Yesterday, Facebook lost $119 billion of its market value in 24 hours. The plunge represents the worst single day loss for a company in the history of the US stock market. With calls for Mark Zuckerberg to be fired as the company’s chairman growing ever more pronounced, people are already searching for reasons behind the dramatic drop in the company’s value.
While it is true that like many tech companies, Facebook was always overvalued beginning from the moment the company went public, there are other more long-term concerns at play as the formerly ambitious start up experiences both growing pains and fresh competition from more youth orientated social media platforms.
But moreover, Facebook has lost its sense of duty to its customers and has instead replaced it with a combination of duty to third parties and more worryingly towards the pursuit and promotion of an economically unsustainable ideology which has pitted the company against many of its users who generate revenue for Facebook by clicking the advertisements and sponsored content which fills the social media network.
When all is said and done, social media companies must be thought of as the 21st century version of the telecommunications (telecom) companies of the 20th century. Social media platforms exist merely as a vehicle for people to share written, pictorial, video content with varying degrees of interactivity. The difference is that unlike paying a phone company or internet provider a monthly fee based on usage or a flat monthly rate, most social media companies are paid for through the advertisements and sponsored content throughout any given social media website or app. Because of this, social media websites can thrive only when they have the largest possible cross-section of international users for whom different advertisements and sponsored content is appealing to varying degrees.
Just as phone and internet companies do not censor what one says on the phone nor do they restrict what one Googles on one’s computer, smart phone or tablet, so too should Facebook not get involved with censoring or otherwise policing content beyond that which law enforcement would have demanded regarding public statements in the pre-internet age.
But instead of limiting censorious activity to that which law enforcement deems potentially criminal, Facebook has instead opted to author its own “community standards” which ultimately it has the right to do as a private corporation. However, in so doing, Facebook has killed many of its own golden geese – its users who generate the company’s revenue. The fact that this was apparently not foreseen by Facebook when they began engaging in mass censorship logically leads one to question the intelligence of the company’s leadership.
Mark Zuckerberg is particularly at fault for trying to frame Facebook as some cultish “community” rather than a technological platform which allows users to do what the conference call allowed them to do in the 20th century. It is as though being a technological firm was not enough and instead, Facebook needed to both sell and propagate a certain lifestyle. The only problem is that users who do not subscribe to Mark Zuckerberg’s version of an idealised lifestyle generate revenue for the company as much as those who do.
This lies at the heart of Facebook’s problems. Censorship and so-called “shadow banning” is in fact increasingly common across several prominent social media networks. While these private corporations can enforce a preference for one ideology over another to some degree, strong legal arguments can be made that existing civil rights legislation and the 1st Amendment of the US Constitution prohibit companies from going out of their way to censor free speech on a biased basis. This was recently alluded to in a Tweet by the US President.
Twitter “SHADOW BANNING” prominent Republicans. Not good. We will look into this discriminatory and illegal practice at once! Many complaints.
— Donald J. Trump (@realDonaldTrump) July 26, 2018
In opening up a legal can of worms over censorship practices, Facebook and other companies like Twitter have clearly bit off more than they can chew and furthermore have bit off something they never needed to chew in the first place. If these companies simply limited themselves to being modern day telecommunications platforms rather than become engrossed in an awkward ideological movement to promote certain lifestyles over others, they would not only be offering a better and more comprehensive service to their customers but they would be offering a more assuring and sustainable business model for their shareholders.
As it stands, Facebook has disappointed both its customers and shareholders for many years. The Cambridge Analytica scandal which saw Facebook selling data on millions of its users to third parties was simply the straw that broke the camel’s back. Unless Facebook and similar companies get back to the basics and provide users with a fast, effective, user friendly and stimulating platform, the value of such companies will continue to plummet.
Ideology and business simply do not mix. When someone is selling a car, one doesn’t look for a buyer that share’s one’s political or social beliefs, one looks for a buyer who is willing to pay the best price. Social media is no different. Every user brings added value to a social media platform. By pushing users away, one is simply pushing one’s profits away.