The Facebook paradox – free, basic and hungry as ever

Written by on September 29, 2015 in Opinion with 0 Comments

Detailed view of Earth from space, showing Africa. Elements of this image furnished by NASAIt is really quite hard to make sense of Facebook. It started life as a social network. Given his time again, Mark Zuckerberg would have designed it as a mobile app (so he said at Mobile World Congress a couple of years ago). If he had, one has to wonder whether he would be running the goliath that he is now. Google or someone might have snapped him up for a mere few hundred million.

It went public, amid much discussion about its value. Some observers, including us, cynical of most things, believed that if you take a social network public and therefore make its balance sheet accountable to investors, then it will stop being social. So it turned out, many would say. Probably its saving grace, at least in mature markets, is that it is now uncool amongst teenagers, who were shocked and horrified to find their parents posting boring pictures of pals and ponies on the site. They took to Snapchat to share their own revolting teenage habits with each other. They also re-invented a vocabulary that was in code to stop parents monitoring them. (NIFOC, oops, P999). You can Google it.

Facebook then took to the moral high ground, where it is in danger of getting a nose bleed in the thin, pure atmosphere. Mr Zuckerberg is on a crusade to bring us Internet for All. And a jolly good crusade it is.

Facebook launched – now renamed Facebook Free Basics to allow new users to understand that they are getting something that is free, and basic. Some, and many in India, believe that the crosses net neutrality boundaries, providing unfair advantages for some service providers (so, neither free or basic). The renaming might be a fairly obvious ploy to make regulators believe that it is free, and basic. Regulators might see through this. Executives even admit that they have not seen any customers who were paying for access to the Internet migrating to the free service. In fact, the reverse is true. Passionate about his crusade, Mr Zuckerberg did admit to the New York Times that “it is not all altruism. We all benefit when we are more connected.” Particularly Mr Zuckerberg and his fellow Facebook stakeholders.

Meanwhile, in a department not far away, and close to his heart, the advertising machine is grinding ever more aggressively into action. Already, billions of irritating and misconstrued adverts are clogging up users’ time lines. Now, via its controversial, but increasingly clever looking purchase of Instagram, it is about to set about subverting and revolutionising the TV advertising market. As Debra Aho Williamson, social media marketing analyst with eMarketer says, “does Facebook want video ad dollars? Yes.” And most of those advertising dollars will be collected through Instagram. Already three quarters of Facebook’s advertising revenue comes through the app.

In conclusion, Facebook is on a roll. Several, in fact.

It is easy to hate Facebook. It is easy to hate (or at least ‘dislike’) innovative successful companies that have made it big and intend to make it bigger. One can only applaud the idea that if everyone was connected the world would be a better place. (It might, or it might not be). And one can only applaud (or be envious of) a company that will aggressively charge through the breach opened up by Mr Zuckerberg’s crusade, in search of advertising dollars where advertising dollars do not currently exist.

Perhaps this is the new reality. Perhaps we now live in a world where even altruistic crusades need advertising to support them. Facebook is destined to always be a network, perhaps the network. Social, though, it most definitely is not.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .


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