• Digital Detangler

Facebook's Rock and Hard Place


A couple weeks ago Facebook stock shed billions in a single day(1) following lower profit predictions by investors. This is in the wake of a smaller 40 billion dollar loss related to the Cambridge Analytica scandal(2). Why is the company struggling so much lately?


We’ve Decided Facebook is Responsible for Things on Facebook

For a long time, users cut big tech giants slack for weird stuff that showed up on their platforms. After all, Facebook didn’t create the content in the first place. The tech giants stuck to keeping porn off the platforms, and that seemed to be enough for most people. Then things changed. The Russian interference in the 2016 election fundamentally shifted the way we view platforms. Cambridge Analytica’s purchase of data generated on Facebook’s platform cemented frustration over the company’s lax permissions policies.

There is some evidence that Facebook has begun to take misleading content more seriously. A couple days ago, with Apple, Youtube, and Spotify, the platform removed content generated by Alex Jones of Infowars conspiracy theory fame(3). Clearly these companies are beginning to take their content moderating responsibilities seriously. The quagmire they are in is that in 2018 all things are political things. Even though Alex Jones is off the deep end, he is conservative, off the deep end, which allows critics of the move to call it liberal censorship. Damned if you do, damned if you don’t.


Their Bottom Line is Almost Entirely Dependent on User Eyeballs

In Q2 of 2018, 99% of Facebook’s revenue was from advertisers(4) paying the platform for access to users’ attention. Being that heavily invested in the attention economy makes them particularly vulnerable to users using their platform less. As studies begin to link their product with lowered wellbeing(5), they have a big problem on their hands. They can’t have people using their product less (because users will see fewer ads), but they can’t have people using their product more (because it seems like they don’t care about the mental health of users).


So, what do you do? You introduce opt-in tools for managing your overuse of the platform(6). Facebook and Instagram—owned by Facebook—will now show you how much time you spend on the platform. Then, if you care to, you can now set a max time you want to spend on the platform. It doesn’t stop you from staying on; it just notifies you that your max time is being exceeded. Most users won’t set a max time, and those who do will likely blow right by that notification.


Instagram also had its own feature introduced. Instagram’s feed used to be chronological(7)—scrolling down meant going back in time. But in 2016, they changed it to an algorithm-based feed at least in part to keep you from figuring out whether you’d seen all the new stuff. Seeing content you saw yesterday—on a chronological feed—tells you you’ve seen it all; you can put your phone away. Facebook never wants you to get that signal—they have billions riding on it. So, they introduced a feature called “You’re All Caught Up” to give users that signal in a less obtrusive way.

While all of this is bad news for Facebook, it does send us users a hopeful message: tech companies aren’t so powerful that they can’t still be affected by changes in user sentiment. The question going forward will be whether or not these changes are enough to placate users back into hours and hours of scrolling.


Footnotes

  1. Sharma and Vengattil, “Facebook Heads For Biggest One-Day Wipeout In U.S. Stock Market History.”

  2. Nuñez, “Facebook’s Latest Scandal Knocked $40 Billion off Its Market Value.”

  3. Hern, “Facebook, Apple, YouTube and Spotify Ban Infowars’ Alex Jones.”

  4. “Facebook Reports Second Quarter 2018 Results.”

  5. Shakya and Christakis, “A New, More Rigorous Study Confirms.”

  6. Ranadive, “New Tools to Manage Your Time on Facebook and Instagram | Facebook Newsroom.”

  7. Vincent, “Instagram’s ‘Caught up’ Feature Nudges Users off Their Phones.”

References

  1. “Facebook Reports Second Quarter 2018 Results,” July 25, 2018. https://investor.fb.com/investor-news/press-release-details/2018/Facebook-Reports-Second-Quarter-2018-Results/default.aspx.

  2. Hern, Alex. “Facebook, Apple, YouTube and Spotify Ban Infowars’ Alex Jones.” The Guardian, August 6, 2018, sec. Technology. http://www.theguardian.com/technology/2018/aug/06/apple-removes-podcasts-infowars-alex-jones.

  3. Nuñez, Michael. “Facebook’s Latest Scandal Knocked $40 Billion off Its Market Value.” Mashable, March 19, 2018. https://mashable.com/2018/03/19/facebook-40-billion-market-valuation/.

  4. Ranadive, Ameet. “New Tools to Manage Your Time on Facebook and Instagram | Facebook Newsroom,” August 1, 2018. https://newsroom.fb.com/news/2018/08/manage-your-time/.

  5. Shakya, Holly B., and Nicholas A. Christakis. “A New, More Rigorous Study Confirms: The More You Use Facebook, the Worse You Feel.” Harvard Business Review, April 10, 2017. https://hbr.org/2017/04/a-new-more-rigorous-study-confirms-the-more-you-use-facebook-the-worse-you-feel.

  6. Sharma, Vibhuti, and Munsif Vengattil. “Facebook Heads For Biggest One-Day Wipeout In U.S. Stock Market History.” Huffington Post, July 26, 2018, sec. Business. https://www.huffingtonpost.com/entry/facebook-braces-for-stock-wipeout_us_5b59d4f7e4b0b15aba9618df.

  7. Vincent, Brandi. “Instagram’s ‘Caught up’ Feature Nudges Users off Their Phones.” NBC News, July 11, 2018. https://www.nbcnews.com/tech/tech-news/instagram-s-caught-joins-movement-set-limit-screentime-n890771.

© 2019 by Digital Detangler.

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