Check out this revealing and telling documentary about the last year of Netscape before its AOL acqusition.
Sunday, July 26, 2020
(The Big Disrupt) Facebook: Why TikTok is the Least of Facebook's Problems
Facebook has many enemies and few friends but has largely been able to escape the fate of companies before them with who inspire more hate than love because of the unassailable position in the digital ad space but of with the impressive and swift rise of short form video app TikTok, it’s the first time in a while that Facebook is faced with a threat it can’t easily dismiss.
There are a number of things that make TikTok a formidable competitor in the digital ad space from its large and young audience, it’s rapid growth to its expansive ambition but what really makes TikTok dangerous is its Beijing based parent company, Bytedance. In hindsight, Facebook has been incredibly lucky in its rise to prominence as it has managed steal a march on Myspace as it self-imploded, blow past a popular but poorly run Twitter and outright copy and stunt the growth of a promising but outmatched Snapchat. Along with some of smartest acquisitions in the last decade in WhatsApp and Instagram, the Menlo Park giant along with Google has managed to secure a duopoly over the digital advertising marketplace for the best part of a decade.
However, in Bytedance both Facebook and Google face a company that arguably poses the most dangerous threat both companies have faced in a while (we can make the same “more luck than skill” argument for Google’s rise to dominance).
All companies have to deal with competition but looking closely at Facebook, the social media giant looks extremely vulnerable and has for years. Even as Facebook ruthlessly dealt blow after blow to snapchat’s business, it showed a certain weakness of a company that’s seemingly couldn’t compete with snapchat technically and offer original features or appeal to its younger audience and build a more compelling alternative from scratch. Recent years of scandal has had a debilitating effect on the Facebook which has seen it shed top executive talent including the founders of WhatsApp and Instagram who even have made their reservations of the product and the company public.
Facebook tried its copycat strategy to undermine TikTok with the release of Lasso in late 2018 but twenty months later shuttered the app and has elected to try the same trick rolling out TikTok inspired features on Instagram and plan to roll it out in 50 countries. Only time will tell if this strategy will work but it speaks to Facebook’s inability to affect TikTok rise directly.
However, as mentioned before, TikTok is the least of Facebook’s problems. Bytedance, unlike past competitors, is well run, backed, popular (with its large and growing user base at least) and extremely ambitious. The company is already ruffling very formidable feathers in its homeland with Bytedance effectively breaking up the Alibaba, Baidu and Tencent (BAT) Triumvirate dominance over the Chinese digital advertising market with its explosive growth.
Bytedance now has the US in its sights and Facebook already looks like that knows that it faces a foe that isn’t going away. There has been reports of Facebook internally being worried by TikTok’s growth and no wonder as they’re witnessing Bytedance win over key blocs Facebook has ignored or strained over the years and even today. Facebook currently finds itself the subject of a large ad boycott of its own customers that could extend into august and Facebook’s response to it has been complacent to say the least with Founder and CEO Mark Zuckerberg confidently predicting “these advertisers will be back on the platform soon enough”.
While we think he’s right as the reach and targeting opportunities Facebook offers to its customers is hard to match, it speaks to the deep-rooted problems that has a great business looking extremely vulnerable at the hands of a company that didn’t exist 8 years ago and that despite its success, is a speck of dust in the US digital ad space in comparison.
Bytedance’s only real weakness is that it's based in the wrong country at the worst possible time. Tensions between China and the US couldn’t be higher and with China squaring up with India, a longtime U.S. ally, over a border dispute, it's no wonder that TikTok has been subject to bans and other threats of expulsion in a number of countries allied with the superpower. Tensions between the US and China isn’t the only reason TikTok faces expulsion in the US and elsewhere as concerns over privacy and inappropriate content amplified by the exposure of its youthful audience to both issues.
Facebook, however, still struggle with similar issues to this day and a large part of why the ad boycott mentioned earlier exists speaks to the company long term failure to combat issues over privacy and content moderation.
In any case, whether TikTok/Bytedance are allowed to do business in US or are subject to similar treatment metered out to Huawei, Facebook must address its now potentially deadly aloofness and tone-deaf approach to dealing with controversies and seek to win over key blocs (in Facebook's case, advertisers, influencers, marketers, developers, publishers, content creators and rightsholders) or find its business under pressure it's never had to deal with.
In sum, Facebook must thank its lucky stars TikTok was founded in Beijing and not 4,742 kilometers west of the Chinese capital because if it was, we’d be writing about Facebook inevitable decline.
Sunday, July 5, 2020
(The Big Disrupt) Facebook: The Impossible Job – Why the boycott of facebook won’t be the last
The last two years has been (rightly) unforgiving for Facebook and with the recent ad boycott over the Menlo Park based company decision to keep president Donald Trump’s controversial post on its platform which heavily implied the use of force against protesters. The misery just keeps piling on.
However, don’t feel sorry for the $665 billion juggernaut as this has been coming for a company that’s no stranger to controversy particularly over its policies regarding content moderation, privacy and hate speech. Mark Zuckerberg isn’t breaking a sweat as he knows as well as we do that the boycott will blow over once July breezes by because while advertisers theoretically hold the power of the purse, Facebook offer to much in scale and targeting for advertiser to ignore and more importantly.
However, there’s a sneaking suspicion that Facebook maybe providing cover for its customers who were planning to cut ad spend anyway in lieu of the pandemic but one customer that won’t be cutting down their spending is one Donald Trump as he seeks to earn a second term.
In any case, a month without a portion of their customers spending money on ads on their platform won’t hurt Facebook financially with the loss of income will likely be a rounding error on Facebook financial statement the next time they report their earnings. However, in their defense, Facebook have the unenviable task of moderating the comments, postings, musings of 2 billion people so expect mistakes to be made.
Despite Facebook’s sizeable investment in AI research, the tools Facebook use to clean up its platform aren’t ready for prime time and with the pandemic pressuring companies into working remotely, Facebook’s AI tools to moderate content on its platform is going to suffer a baptism of fire.
But much of this is Facebook’s fault. Facebook, like it or not, has for some time been a prominent marketplace of ideas and has for years fought off the responsibility that comes with it which has seen the platform fail spectacularly at addressing issues such as fake news and propaganda that publishers and newspapers have handled better at least in comparison to their technologically sophisticated counterparts.
Much of the trouble Facebook finds itself in is because while it sees itself as a tech company simply serving personalized content to its users, its own users and wider public sees Facebook as what it increasingly is, a large but crowded marketplace where social progress or degradation is taking place in real time.
However, its attempts to avoid acknowledging just how much power it has isn’t the real problem. For us, it’s easy argument that of all the members of FAANG, Facebook is the worst run of the bunch. While the company is financially sound, recruits the best people, nurtures new talent and are more or less strong operationally, they’re extremely vulnerable in an area that can render these areas useless, morale.
No matter how strong a company is at managing its finances, recruiting and developing talent, developing new products and features, acquiring and retaining customers or warding off competitors, if the company has low morale, every advantage in these areas will suffer and eventually wither away over time.
Nothing kills a company faster than unhappy employees and Facebook over the last two years has waved to goodbye a number of key executives in amidst of damaging scandals, none more embarrassing than the Cambridge Analytica debacle.
Even in Facebook’s own internal survey, employees were honest enough to report their discontent with approval for the direction of the company falling 19 points in a year. While other members in FAANG aren’t exactly hubs of worker bliss (they’re not), the difference between them and Facebook (with maybe the exception of Google) is that much of the discontent in their companies is among employees that are replaceable.
There are a number of reasons why morale is ebbing at the company from the aforementioned scandals but the possibly the most striking is the leadership offered by founder, CEO and Chairman Zuckerberg. Founders are revered Silicon Valley but Zuckerberg’s entrenched power makes him and ultimately the company vulnerable to attacks that directly affects morale as the company looks less like a company chasing the noble goal to connect the world and more like an empire headed by a man who seems tone deaf by design.
In sum, Facebook has many enemies this ad boycott most likely won’t be the last but as the public protestations of employees, lawsuits and former executives indicate, the problem that’s eating at facebook maybe closer to home.
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