora got up to scale, knol had been long dead. By Google's own admission, they were shocked by the success of Wikipedia, which spurred their attempt with knol.

https://techcrunch.com/2008/07/23/googles-knol-the-monetizab...

https://techcrunch.com/2009/08/11/poor-google-knol-has-gone-...


Yeah Google doesn't get social (you forgot Buzz in your list) but at least they try, and keep trying in different ways, like it different fields, until one sticks (you forgot Chrome in your success list - it doesn't bring money, but it allows them to partly dictate where the web goes and how it works, something that is a lot of value for them). When they get something that looks cool, they try it.

Yahoo didn't even try, when they got something cool, they went "ah, nice" and then closed it or forgot about it.

> EDIT: I use and love Google Photos but I can't remember the last time I heard someone talking about it. Instagram did it with a social spin.

Same, but as the same time, I would wager pretty much every android users uses it, and has more photos on it than on instagram. It seems the value of google photos for google is not to monetize it directly, but as a way to 1. have data to mine, 2. know more about each user to improve their other revenue source and 3. to keep the user tied to his google account and ecosystem. From that point of view, it's a massive success (and it explains why they went that route and pretty much killed picasa instead of the opposite).


In the end almost all of the tech successes and failures listed are reducible to a much simpler explanation: the effectiveness in using network effects to create moats, and defending those moats by adapting to technological change.

Controlling an operating system is a massive such moat, see Microsoft, Google and Apple. As is the first effective search engine - once you have both the eyeballs and the advertising revenue, it's almost impossible for any competitor to displace you.

On the other hand, an email service is not such a thing. Gmail is a good product but it's easy to duplicate or disrupt by other email providers and various messengers. A content hosting platform, be it for pictures, videos, or simple html websites, will not produce strong network effects by itself - this where the "social spin" you talk about becomes essential.

Yahoo persistently failed to create and defend these network effects. Messenger was such a strong network effect-inducing product, but they failed to adapt it to the mobile era and destroyed it through heavy advertising and blatant disregard for the user experience.

Facebook are currently in no such danger, they have a few massively addictive products built on strong network effects. Sure, some people might move to other forms of socialization - but billions more are going online, in countries with rapid economic growth. There is nothing on the horizon that significantly threatens Facebook's moat.


Chrome is and was a fortress intended to defend the approach to their river of gold: advertising. A dominant browser controlled by another technology company is an existential risk to Google as it would provide a point at which their advertising could be entirely disintermediated.

Android exists for the same reason.


We’ve already seen this with Safari blocking all auto-play videos and making attempts to disable cross-site tracking.

I would agree


YouTube was already market leader when they bought it, as far as I recall.


The problem with Google is exactly the same as Microsoft in the 90s.

They just have no taste. They have absolutely no taste. What that means is, I don't mean it in a small way but in a big way.

- Steve Jobs.


Skeumorphism: "Steve pushed very hard to have everything–the felt-cloth table, the game chips–look like they would in real life,” says another former Apple designer. https://www.fastcompany.com/1670760/will-apples-tacky-softwa...

(of a big phone) "you can't get your hand around it...no one's going to buy that." -- Steve Jobs

http://www.engadget.com/2010/07/16/jobs-no-ones-going-to-buy...

Maybe it's better to have strong opinions, even if some are wrong, than to just throw stuff at the wall and see what sticks.

Or maybe Jobs got really lucky that some of his taste resonated really well.

Hard to tease out the effects of survivorship bias.


> Maybe it's better to have strong opinions, even if some are wrong, than to just throw stuff at the wall and see what sticks.

I had an epiphany the other day that the secret of life is being able to simultaneously hold-believe-do contradictory ideas -- micro-applying whichever is apt for the immediate task.

Apple / Jobs history isn't something I'd consider myself well-versed in, but both of your points seemed to be present and required.

Having a maniacal dedication to a product during development (ie strong opinions), while also being willing to amortize risk over many project and ultimately call a failure in consumer acceptance a failure (ie see what sticks), seems as apt a description of the "secret sauce" as anything.

Google's problem is that they seem to fundamental believe there's a RIGHT way to do something (as engineers do). When for many things, there are a lot of right ways and its intangibles that cause a product to succeed or fail in the market place (aka taste, as artists do).

Obviously generalizing over a company as large as Google, but you see it when the market pushes back against their offerings. It seems like there's a core cognitive dissonance (eg with the Chrome UI simplification) because they're damn sure they built it "right."

Facebook, for all their cool tech, seems to be suffering from the Soviet problem. Reward by the numbers, and teams reporting up to you will come up with numbers.

I'm surprised the article attributes to top-down dictates (skew the ad numbers in Facebook's favor) what the Soviet Union learned in the 70s and 80s -- ask an impossible or overly difficult thing, and there will be bottom-up metric fabrication in response.


I think your thesis is wrong, simply because Google is far more willing to amortize risk over many projects (even multiple different approaches in the same space!) and “ultimately call a failure in consumer acceptance a failure” than companies you suggest are better at that, like Apple; it's kind of why people attack them all the time for killing things.

It's true that they are prone to thinking that there is one right way, like engineers; they are equally, however, prone to thinking that empirical testing is the best way to discover the one right way, and to accept that their hypotheses about the right way will sometimes be wrong.


I'd phrase it that Google trials end user facing products more like Yahoo and Microsoft, and less like Apple and Amazon. Which is to say, with less than full corporate dedication.

In the engineering / GCP space, their open-beta -> GA flow seems to work sanely.

But I don't think anyone on the consumer side would have said G+ felt, at any point, like a corporate priority.

What I was trying to capture was the dedication and faith to push things with full effort... right up until you decide to pull the plug. A la iTunes, Apple Watch, Amazon Echo, or FBA.


That was definitely true during the steve jobs era but I don't think its true anymore. The pixelbook looks pretty damn good next to a macbook.

https://www.imore.com/sites/imore.com/files/styles/xlarge_wm...

https://cdn.vox-cdn.com/thumbor/a6XjossJ0NszY2-LYhbc1tf-13c=...

https://www.imore.com/sites/imore.com/files/styles/xlarge_wm...


It's worthwhile to hear the whole quote in context:

https://www.youtube.com/watch?v=IKxOywaoUKo

I would say Google started out with a "Spirit of Enlightenment" but lost the plot.


Yeah. Who needs big screen?

- Steve Jobs


Are you paraphrasing? It doesn't have the same effect.


No. Was just pointing out the fact that Steve Jobs has said a lot of bullshit. I wouldn't want to quote him to make any kind of point.


This is the idea that’s been stuck in my head about G but I didn’t have the right words to express it.

I had been thinking of them as “the kid that did everything right on paper: hires the best tutors, got a 4.0 GPA, perfect SAT scores, yet didn’t understand why they weren’t the most popular and liked student”


>They had no plan, neither overall or per product.

I seem to remember some leadership there being adamant that they're weren't a tech or internet company, but a 'media' company. I can't remember which one (or ones?) but this embrace of hollywood/media vs technology seems to have been a key factor in their perpetual slide.


That was the big premise during the Terry Semel years. He was a high level executive with Warner Brothers for 25 years.

They had no idea what they were doing or what being a media company in the Internet age meant. They flailed about for a decade with confusing ideas of what their strategy and end goal was.

How did they go about pretending to be a media company for so many years, while watching others dominate streaming music and video? Incompetent leadership. How did they miss the numerous opportunities to acquire a real Internet media business like Netflix, for relatively cheap? They could have picked it up for most of 2007-2013 for $2b to $4b (early 2007 being when they launched their streaming service).


Wouldn't Netflix become another name on the list of failed acquisitions, like Flickr?


That's what I believe, too. If Yahoo had acquired Netflix, or Facebook, they wouldn't have succeeded either.


I think nobody knew what being a media company in the internet age meant. For another example, see AOL/Time-Warner. Being a media company was perceived (and compensated) as more valuable than a tech company. Just the opposite of the perception now.


I understand but hey if it's pre 2010 and you're holding one of the big three king of emails I don't care what you think: you're a tech company, deal with it.


> The worst part is that Yahoo innovated a lot

^ This!

Yahoo innovated a ton! Everything from the software infrastructure level (a few submissions to the Apache Big Data suite), to the hardware infrastructure level (data centers) to acquisitions (had they just made a mobile app of Flickr they would've had Instagram years before Instagram).

But yes, their biggest problem to me, seemed to be by far and large lack of leadership (e.g., the CEO turnover)

Disclosure: previously worked at Yahoo



Yahoo failed because they were a directory service that saw the search box as less relevant. Google recognized that searching is the human approach, not ordering stuff into folders, which is an obsessive compulsive trait.


Categorization and catalogs go back centuries so I don’t think I’d call it an OCD trait. Early search engines (90s) were very bad, the change that caught Yahoo was the quality of search. I remember doing searches on altavista, getting a million hits, and at least the first dozen were nothing but log files. The game changer for search was its ability to prioritize relevant content over accidental matches. That started training us to search, which was a new way to interact with information. You couldn’t search an printed encyclopedia. In the 90s Yahoo was much more useful than Webcrawler.


The other game changer was speed. Altavista and other early search engines were incredibly slow.


Big companies seem to have industries as their unit of operation. If this is generally true, top leaders have very limited detailed input/output into a specific product itself. Many resources can not be taken into the process of a product evolution. Put it simple, top leaders of a big company usually have quite different direct goals instead of a product. A product's evolution depends on the options and resources a product team can have in a time frame. The rest of a big company is meaningless. The bigger the overlap of top leaders have with the product team, the better chance the product can evolve with the market demand. Jobs comes to my mind.


That reminds me of yahoo pipes. Cool idea but I don’t think it went anywhere.


Pipes was the best thing to come out of Yahoo. They prematurely killed it off. Way ahead of it's time and a product with seriously good utility, unlike Wave.


A very good point. It was hard to know what Yahoo was (or is). In the beginning, remember, they weren't a search engine. They were a curated directory of the Internet. In fact, it was hard for me to realize when they dumped that entirely and switched to a real search engine--despite the fact that I was in this business: I worked for Infoseek!


> Facebook has demonstrated they have vision and the ability to execute and adapt.

I'm a former attorney who worked in the investment industry and one of the shitty things I had to do when I first got out of law school was review footnotes on marketing material. In that industry there is one footnote that is basically the gospel: "Past performance not indicative of future results."

Has Facebook demonstrated their vision and ability to adapt? Absolutely. So did Kodak, Sears, and Apple. Though Apple managed a turn-around they certainly had a point where they very likely would have gone the way of Sears until they brought Jobs back.

Prior ability to innovate and execute means nothing. The important thing is continuing innovation. What the company is doing _right now_ is orders of magnitude more important than the longest track record of success. If anything, I think innovation becomes more difficult the bigger a company gets and the higher customer and investor expectations get.


> Though Apple managed a turn-around they certainly had a point where they very likely would have gone the way of Sears until they brought Jobs back.

The $150M investment Microsoft gave Apple had a lot to do with saving Apple, as well. https://www.cnbc.com/2017/08/29/steve-jobs-and-bill-gates-wh...


> "In fact it’s the opposite- people are uneasy with how effectively they’ve acquired users and their data and monetized it."

The people I know who uneasy are not so much concerned with the fact that FB has done this; but how. Phrases that come up are: reckless, unethical, lack of transparency, immaturity, etc.


> Yahoo failed because they were out-innovated

Their most popular property ended up being Flickr, and they let it rot when smartphones and apps started being popular 10 years ago. Instead pro users fled to 500px and other communities, and social users wen to Instagram.


Yahoo! didn't build Flickr.

Flickr came from Game Neverending. It was an in-game feature and it did so well, the game was never released. That came from Caterina Fake and Stewart Butterfield's team and their innovative work at Ludicorp. It was purchased and then became a squandered opportunity by Yahoo!


I don't think GP was suggesting that Yahoo built Flickr. They said it was Yahoo's most popular property. Which, outside of Mail, is probably a completely true statement.

And they absolutely let it stagnate. The apps that were available for phones (once there were apps) were often pretty terrible, from my recollection.


Never said they built it. But at its peak (I'd say around 2006-2010) it was owned by Yahoo.


Thanks for the history lesson. But OP never suggested that Yahoo built it.


Adding to other snarky comments about The Economist here, if it is published in The Economist it probably is the crowded view. I read the magazine for years and I'm not sure if I gained much unique insight about anything.

Certainly Facebook is not Yahoo. I think you are right, Facebook is almost exactly the opposite of Yahoo in every way, from the founder sticking around to how acquisitions were picked and managed.

I don't particularly like Facebook or agree with it. I prefer the communication platforms on the internet looked more like the internet, decentralized. Unfortunately for both Facebook's proponents and critics we are now in a negative news cycle echo chamber.


They have accurate, high quality reporting on a wide variety of subjects. You are lying if you read the economist cover-to-cover every week and you don’t learn one “unique” piece of information, unless you are regularly keeping track of every country in Asia, Africa, etc.

If something is in The Economist, is isn’t breaking news, and it’s more like an assessment of a newsworthy situation from the neoliberal viewpoint. I find it very interesting compared to other news sources, definitely worthy of my subscription.


1998 Yahoo! turned down a 1 million dollar offer to buy Google.


Think that's bad? 10 years later, they turned down a $40bn acquisition offer from Microsoft.


Not all businesses need to innovate or die. Just look at craigslist. Due to the nature of a 2 sided marketplace and the catch-22 challenge of acquiring a sufficient userbase, other competitors that innovated weren't able to compete.


I agree they’ve made savvy acquisitions, mostly in stock, which boosted their perceived value. Facebook are really vulnerable - they rely on trust from advertisers and clients, and have one stream of income - advertising. This will be very vulnerable in a downturn (which incidentally is what destroyed yahoo).

Say what you will about the ethics of the company but

Thanks. They have always been entirely lacking in ethics, from they trust me, to zynga, to fake ad metrics, to illegal Russian ads, to Soros smears. This makes it hard for anyone to trust them.


> Yahoo failed because they were out-innovated. They weren’t the only ones. Lots of highly successful search engines got their lunch eaten by Google.

Yahoo! failed on email issues, not on search engine issues.


A lot of people went to Yahoo to search pre-Google. I think they were always "powered by Altavista", but they still got a lot of traffic for search.


Who owned Ask Jeeves?


Google still makes most of its money from search based ads. That pesky part about making a living and so on.


Blockbuster's demise was fairly widely predicted - at least among the tech crowd.


Not at the height of its popularity


> There was a time people thought Zuckerberg was a greedy fool

Are you implying that's no longer true?


I don't think many people see Zuckerberg as a fool.


>This seems implausible precisely because it’s the crowded view

I don't think that a company's success is based on the views of the outsiders. This is like picking B instead of C in a multiple choice test because there were to many questions with the answer C.


> A senior marketer for a large American bank says Facebook has made mistakes on measuring engagement, reach, views and other data for no fewer than 43 products. All of the mistakes, he notes, worked in the social-networking giant’s favour. “If these were true errors, wouldn’t you expect at least half to benefit marketers?” he asks. He expects to reduce how much his firm spends on Facebook and predicts that other marketers will as well next year.

I chuckle at how repeatedly human nature leads to surprise when “our son of a bitch” [1] turns out to be its own son of a bitch.

[1] https://en.m.wikipedia.org/wiki/Anastasio_Somoza_Garc%C3%ADa


This is like bank errors, which always seem to be in favor of the bank...


I found this article fascinating:

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.130...

The jist is, people are extremely bad at basic logic. Unless it's really in their best interest within the context of the story (ie, catching someone cheating you) to be good at them. It makes the difference between <50% of people getting the question right, vs >90%.

Presumably, everyone wants to get these logic puzzles correct. It just so happens that we're conveniently hard-of-reasoning except when it suits us.

For reference, the "logic puzzle" is Wason's selection task: which pieces of information do you need to test "if A then B"? The choices (choose exactly as many as needed):

(1) A => ?, (2) !A => ?, (3) ? => B, (4) ? => !B?



An interesting test — thanks for posting! They really need to mix up the order of correct answers though.

For me (spoiler alert), all of the questions had the exact same correct answers. Given the number of permutations, it seems highly unlikely that the test is randomized and I just happened to get this arrangement.


Mine didn’t. Correct answers for me on Q1 we’re different than Q2&3. I think they put the “A” sides on the left and the “B” sides on the right, and only randomize between each pair.


Thanks for weighing in. I thought it was pretty silly that (for me) the answers were selections 2 and 4 straight through.


One theory is that the brain has evolved specific "modules" that are specialized to certain tasks (i.e. detecting cheaters in social scenarios) and we perform much better when we can rely on these brain-ASICs than when we have to use our general-purpose higher reasoning faculties.

As far as I know, there's no conclusive evidence for reasoning modules, but there do seem to be analogous modules in our visual processing system.


I thought it was pretty well established that humans are wired to recognize faces. I don't have a reference though.


Yeah, I think facial recognition, edge-detection, motion tracking, etc. are examples of fairly well-established "modules" of human vision.

Unless there's been new research I haven't heard about, it's still an open question of whether there's similar biological specialization for, say, specific logic problems.


Love how Wells Fargo is running commercials that highlight how great they were after the SF earthquake in 1906. They don't have a single example after 1906 where they did well by their customers? Here in the Midwest they're selling their banks, reducing their geographic footprint.


Banks that make errors in customer favor go out of business.


Probably more that people will complain more if the bank error isn't in their favour.


That said what really counts is ad spend compared with stuff sold as a result, and anecdotally I gather Facebook is quite effective. I mean my friend sold some luxury holidays with quite modest facebook spend and it's rumoured others got a presidency cheap with similar techniques.


Wait, Facebook has over 43 products? What are they?


Facebook sells ads. Full width banner, half width banner, full width/half width combo pack special promotion, that would already be three different products in that business (these are not Facebook products, just simple examples of what can be called a "product"). On this level, it's easy to get to hundreds of "products" without even trying.


Wait, I thought they have 2.3 billions products.


I suspect they were talking about products for marketers.


Growth, Hack


From reading some of the stuff Yahoo put out back in their prime. I always got the sense that they thought they would never fall and were maybe a bit invincible.

I think Zuckerberg and Facebook in general, are very aware that Facebook is on the decline, they need to diversify. That's why they bought Instagram and used it to flight Snap. That's why they spent such an insane amount on WhatsApp.

Zuckerberg knows they need to create or acquire the next big thing to make it in the long term. At least, that's what it seems like to me. I have a feeling they aren't going anywhere soon because of this.


>Zuckerberg knows they need to create or acquire the next big thing to make it in the long

Isn't that exactly what yahoo did?


But Yahoo pretty much ruined companies they bought like Tumblr for example. I’m not saying Facebook won’t make the same mistake but so far they have done a relatively good job with Instagram and WhatsApp. Both of them are very popular and growing. Much different story than Yahoo, at least so far.


I think since they have just this year pushed out the founder of Instagram and will presumably be taking more control of Instagram, we will see how they actually do with it going forward. Up until lately, Instagram has had relative atonomy.


>they have done a relatively good job with Instagram and WhatsAp

WhatsApp announced that they'll introduce ads, and the co-founder left the company due to privacy concerns.


That has nothing to do with whether WHatsapp will continue to grow or not.


Yes it does. Users of the platform today are uninterrupted by ads and have no reason to think about how the platform is mining their data -- many are unaware its owned by FB.

Depending on the intrusiveness of the ads, users may opt to move to another platform, which will lead to more people being pulled away from Whatsapp. FB will have to monetize aggressively to recoup investments and keep wallstreet happy, but users may not be very receptive to ads within their messaging platform.


Well! They are not just buying but improving it as well. Whatsapp and Instagram are the best example.

Yahoo could not keep up the quality of any product that was acquired by them.


How is WhatsApp “improved” by reducing privacy and adding ads?


End to end encryption was added after the aquisition.


Encryption was already in the works via a collaboration with Open Whisper Systems, the makers of Signal (see signal.org).

AFAIK end to end encryption was actually part of the acquisition deal.

And now they regret it ;-)


While true, I am not really believing Facebook had anything to do directly with that happening. It seems like the entire industry was moving that direction and WhatsApp would've always had to implement it.


They turned down buying Google.

Zuck smartly buys his competitors.


Yahoo bought plenty of other "next big things" Geocities, tumblr, flikr, viaweb, Broadcast.com, del.icio.us, zimbra, and hundreds of others besides.

It wasn't clear at the time Google would be any kind of success, you are looking at things with hindsight.


Yahoo's acquisition track record goes beyond unlucky picking, it shows that they can't maintain or grow the services they bought either.

Compare with Google: Maps (Where2), Earth (Keyhole), Waze, YouTube, DoubleClick were all acquisitions they grew to be far larger under Google than they were before.

Disclaimer: I work for Google, although I have nothing to do with acquisitions.


At what point did Yahoo’s core business start to shrink or get the stench of being a loser? I have to imagine that Yahoo! acquiring them was a stinker for their users. Did anyone think of Yahoo as bringing strategic value to the services they were acquiring? By the time they bought delicious and tumblr they had a track record with flickr and any of the users of those services saw the acquisition as a negative.


A key problem with some of Yahoo's acquisitions is that they missed the right point of the curve: buying things once they were already Quite A Thing. While this may look like a safer gamble than buying something small that might be a thing and the next big thing eventually, but might be nothing at all next month, getting in late can have two key problems: already being a thing means it commands a high price, and you already have an invested user-base who may fight tooth-and-nail (or simply leave) when you inevitably make changes.


I don’t think any of the properties Yahoo! bought were very big (by today’s standards). Del.icio.us was great but it was a hobby project compared to Instagram/WhatsApp.


Actually isn't buying competitors a bad thing from the Anti-Trust point of view? If you own all the social networks and then refuse to let Influencers to share their post stats with their clients because "Facebook is not in the value chain" it really seems like it really becomes a real Anti-Trust issue. If you only own one, you can always claim there is competition.


> Actually isn't buying competitors a bad thing from the Anti-Trust point of view?

Anti-trust legislation is scarcely enforced these days. No matter if in the US or Europe.


To be fair, Anti-Trust takes ages to investigate and then go through the courts. But Google just got hit with an Anti-Trust fine of $5 billion.

I'm surprised Facebook hasn't been hit with EU antitrust already. But the EU is already talking about forcing Facebook to split up.


It'll be interesting to see how effectively they can keep that up now their VPN's been taken off the App Store.


Interesting, when did this happen? From the outside it definitely seems like it's been their x-ray vision for sure.


A few months ago: https://techcrunch.com/2018/08/22/apple-facebook-onavo

Still seems to be gone, and seems like Apple have banned the data stuff they were doing.


One of the reasons I stopped using WhatsApp and Instagram is that they got acquired by FB...


FB is a victim of their own success. "Everyone" has FB. Now some people grow out of it, use smaller apps to do what they used FB 99% of the time. The world moves fast, FB cannot change with each fad as money for the next qtr is on the line. They are buying new competitors but frankly they should not be allowed by the governments.


Simply, they can't create the next big thing outside of facebook. That's why they bought things.


It's not just Facebook. Perhaps your employer (I know my Fortune 500 is this way) prefers acquisitions over developing new products in-house. From experience I know it saps motivation and good people move on but it seems to be a thing.


Maybe they'll become the next Myspace?

"Facebook? You still use that? Everyone's on MyFaceWebsiteBookThing now..."


Well tiktok is not for sale.


It's easy to predict that companies will fail, because most do in the end. It's very rare for companies to survive for long periods of time. Just look at the fortune 500 over time. It changes, massively, from decade to decade. If anything that trend is accelerating: companies grow faster and disappear faster as well. So, predicting that neither e.g. Google nor Facebook will be around a decade or two from now is not that unimaginable. Maybe they'll find a way to survive. Maybe they won't.

My bet would be Facebook might disappear and Google has more of a chance of diversifying their business enough that they may survive. The reason is that ad driven business models are long term problematic for both but Google at least has alternate revenue streams (e.g. cloud infrastructure revenue, mobile phone revenue, content subscriptions, b2b sales for analytics, development tooling, etc). They have a much more diverse portfolio of products and services than Facebook. And that's discounting the stuff they do under the Alphabet umbrella. Facebook has just ads. Ads on Facebook, Instagram, Whatsapp, ....

The odds are stacked against pure ad driven business models. It's a race to the bottom. There's privacy legislation, browsers are being upgraded to counter tracking, and users are slowly getting a clue about it being kind of scary that big companies know a lot of shit about them. Add to that the stream of negative news about them and you are looking at serious challenges to what is the only business model Facebook ever had: create addictive engagement driven properties and claim as much time of their users as possible on it so they can measure what they do and feed them ads, fake news, sponsored content, and other stuff 24x7.

Facebook needs to diversify their revenue streams and not just their user facing properties. If they fail to do that, they'll peak and eventually decline.

My guess is that the pressure on Mark Zuckerberg to resign will keep on building until he eventually resigns. Then if they fail to change course under a new CEO, they could suffer the exact same fate as Yahoo where shareholders milk the existing business dry and eventually sell whatever remains for scraps. In the case of Yahoo, this only took a decade or so.


> It changes, massively, from decade to decade. If anything that trend is accelerating: companies grow faster and disappear faster as well

This is not true.

Across the West powerful firms are becoming even more powerful - Report published last week by the Economist

https://www.economist.com/special-report/2018/11/15/across-t...


I believe much of the turnover in the major stock market indexes comes from mergers and accusations, rather than companies failing. Sometime it is a floundering company that is acquired, but often it is companies seeking to expand their markets or vertically integrate.

I had a profitable petroleum refining company in my equities portfolio that has been gobbled up and issued a new ticker symbol four times in about five years.


> Google has more of a chance of diversifying their business enough that they may survive.

Had to laugh a little at this. Alphabet made $9 billion in profit in three months.


Yep, most of it from ads.


Facebook is the most expansive ad platform ever built. There are few fronts where it isn't the clear leader in capability. Advertising is problematic as a revenue model for companies on the other side of that mile-wide moat.

And if Zuck ever goes, the entire company goes with it.


Is that because he owns it or because he adds value in day to day management?


Facebook should have provided a Gmail alternative a long time ago. I am surprised how narrow minded they are in terms of long term revenue.


I think they did try by providing @facebook.com to all users but via FB platform only. They should have gone for a new UI rather placing in FB itself although I can understand why.


Personally I haven't been able to muster empathy for people who amassed a thousand lifetimes' worth of personal wealth and then are suddenly threatened with the potential of being left with...only a few hundred lifetimes' worth.


I don't think you're supposed to empathize with those people. You're supposed to empathize with the people who are about to lose their jobs who aren't wealthy, and the people who currently are comfortable with a bunch of FB stock that may not be worth a lot in the future, making them uncomfortable.


Well, perhaps you'd like to try harder? Or do you think they don't deserve your empathy? In the end, people with infinite money have to deal with many of the same issues we deal with: relationship/personal issues, health problems, death of close ones, etc.


I somehow doubt Mark Zuckerberg is worried about how to pay for his kids' college tuition (if he has kids, I really don't know).


I don’t empathise with drug lords and I don’t empathise with Zuck in particular.


I know of a few people turning off IG and FB due to the volume of ads, when WhatsApp is monetized lots will do the same. Competitors can offer a similar experience to IG, WA and FB with less ads, because the margins are so massive for FB now, and their products are relatively easily replicated. It's VERY easy for user to switch to a competitor compared with other industries. The scale of the network is hard to achieve but we've seen this done a few times before so I don't see why it won't happen again.

I predict that FB will continue to push ads for short term profitability, slowly leak active users and find that a bunch of competitors will beat them by accepting a lower margin than FB are willing to accept.

The main hope for FB is that they can identify and acquire these competitors before they get a large enough network to take them out.


> It's VERY easy for user to switch to a competitor compared with other industries

Not FOR WhatsApp it isn't. I don't know of an app that all my family/friends would switch to if WhatsApp decided to put ads on it. Switching chat apps with your entire contacts list is very cumbersome.


> Not FOR WhatsApp it isn't

I got my friends and family to switch to iMessage and Signal. The method was simple: I stopped responding on WhatsApp and spun up new threads, when planning something, on those apps. WhatsApp’s stickiness is overrated.


I wonder if it works the other way too. If a few key people in a network migrate to another network and stop using the old, will that force the others to move so that communication remains possible?


It's not as hard you might think. Other messaging services like Telegram and Signal also use phone numbers as the identifiers so it would be relatively easy to switch.


I tried my friends to switch to Signal and it failed miserably. Their friends and family are on WhatsApp, so why would they switch? It's very annoying for people to deal with multiple chat apps for multiple groups, especially if some members of those groups are overlapping. I've personally settled with chatting with my SO on Signal and everyone else deleted Signal and moved back to WhatsApp


Maybe we need laws against abusing the network effect, which is akin to monopoly. The networks should be split in multiple segments and they should be forced to implement a public protocol to communicate between them, and with other networks. Moving from one network to another should be like porting your cell phone number to a different operator. It's ridiculous that we imposed such strict rules on phone networks when people use SMS and voice calls less and less by the day, but not on internet based services that offer similar functionality (communication). It's a public interest issue, just like in the case of net neutrality and eminent domain.


I had the same issue, and I believe it's tied to UI/UX.

Signal, at least on Android, looks like a stock SMS text app. That turns "normal" people off because it looks and feels different from a "messaging" app like Slack/Messenger/Whatsapp etc where doing stuff like group chats, attaching video/audio/images is easy. When people see a standard SMS text interface, they feel it's for one-to-one communication only with limited multimedia capabilities (remember MMS?).


Of course, there’s no large reason for them to switch from whatsapp. It’s reliable, free, has no ads and it’s encrypted. Yes, privacy is an issue, but most people don’t care about that all that much. What they do care about is being annoyed or paying. If they give people a reason to move by making the app significantly worse through ads then people will move, and once people start moving it will be fast. Sure, people will need to keep two apps around for a while to deal with stragglers, but that is a minor inconvenience that will become unnecessary fast.

A free chat app does not have much lock in. Just look at what happened to e.g. MSN.


> Not FOR WhatsApp it isn't. I don't know of an app that all my family/friends would switch to if WhatsApp decided to put ads on it. Switching chat apps with your entire contacts list is very cumbersome.

Signal is a pretty good drop-in replacement for WhatsApp, given that WhatsApp is pretty much a Signal clone (it uses its protocol, etc).


It's a network effect problem, not an app problem. There's no IP or secret sauce, it's just a user migration challenge. It's not easy but it can happen very quickly, it takes a few seconds to download a different app and get setup. There's no vendor lock in from whatsapp.


Just use telegram? Literally no differences, but even more ease of use.


It took me about one hour to get my relatives to switch from WhatsApp to Signal. It literally takes a few minutes to switch. Just share the invite link and start using the other app.


Does that mean that the valuation of new companies in this space would be reduced once it becomes clear that the whole market is cyclical and by monetizing you start to kill your product?


Yes, I think that is the case. New social networks add very little value nowadays, which is a long term indicator that the will not continue to grow in value in the way they have so far. Personally I would not invest in the long term with FB.


Id say the value of new earlier stage companies in the space will increase given its obvious FB needs to constantly buy new properties to keep the machine running :)


I agree - replicating WhatsApp will not be hard. In any case, Signal and Telegram are waiting in the wings.


Yahoo failed, in part, because its competitors were better.

Being better than Facebook doesn't mean just replicating its technology, it means having a better social graph.

That's a hard problem to solve.


Facebook is one vision of ~modern life. Social networks are massively overrated in term of human value IMO. I think whatsapp is probably closer to what would be useful and not toxic. I don't believe people need profiles and graphs and whatever.


The profiles and graphs are really for advertisers, aren’t they? It seems like this discussion is centering on the utility that Facebook’s consumer products provide for it members. As we are often reminded, due to their business model, interests of users are indirect, secondary. Facebook’s main service is of course for advertisers.


Absolutely agree to your assessment.


I just came back from an island, we barely used computers. Never been so happy. People use whatsapp a lot, but it's just a modern reincarnation of phones. Send a little text, a little voice message, a little video. Nothing more. There it seems it's just right fulfilling the need to chat. The rest was a fantasy.


So (never used WhatsApp), how is it better than email or SMS for those things?


Just integrated and smartphone friendly. Think cellphone usage++ without the cruft.


Sort of. Facebook has left a market wide open, their original one. At the start when people started to use Facebook it was mostly young people sharing more intimate pictures and stories with their friends and people of similar age and mindset.

Now facebook is your public profile, where your aunt, parents and employer can see everything you do and judge every post you make. That's why we have nice pictures of cityscapes, nature, holidays and of food on our profiles. Because anything intimate or controversial would be exposed to a too big audience for comfort.

So the market for smaller circles of "parent free zones" is wide open. I personally believe that's one of the reason Instagram got traction, your parents and employer weren't there in the start but your friends were. Just look at Tumbler.


The service Facebook provides through their website is awful. I have no reason to use it, and have tried repeatedly only to be beaten back by their incompetence and even apparent malice. So maybe their graph is the best, but what are they really doing with it?


Doesn’t need to be a better graph, it needs to be good enough to grow.

Most FB users probably aren’t “power users”.


Facebook jumped the shark when they started trying to encourage private individuals to “create engagement” and pay to boost their posts. If internal marketing jargon is leaking into your UX, you clearly have serious problems with how your staff are being incentivised.

Facebook could have become an engine that allowed society to maximise human capital and but they sacrificed all that potential at the altar of growth hacking and bleeding advertisers dry.


I remember when that first came out, and was based on how many friends you had. It would have cost me $90 to promote my vacation photos to a group of people semi-randomly selected by Facebook and chance from my friends list, and for people with more ‘friends’, they wanted up to $500, if I recall.

Socially, it is extremely out of touch to even offer such a service to individuals.


Given how they started, I don’t think the shark was ever unjumped.


Facebook users can't boost their own posts, only a Facebook page owner can boost a post made as the page.


Having a better service, at this point wouldn't mean that Facebook would fail.


Being compared to the tobacco giants is one of the business world’s more toxic insults, but it is not the only unflattering analogy circulating. A lower blow is the suggestion that Facebook may become like Yahoo, the once high-flying internet firm that plunged.

The article is by The Economists, but I tend think the societal costs outweigh the financial to shareholders and employees.


If you look at TE's content and editorial agenda, they take a very much larger view of their remit and the role of economics in society than just finance.


True.


There is more to analogy with big tobacco. Facebook is used exactly ina way that cigarretes are used. People at work or during commute look at Facebook instead of taking a cigarette break. And then they go back after their business.

As more and more democracies realize that Facebook and the likes are toxic for them [1] (democracy is people taking informed decisions not 'engaged' decisions) Facebook will get regulated just as smoking. Which means banned.

And people will move on to healthier alternatives. And Zuck will probably end in jail or under heavy litigation for beeing complicit in so many crimes. This is just beggining now.

[1] - funny that Russia and China realized what Facebook really is right away years ago and banned it or used to their advantage. But to 'free' countries it is always profit above social consequences.

As Lenin remarked - 'Capitalists themselves will sell to us ropes that we will hang them on'


The idea that Zuck will end up in jail is laughable. Laws don't apply to the ultra-wealthy.


This victim mentality (we are victims of the immune rich) is not helpful to society, especially since it isn't true. Bernie Madoff and the Enron executives absolutely were prosecuted. But you have to actually break the law to go to jail in the US. Being immoral and unethical, being sociopatic and manipulative isn't illegal. Those characteristics aren't limited to rich people, either, they are just the most visible people.


Facebook is not Yahoo — it's much more like Windows. It's ubiquitous, everyone has their pet peeves, and the actual user communities are wildly heterogenous yet tech commentators tend to assume they themselves represent the only kind of user that matters.


Windows doesn’t have true competition. Facebook has. Even if they’re clever and buying lots of it. Still, Instagram has nowhere near the amount of neatly categorized personal data as Facebook which is interesting.


> Windows doesn’t have true competition. Facebook has.

Care to elaborate? I can't think of anyone.


This is usually where someone confirms your original point by saying Mastodon.


There is obviously in human nature to communicate with others, and share whatever they think is good, while maintaining a certain level of privacy. In real life, this is already happening and it works.

However, this must not be captured by an entity who's sole target is profit, neither a state owned entity. Both will hamper the communication at some point, either by manipulating or censoring information.

My only hope is that a benevolent AI will coordinate this, having prime directives not to harm humans ( by the means of interfering with the communication ).

EDIT: some typos, and also mentioning that the affirmations from above should be read in the perspective of Facebook disappearing/dying and being replaced by something else.


>However, this must not be captured by an entity who's sole target is profit, neither a state owned entity.

>My only hope is that a benevolent AI will coordinate this, having prime directives not to harm humans ( by the means of interfering with the communication ).

It would have to be some kind of public infrastructure, if you want to avoid the profit motivation. I don't see how an AI would solve this.


> My only hope is that a benevolent AI will coordinate this, having prime directives not to harm humans ( by the means of interfering with the communication ).

Mmm...who's going to write that benevolent AI? :)


FB keeps pestering me with messages about boosting past posts (Unlike before, I rarely post, last one is from a week ago). This pestering has intensified lately. I'm sure this gossip board will one day die, if it not dying already.


Im not seeing much correlation between these two companies besides industry. FB is getting bad press sure, but this is nothing like the beginning of Yahoo's downfall, which started with its cluster-F of a homepage and lack of grit or sense of cool in literally any of its products, and ended with super shit management. Yahoo made complicated the tech that needed to be simple. FB has entirely different problems, one could argue they are good problems to have and that bad press is better than no press at all.


FB is failing because it’s old now and no hip millennial wants to be seen using the same social media web page as their mom. That’s why FB is falling as he core demographic for nativity that advertisers need to manipulate it has left. All FB needs to do is follow the millennials and buy up the services they decant to.


Millennials are 30-40 years old. If FB wants to be hip they need to go after gen z and beyond.


Now ads are around one-fifth of all posts that users see on Instagram, which is probably double what it was a year ago.

That's called "pulling a Myspace".

Facebook has reached the point that nothing above the fold is about my friends. Remember, sharing is spamming.


Facebook is dead. It's just taking a long time for this to become apparent.


There's around 2.23 billion active users you might want to pass that message on to.


Active users as a statistic reminds me of employment rate.

It sounds useful, but it's not really that useful, because it's not really measuring the interesting thing, it just sounds like it is.

For example, I think the stat you're quoting is monthly active users. If everyone used to engage with FB 20 times a day but now does so once a day (or once a week, or once a month) the active user count will stay the same, but the reality is very different.



I get that's closer, but it's still not that useful, because it doesn't actually capture how people use the software and whether that's changing.

People communicate with me via FB messenger, and I respond to them. Otherwise I don't use the app. Am I an active user?

Once a day I open it, realise it's shit and vacuous, and importantly my SIL (the only person I still use it to keep up with) hasn't made any useful updates, so I close it 20 seconds later (this one is me, fwiw). Am I an an active user?

I don't post anything, I just scroll through the same 200 friends I'd had for 10 years, with no movement or differing usage. Am I an active user?

I don't use facebook as a social tool, I have no friends etc, but facebook groups are used in my area to buy and sell things. The second people move to another site I'd happily move. Am I an active user?


    Am I an active user?
Yes

    Am I an active user?
Yes

    Am I an active user?
Yes

    Am I an active user?
Yes


That is a very nicely formatted response.

It--- at least to me--- proves my point that active user is not a useful metric, as all of those people have very different values and drive growth (or don't) in very different ways, and so have no use being clumped together.

We didn't even get to talk about differing user demographics or time, data by country, trends inside countries etc.


You could have made the same criticism about a magazine in 1965. They tout to advertisers how many “readers” they have and how readership is growing, and your criticism is “all I do is open it and flip through the pages; I don’t _read_.”

Your value is not in reading the articles but in viewing the ads. For FB display advertising, you opened the app and viewed ads. Eyeballs captured! Value unlocked! Sure they’d rather have you spend 5 hours on the site, but even your slight attention is valuable.


That's like saying 'pounds' is not a useful metric because it does not tell you 'pounds of what'.


What weighs more, a pound of lead or a pound of feathers?



Pretty sure OP is a passive user, and is extremely susceptible to better tools for OP's needs coming along, eg: the current crop of buy/sell/trade apps/PWAs out there.


There's no such thing as a passive user to facebook through. There are accounts with no activity at all and are simply dead, and accounts with activity. That's it. An active user is simply an account that it still used from time to time. The point is the metric tells you nothing about how it is used.


I think a better metric would based on actual user behaviour rather than a simple count. For example, the number of posts or comments across the network, or the number of friend requests sent (new connections made). I still use Facebook quite a bit, but I've definitely become more of a consumer than a participant - I don't think my own status has been updated in months. It's basically become YouTube/Reddit, but with content based on people I actually know rather than what's popular.


Yeah, but it's really a matter of time. Facebook has become the social network for grandmas and aunties.

Facebook has expanded to new countries in the last decade which has brought these millions of users, but younger generations in countries that have had Facebook for a long time are not using it anymore.

In the US most Facebook users are between 25-34. There are barely any teenagers.

https://www.statista.com/statistics/187041/us-user-age-distr...

This trend is a bit less pronounced in global demographics, but I think it's clear that younger generations don't like Facebook.

https://www.statista.com/statistics/376128/facebook-global-u...


Most developed countries have populations that continue to skew older: https://www.census.gov/library/visualizations/2018/comm/cent...


Yes, but teens are using other platforms than Facebook:

http://www.pewinternet.org/2018/05/31/teens-social-media-tec...


Staking your claim on what teenagers today do today doesn't make much sense to me because teenagers get older.

Facebook just has to be the social network people end up on.

I'd at least look at college-aged people, not the weird, limited social life of high schoolers.


Maybe. Time will tell.


Google+ has 3.3 billion profiles and 7.9 million Communities.[1]

If they stop showing up, it really doesn't matter.

MUAs are better than static profiles, but if the motivation is fear or guilt, rather than active affinity, the connection is tenuous.

________________________________

Notes:

1. I counted them: https://old.reddit.com/r/plexodus/comments/9zx67d/google_com...


The people who should on Facebook aren't there any more - the young and the influential

You can't grow with an audience base filled with 50 year olds.


They are using Instagram instead which is also owned by Facebook.


You can't grow when you have onboarded most of the world with access to internet. (total users is 2B. When they are not even in China)


Facebook can still grow its revenue even if the number of users is constant if: (a) Users become richer over time; (b) Users spend more time online; (c) Facebook can improve the algorithm that matches ads to users


What matters is the DAU or daily active users. I'd be willing to bet that number is dropping.


https://www.statista.com/statistics/346167/facebook-global-d...

I honestly don't know the quality of data that statista produces, so take it with a grain of salt. The curve does appear to be dimming towards the end of Q3 '18, but it certainly doesn't appear to be as dire as people make it out to be.

I think there's a heavy dose of IT-industry echo chambering going on here to be honest.

Point of interest: I severely dislike facebook, so not trying to justify anything on their behalf. I just don't see the idea that "facebook is dying" among any peers in any social circles I'm part of. I do wonder if it's different in the United States.


> What matters is the DAU or daily active users. I'd be willing to bet that number is dropping.

I think what really matters is something like user actions/day. Anecdotally, Facebook engagement seems to be growing down but perhaps not yet in a way that would show up as a DAU drop (which I assume counts someone with even the barest interaction with the site as "active").


Is that with or without the bots?

It wouldn’t surprise me if the real number was under a billion. Which is still a big number but it means growth was over along time ago.


They are all old. Facebook will probably still be functioning for the next 40 years until it's users finally die and then it's over.


But Instagram users aren't, and there's nothing stopping Facebook from buying whatever the next generation of youth start using to replace Instagram when its time comes.

The question is can they make enough cash to make the model perpetual.


> there's nothing stopping Facebook from buying whatever the next generation of youth start using to replace Instagram when its time comes.

Hopefully antitrust law will stop them, because with a behemoth like Facebook buying up every new, exciting social network real innovation, especially in monetization, will continue to be a myth.


https://www.statista.com/statistics/376128/facebook-global-u...

> They are all old.

It doesn't appear to strictly be the case.


They might be all old in US and Europe. But in India and other third world countries Facebook seems to be doing OK with young people.


Facebook makes far more money per user in the US or Europe. Third world activity won't be able to make up for the revenue drop if the bottom falls out of Facebook's first world properties.


So, basically Facebook still has a lifetime at least an eon long in tech years? The World Wide Web is not even 40 years old yet.


I've been telling people for years that FB is the next AOL or Yahoo. The writing has been on the wall for most of this decade to be honest. In fact, some of my first posts on HN were about this. I should apply to YC...got nothing to lose, everything to gain.


> Facebook could end up paying dearly for mediocre employees to stay on (as its share price falls, it has to hand out more in stock-based compensation to keep people).

Does this passage make sense? With a high flying stock, Facebook would be paying more for mediocre employees while the rsu’s vest than if their stock is lower. If Facebook increases rsu’s to even out the employee’s comp, then the net cost to Facebook will be the same at the lower stock price.

Their only risk is if Facebook’s stock starts appreciating again and they are on the hook for more rsu’s at the higher price.


I think it does, because with many of these companies you're granted X shares vesting over 4 years and if the share price causes you to drop below your total "target comp" they issue you more shares to make up for it, so it's an additional grant out of FBs pocket.


But Facebook takes the expense when the rsu’s vest.


Plausible or not, it was a little surreal seeing Facebook advertising on television this year. I mean, isn't Facebook, and social media in general, supposed to be "post-television"? ;-)


It's remarkable that Sandberg is being thrown under the bus for not doing enough to stop Donald Trump from being elected.

What she is (in hindsight) expected to have done is to have insisted that Facebook's news feed algorithm be used as a content filter to suppress stories promoted by politically marginalized groups.

This is much the same way China's government uses its Great Firewall to control which information reaches the people.

During the civil rights era, the Soviets supported the work of Martin Luther King. In the modern world, Russia supports certain third party views and anti-establishment perspectives, for obvious reasons, just as the US supports pro-Ukraine groups and other fringe political groups that are in close orbit to Russia.

So we are being told that Sandberg failed to utilize the firewall capabilities of Facebook to suppress anti-establishment content. We are told this is a big deal because Russia-linked entities spent money to promote some of the ads. Keep in mind the total spend by Russian-linked entities (could be NGOs, private citizens, oligarch-funded research institutes, etc.) was a miniscule $150K in an election with total funding approaching $2B.

Yet Sandberg may be relieved of her position because she failed to anticipate how such a small spend could dramatically influence the outcome of the 2016 election.

News flash: It didn't. There are a lot of reasons to be concerned about some aspects of Facebook -- my #1 concern is the extensive use of dark patterns designed to make people over-share -- but the "not doing enough" critique is complete bunk.

It is 100% motivated by political partisans in the US who unfortunately have a great deal of influence in possible regulation of Facebook and have made it very clear that they plan to use all of their power to force Facebook to act like the well behaved Great Firewall they want.

To be very clear, politicians want Facebook to be used at their bidding as a Great Firewall and they very much want to see certain views suppressed and others amplified. They also want to (and already do) use the massive amounts of metadata held by Facebook, Google, etc., to supplement whatever data they have when investigating Americans, who may or may not have committed a crime. It is, essentially, a transparent social credit system for US officials to use at their whim.

So the only difference between Facebook as politicians want it to be used and China's Great Firewall is that Facebook exists a bit higher up the protocol stack and its censorship/suppression is much more laser-focused and harder to detect.


$85,000 on Facebook ads. Surprisingly small amount, that.

https://www.washingtonpost.com/news/politics/wp/2018/05/10/w...


Thanks for the correction.


Article is quite wrong: the FB is an ad platform with at least the longevity potential of mainstream TV channel's.


I hope so. I hope FB fades into oblivion too.


In all likelyhood this is a “submarine” article crafted by a PR firm like Definers for a hit job on Facebook: https://news.ycombinator.com/item?id=18511963

There are plenty of short sellers who would benefit from FB’s plummeting stock. In reality, FB’s DAU/MAU are largely unchanged. The stories that young people “deleted Facebook” were downright falsehood. There is simply no viable competition for Facebook in market right now like what Yahoo had in terms of Google.


> there are plenty of short sellers who would benefit from FB’s plummeting stock

This is a weird meme that’s cropped up in tech circles over the past few years. It’s misleading and incorrect.

No short selling fund sells short and then secretly seeds negative PR pieces. If you’re short, your argument is always strengthened by disclosing you put your money behind your words. Short sellers hire private investigators, commission research and occasionally take out ads against companies. They do not put out hit pieces—it is too inefficient and expensive.


You are naively wrong. Every single major short seller uses massive media drive to compliment their billion dollar bets. Turn on CNBC and you will see them in opinion panels all the time. They often leverage everything from editorials to articals that are just undercover FUD spreaders in disguised as analysis. There are tons of websites where you can just look at headlines and you know this is coming from big shark who just put a major bet. Remember constant daily stream of articles on how Tesla will fail, it’s unfixable and is running out of money? Do you really think journalists were writing all that up in unison?


How can you be sure about this?

Disclosing the existence of a short makes people doubt the bias in every piece of information you bring up.

Keeping a position secret might be more effective than disclosing. I know when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility.


> How can you be sure about this?

It’s not a hard and fast rule. Just one enforced by economic interests.

> when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility

You aren’t the target. Current shareholders are. Short-seller messaging is almost always primarily aimed at current long holders. (Since short sellers depend on long holders as a source for borrowed shares, a relationship which isn’t reciprocated in long holders needing short interest to make their investments work, inducing more shorts isn’t a feasible strategy.) The message shows bias from the position, but as an investor, someone betting on their message is more material than the bias. They decided, after all, to bet on the message before they themselves were biased.

(When long holders aren’t the target, regulators are. This was the Herbalife strategy. In those cases, too, a broad PR strategy is too expensive relative to the desired results.)


In all likelihood, since this is The Economist - you're wrong.


> There is simply no viable competition for Facebook in market right now like what Yahoo had in terms of Google.

I don’t know if it’s your argument for the decline of facebook being false, but it doesn’t have to come from competition or viable alternatives.

People stopping doing something happens all the time, companies going down because of decreasing interest in their service is a normal thing.


Which companies of Facebook's size and dominance have gone out because people simply stopped using them? The demises of Sears and Toys R Us were huge news, despite the obvious fact that they had long been beaten by competitors.


For companies the size of facebook, it usually comes with disrupton of the whole industry making incumbants obsolete when people flock to the new behaviors.

That’s in part what happened to Kodak / Polaroid, or Blockbuster, ot Blackerry / Nokia. That’s not competition per se as other companies aren’t chalenging the incumbant, it’s the whole landscape that changes.


None of the people my age that I spent this past evening with (barring my own brother) were still using facebook. An account exists for all of us, but when its gone months or years without use, and there is no Facebook app on your phone, I'd say that user is lost.


Sample of 1 is not statistics. DAU and MAU are statistics.


Because someone writing for the economist would know more about internet history than zuckerburg and the people running facebook.

Why is there so many facebook propaganda crap everywhere now?

Everyday without fail, you can expect a few here. If we had real journalists in this world rather than propagandists, that would be an interesting investigation and article.

Why is the entire media/propaganda apparatus from the nytimes to the economist spanning both sides of the atlantic spamming non-stop propaganda about facebook?


because they're being slaughtered by new media like fb and google that takes their ad revenue.


I find it funny how people treat companies. To me the Yellow Pages, Yahoo, and Facebook are all almost the same 'thing' for a lack of a better word.




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