Comment by kryogen1c 4 days ago
Zuck is learning theres a difference between shallow short term engagement and deeper long term engagement. Who could have seen this coming, except literally everyone?
It's like a tragedy of the commons, except there's only one party destroying all resources for themself
They know, it's just that most of the people will be gone before the negative effects become apparent. Most senior people are only going to be around for 7.2 years so if they optimize for short/medium term benefits and cash out, the long term consequences won't affect them.
What makes you think “they don’t understand the interest they have to pay”?
They are optimizing for short-medium term profits. The people there in the early days pull the ejection code when the “interest” is due. The company coasts until some private equity runs the numbers and realizes the parts are worth more than the whole.
This is capitalism. You are using “interest” (a finance term) seemingly in a moral / ethical critique. If so, use a moral / ethical term instead.
Corporate valuation isn't about short-term thinking. It's actually all very long-term. Plenty of companies are not paying out all their profits to shareholders, and their valuation is entirely based on expectation that it'll happen in the distant future and the discounted perpetuity value will equal the initial investment, probably after the current investors are dead.
There are still plenty of vulture investors who find a way to trick the market in the short-to-medium term. I'm not convinced Facebook is a case of that, even though I hate what they do.
All I want is nice, non-toxic, non-addictive place to share photos and birthdays and life events with my family and close friends.
I understand that's not going to net hundreds of billions in revenue, but surely a site like that could keep the lights on and the engineers paid at scale.
All those photos and videos cost bandwidth, and that ain't free.
But the number of people willing to pay for their accounts on this stuff is vanishingly small.
So either you run this as a side project and accept that it's losing money, or you start running ads. And the moment you start running ads is the moment your most profitable choice becomes slowly turning your site more and more addictive, so that people spend more and more time on it and see more and more ads.
(Or you can keep the place small and constrained to people who have a high chance of being able to kick some money in for the bills, I'm only paying about half my Mastodon instance's fees because of making this choice.)
Or you can create a huge societal shift where we decide that having non-profit social sites is a good thing, and that they should be funded by the state, even if many of the views on them contradict the views of the giant bags of money pretending to be humans who are currently in control of the country. Ideally this societal shift would make it much harder for these giant bags of money to exist, as well.
Oh also getting people to stick around on a site that's not built to be addictive is surprisingly hard.
Wikipedia runs on donations. Most of FB is a massively bloated interface to maximize engagement, shove as much “content” as they can anywhere and everywhere, track everything you do, and add more “features” to find the next mechanism to get people more addicted.
For over a decade, I used Facebook lite messenger app which was built for countries with spotty, slow internet. It was less than a tenth of the size of the US messenger (of course it was unavailable in the app store and had to be installed via apk), was fast and easy to use (no stories, feeds, money sharing, animations), and was much better at doing the one thing it was supposed to be for, messaging people. It finally stopped working a couple of years ago and the regular app is a bloated mess where chats are an afterthought.
And why? Ads. You need more engagement so you can show people more ads. You need more content, so you have more things to attach ads to. You to autoplay videos to get people to watch more and see more ads. You have to run trackers so you can better target your ads. It’s the ads, not the functions, that make the modern internet too expensive to be funded by individuals.
2000s Facebook was able to run just fine on 2000s internet and storage. It would take a trivial amount of modern data and a fraction of modern storage to run now.
> All those photos and videos cost bandwidth, and that ain't free.
Facebook made $160bn last year, and profits were about $70bn, an almost 50% profit margin, and that's considering they're investing in a lot of crap.
There should be a middle ground between "minting gold coins" (Facebook) and "no money to pay the image hosting bills" somewhere in there.
As positive social networking disappears, the market demand for one you can pay for with no ads increases. Pricing would be difficult but every year the average consumer learns more and more about how much "free" costs.
I agree a non-profit approach might be the only option to avoid the same long term problems we've seen time and again.
> the market demand for one you can pay for with no ads increases
Didn't Meta try to offer this in the EU and they said no you have to let people use the free one without targeting any ads to them
In Zuck's defense, it's not just him, it's the entire American school of business.
They never learn. GM, GE, RCA, you name it. They always want to make more money now now NOW. They don't understand they're taking on a metaphorical loan. They don't understand the interest they have to pay.
It's the ultimate greedy algorithm. Just make the decision that makes the most money right now, every time, over and over and over again. Don't look at anything else.