That’s Where the Money Is
Facebook’s troublesome and troubling ambition…
I’ve always loved the story about a reporter asking Willie Sutton why he robbed banks. “Because that’s where the money is,” was his famously pithy reply.¹ It’s a great reminder not to overlook the obvious. Sometimes, perhaps even often, things really are that simple.
I’ve found myself thinking about this quote once again in the aftermath of the Facebook/Cambridge Analytica situation. “Situation” is the nice way of saying “shitshow”. Which, make no mistake, this very much is. How bad are things? Full-page ad apology bad.
But whereas last week we saw a whole range of people at Facebook kept putting their own feet in their mouths over and over again, the factions have seemingly united to ensure just one foot is being put in one mouth — those belonging to Mark Zuckerberg himself.² And so the interviews were given.³
But let’s take a step back from the atonement for a moment. While Zuckerberg wants us to focus on the “how”, the question of “why” seems far more interesting. A few lines of thinking here — first, here’s John Gruber’s commentary around my post about Facebook having lost the plot:
I don’t think they ever had the plot. They got away with their utter disregard for the privacy of their users from the get-go — literally from the time when Facebook’s entire userbase consisted of 4,000 gullible students at Harvard. It’s just taken a long time for public opinion to recognize and react to their institutional sociopathy. Facebook thought no one cared, but what was really going on is that no one (well, very few) realized the extent of what was going on.
Next up, here’s James Allworth:
For the longest period of time, Facebook was an advertising business that dreamed of being something else other than an advertising business. It wanted to be a platform.
Lastly, one of Ben Thompson’s daily updates from last week:
To my mind, scale is the key here: with the Graph API Facebook was positioning itself as the center of everything — it would give its data to whoever wanted it in exchange for their data, which would result in everyone having Facebook’s original data plus their own data, and Facebook having the data from everyone. It’s not that user data isn’t a competitive advantage; it’s that having *all* the data is an even bigger one.
I do still think my analysis stands as-is for Google, but that goes back to the point I made in the first section: Google’s place in the value chain makes it inevitable that the most valuable data flows in their direction. Facebook, on the other hand, was built on top of an exclusive data-generation machine, which it was willing to use as currency to get more. That it perhaps ought not to never seemed to have occurred to any of Facebook’s decision-makers; it seems it still hasn’t.
I think these three ideas tie a nice ribbon around the “why”. Facebook did not set out to build an advertising network.⁴ As such, once they were comfortable with the social network itself, they set out to make it a platform — a social fabric interwoven into the entire web. And it’s easy to forget now, but it almost worked! How many services did you sign up for with FB Connect? How many Like buttons have you clicked over the years?
But then Facebook realized what their business was. And what a business it was! Unfortunately, it meant cutting those social fabric threads and doubling down on what was working: the feed. Remember how Facebook fell on its face because they decided HTML5 was the future, not native mobile code? And then they had to fall back and double down on native. Facebook Paper? Facebook Home? In case it’s not clear, Facebook does this a lot.
And in this particular case, that ambition has gotten them in trouble. Actual trouble. But unlike Gruber is implying, I don’t think this was nefarious in nature (young, dumb Zuckerberg messages aside). But I do agree that they perhaps never really had the plot, in so far as the plot was an advertising-based network. Even now, Facebook undoubtedly just views this as a way (the way) to pay the bills. But the ambition remains to do something greater.
And so Zuckerberg’s apology is less an apology and more an explanation. Because he clearly wants to retain the permission to keep going after these ambitious goals. Read it for yourself in his Q&A with Wired:
The good news here is that the big actions that we needed to take to prevent this from happening today we took three or four years ago. But had we taken them five or six years ago, we wouldn’t be here right now. So I do think early on on the platform we had this very idealistic vision around how data portability would allow all these different new experiences, and I think the feedback that we’ve gotten from our community and from the world is that privacy and having the data locked down is more important to people than maybe making it easier to bring more data and have different kinds of experiences. And I think if we’d internalized that sooner and had made these changes that we made in 2014 in, say, 2012 or 2010 then I also think we could have avoided a lot of harm.
He is sorry — sorry that Facebook didn’t move fast and break things quicker. And I believe now, sadly for him and Facebook, the blank check to have such ambition has been rescinded. Facebook won’t fail — it is too big to fail — but the era of experimentation is over. Facebook is and will remain an advertising network. One that needs to be fed an increasing amount of data to keep growing. So I’ll let you connect the dots as to where we go from here…
But per above, I fully expect Zuckerberg and company to fail to realize this reality. In other words, I would not bet against them fucking up again.
The good news (for Facebook), is Instagram. And WhatsApp. In other words, the company has done an amazing job acquiring companies that could become the “next Facebook”. And because they’re run separately, the public will be more lenient when it comes to moving fast and breaking things on those networks. And so that’s what I expect to eventually become the focus.
It shouldn’t be lost on anyone that the exact thing which made Facebook a success — rapid (some might and should say ‘reckless’) experimentation and iteration — is the very thing which landed Facebook in this spot. And while Zuckerberg thinks they could have moved faster to outmaneuver the issues, this was always going to happen at some point.
It’s because Facebook is what it is, their ambitions be damned, and their ambitions damning them. Facebook is an advertising network. Why? Because that’s where the money is.
¹ Nevermind that Sutton denies saying it, the anecdote took on a bigger meaning and became the basis for Sutton’s Law.
² Though a special shout-out goes to this “Fact Check” blog post written by an unnamed person from within the Facebook Newsroom. Once again, what a stupid way to frame a response given everything that’s going on…
³ Shout out to Dave Pell’s line on the ridiculousness of these interviews:
Facebook is constantly urging you to share your immediate thoughts and reactions to every life event. We were a couple days into the company’s biggest challenge before Facebook’s creator shared any of his thoughts on the matter. There’s probably a lesson in that.
⁴ Neither did Google, by the way. Because who would set out to build an advertising network? Well, some people do, sure. But the best advertising networks clearly start out elsewhere. See: above.
