Why Facebook is dumb.

As a millennial (I dislike the overuse of the word but there we are), I have been fortunate enough to witness the growth and adoption of all major social networks of today, along with experiencing the shifts in usage & market share. Within my lifetime, Facebook has acquired two of the largest social networks on the planet: WhatsApp and Instagram, for $19b and $1b respectively. Both acquisitions have been highly successful, and both were very worthwhile moves from Facebook. This article discusses where Facebook has made some otherwise foolish moves with seemingly major gaps in due diligence and foresight.

Dumb.

In 2011, Facebook released the standalone messenger app. At the time, smartphones still didn’t have the power of today, mobile broadband speeds were pretty woeful and data quotas were much lower meaning that the rapid download of content was not necessarily possible on mobile. It was therefore correct for Facebook to introduce a product to cater to these users (and for competitive advantage). Soon however, Facebook did the incomprehensible, by completely detaching the messaging function from the Facebook app altogether. This move relied on people still enjoying the “newsfeed”; a part of Facebook which contains general news, and their advertising platform. Because of the transfer, I, with my peers, now only use the Facebook as a planner for events and sometimes as a dump for sharing photos: two functions that are not properly monetised currently. Why you may ask?

The answer is simple: the vast majority of Facebook content is noxious, with comedy being unfunny, news being untrue and a large amount of the community being toxic. Furthermore, monetised Facebook videos have adverts half the way through, which if the content is not good enough to warrant it, puts people off the app altogether. For me, Facebook now is just an interactive Daily Mail along with their reader base (for any foreign readers the Daily Mail is a tabloid masquerading as a broadsheet often with a racist & discriminatory agenda within the articles). The resemblance is uncanny, even down to their nudity policy. At least in a real tabloid, there are a bare pair of tits to reassure you of its sincerity.

This lack of engagement on my peers part has been accelerated by better ways to share relevant content:

• Twitter is used for pushing agenda, comedy and sharing general shittery, with a character limit stopping people lecturing.
• Snapchat is used for sharing day to day moments and casual photography/videography in the form of time limited “stories”. It is a much less intrusive way of sharing your life since it is not commoditised with likes.
• Instagram has a primary casual photo sharing function, so there is no guilt/vanity induced when posting on it since it has no other use.

Facebooks sole function for me now is simply a smart address book - something much less valuable then it (and its $500B+ market cap) touts.

Not Dumb.

Facebook last month recognised the sentiment of people like me, and have announced that they are now overhauling their news feed to expose users to more relevant content. This includes a reduction in exposure to posts from businesses which was announced by their CEO Mark Zuckerberg. This is smart: although it will reduce revenues, it will deflate the bubble in the value of FB that was starting to develop, since it should make FB users engage with the app more.

Facebook has managed to dent its competitors hugely, proving that it still has potency. The addition of features incredibly similar to Snapchats genuinely damaged Snapchats usage report and sunk their share price.

Aside from WhatsApp and Instagram, Facebook has also made some pretty interesting acquisitions, including AI, VR and facial recognition companies. This should keep them relevant for the foreseeable future.

The smartest thing about Facebooks acquisitions is that despite them being in the news, people forget about them. I have met multiple people that use WhatsApp because they “don’t like Facebook” because of the Big Brother conspiracies surrounding their data collection and access. People actually use Facebook owned products to get away from Facebook. Seriously.

Is it too little too late?

I personally think FB as an interface is too serious to win millennials back over. Not to worry for them though, they have enough capital to simply buy the trends. The only issue with that however is the assumption that they are the biggest fish in the water. Not so.

Companies like Tencent pose a real threat especially with the agenda of the Chinese government - obvious censorship of mainstream digital services allowing the birth of copycats that can be sold to the Chinese people with the compliance of surrendering data to the Government. They are able to slipstream Facebook in research and development, picking up on any successful trends they generate, and then can pretty much exclusively sell it to the 1B strong Chinese population - over 1/8th of the world population.

Conclusion.

Overall, Facebook as a holdings company will no doubt be highly successful so long as there isn’t a repeat performance of what is starting to happen on their original platform. If the Facebook platform really does start to die, I think we would really have to question the entire organisation, since they would essentially be poisonous to anything they touch. If they are out of touch with millennials, either they do not have a good diversity of ages at the top, or Zuckerberg is surrounded by yes-men, and Facebook is basically designed for people like him. This all might sound outlandish, but it is clear cut - people his age use Facebook, people my age don’t.

But I don’t own a $500b company.