What Zuckerberg’s Testimony Really Tells Us
Well, well, well, we meet again. For those of you who don’t know, Mark Zuckerberg entered the lion’s den A.K.A. congress a couple weeks ago. What was a highly anticipated bout between one of tech’s most successful entrepreneurs and the lawmakers in the United States, turned into a magnifying glass on the lack of knowledge the government has surrounding this issue.
For those of you who watched, listened, or got a seemingly comedy-like highlight reel showing up on your news feeds, it really blows my mind how a country can expect to effectively regulate an industry that they very clearly don’t understand.
I think a lot of it stems from the fact that we all take Facebook for granted and forget that it is a business that has to make money. This seemed to be a point that confused a lot of senators, as they were consistently questioning Facebook’s business model and how they can expect to sustain a profitable business if they want to provide a free service.
I am not sure about you guys, but I have personally boughten products based on social media ads (Facebook and instagram in particular), and the reason I was able to see those products is because Facebook makes the ads relevant to us. This is something Zuckerberg alludes to in his testimony. If Facebook didn’t utilize information, we would all get annoying ads that are not relevant to us and would decrease our satisfaction of using the platform.
Ultimately, as reported, Facebook’s employees were celebrating of sorts over the lack of preparation congress did prior to the Zuckerberg testimony. I think it shocked the nation that the governing body of the United States, who is proposing to regulate the tech industry, truly doesn’t understand the first thing about how it operates.
How can we expect them to effectively and productively regulate an industry in which they don’t even understand it? You can’t. Mark Zuckerberg went in nervous and came out confident as ever.
Finally, I think this point needs to be made that if a subscription based option for facebook was introduced, so that we could experience an ad-free Facebook platform, no one would care. In my opinion no one really cared that they saw ads, or that facebook had access to their information prior to this scandal. I think people love to feel like they are part of something. Should Facebook have access to phone records, text messages, etc.? Absolutely not. However, any information provided to Facebook intentionally stays within the confines of Facebook itself. To sell it, or do anything else other than use that information to build algorithms to appropriately and effectively target ads for their clients, would be the end of Facebook’s business model.
As my final point, let me explain myself. Roughly 98% of Facebook’s revenue comes from ads. This accumulates to roughly $40Billion last year. If they decided to sell your data, or deliberately allow 3rd party sources to gain access to your information, their entire business would fall apart, because they only make money if people want to advertise using their platform and they have that competitive advantage because they have your data. So, if they were to sell your data for a one-time payoff, their business would not exist in 5 years, because everyone else would utilize all of your data to target you through other means, instead of paying Facebook for it.
I think they made a mistake and need to be more careful going forward, but what’s done is done. We need to hold them accountable for their actions.
I hope this was somewhat insightful and gave you a different perspective on the matter. I know I haven’t been as consistent as I would like with these blogs, but hopefully can do a better job of keeping to my schedule in the future. Thank you for your love and support.
Till next time, read between the lines.
