Tag: the social network

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Meta posts its first ever quarterly revenue decline

The company formerly known as Facebook isn’t doing so hot. After cutting its overhead, scaling back hiring and weathering a new SEC investigation, it doesn’t come as a surprise that Meta’s second quarter financial results are a bit messy.

The most worrisome piece of news today? For the first time since going public in 2007, Meta reported a decline in quarterly revenue year over year. The company’s revenue was $28.82 billion, a 1% decrease from $29.07 billion in the second quarter of 2021.

On her final quarterly earnings call, outgoing COO Sheryl Sandberg blamed this decline on the decreasing value of the Euro.

“Foreign exchange trends had a significant impact in Q2, in particular the depreciation of the Euro relative to the dollar,” Sandberg said on the call. “On a constant currency basis, we would have seen 3% revenue growth year over year.”

But these less-than-stellar results aren’t an aberration for Meta as of late.

Meta had another foreboding “first” just two quarters ago, when Facebook reported an unprecedented loss in daily active users (DAUs). Over the last two quarters, Facebook’s DAUs have begun to slowly increase again, but the platform did lose monthly active users (MAUs) this quarter. This is an anomaly, though. The loss entirely came from the European region, where Facebook was banned in Russia. Across Meta’s entire family of apps, daily active people (DAP) increased 4% year over year.

As both Facebook and Instagram try to emphasize short-form video, users have spoken out about their distaste for the platform’s endless attempts to imitate TikTok. Kylie Jenner and Kim Kardashian shared a petition this week that said, “Stop trying to be tiktok i just want to see cute photos of my friends.” Yesterday, Instagram head Adam Mosseri seemed to directly address these stars’ concerns in a video, where he emphasized that these feed changes are all just tests. CEO Mark Zuckerberg also weighed in on today’s earnings call, and the news isn’t good for those who agree with Kim and Kylie.

“About 15% of content in a person’s Facebook feed and a little more than that of their Instagram feed is recommended by our AI from people, groups or accounts that you don’t follow,” Zuckerberg said. “And we expect these numbers to more than double by the end of next year.” He also added that users have spent 30% more time viewing Reels than last quarter, but it’s hard to say how organic that growth is when users feel like they’re being inundated with these videos. Even though Reels monetization is still developing, the product has apparently crossed the $1 billion mark when it comes to annual revenue run rate.

Basically, Mosseri and Zuckerberg are indicating that, whether we like it or not, we’re going to be seeing a lot more content from accounts we don’t follow — there’s no going back. In just the last week, Facebook took the step to split the newsfeed into “Home,” a TikTok-like feed of recommendations, and “Feeds,” which shows you posts from your friends, groups and accounts you follow. Both Facebook and Instagram let users toggle between different feeds, but it feels a bit weird that the founder of Facebook has to specify that our actual friends will remain an important part of social media.

When it comes to VR, Zuckerberg still remains firm in his resolve that building the “metaverse” will be worth the massive investment.

“This is obviously a very expensive undertaking over the next several years,” he said. “But as the metaverse becomes more important in every part of how we live from our social platforms, to entertainment, to work, and education and commerce, I’m confident that we’re going to be glad that we played an important role in building this.”

In last quarter’s call with investors, Zuckerberg said that these expenditures were “laying the groundwork” for a big 2030.

Meta Q2 sales decline 1% to $28.82B, EPS drops 32%, moves CFO to new chief strategy officer role

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Barely outpacing snails, US lawmakers ponder regulating crypto

Image Credits: TechCrunch

The United States government took a long-anticipated first step towards comprehensive regulatory clarity for the digital asset space this week in the form of a new bipartisan Senate bill. As much as crypto bulls insist it’s still early days for the industry, it’s even earlier days for U.S. regulators — the bill isn’t expected to come to fruition until next year.

Hello and welcome back to the Chain Reaction podcast, where we unpack and explain the latest crypto news, drama and trends, breaking it down block by block for the crypto curious.

The proposed legislation, sponsored by Senators Cynthia Lummis and Kirsten Gillibrand, could be a significant win for crypto companies because of its relatively lax provisions if it does eventually pass. It’d spare the bulk of the industry from falling under the heavier-handed purview of the Securities and Exchange Commission (SEC), instead categorizing cryptocurrencies as commodities to be regulated by the Commodity Futures Trading Commission (CFTC). We talked through some of the bill’s specific provisions on mining, DAOs, and more.

We also discussed some far more negative news coming out of the industry this week — layoffs, hiring freezes and rescinded job offers from some of the major players in crypto, including Coinbase and Gemini, founded by the Winklevoss twins of “The Social Network” film infamy. (If you’re wondering what the “Winklevi” are up to these days outside of running their crypto exchange, we have a bizarre update on that front, too).

Our guest: Andreessen Horowitz partner Sriram Krishnan

Joining us this week from a16z, which recently raised the largest crypto venture fund ever, investor Sriram Krishnan talked to us about how scaling a crypto startup is similar to building a social media company. He also shared his thoughts on why he believes VCs subsidizing early-stage companies to attract users is a smart and crucial strategy.

Chain Reaction podcast episodes come out every Thursday at 12:00 p.m. PDT. Subscribe to us on Apple, Spotify or your alternative podcast platform of choice to keep up with us every week.

https://techcrunch.com/2022/05/25/amid-crypto-downturn-a16z-debuts-4-5-billion-web3-mega-fund/
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Sheryl Sandberg will step down as Meta COO

Sheryl Sandberg announced today on Facebook that she is leaving Meta after more than a decade as the company’s chief operating officer.

Sandberg joined Meta, then Facebook, as COO in 2008. Over the course of 14 years, Sandberg steered the company through an IPO, an unprecedented period of explosive industry growth and its at-times rocky path to becoming one of the most socially impactful and valuable tech companies in the world.

Meta’s Chief Growth Officer Javier Olivan will step into the COO role as Sandberg departs. According to a Facebook post on the news from Meta Founder and CEO Mark Zuckerberg, Olivan will be in charge of Meta’s ads and business products while overseeing its teams dedicated to “infrastructure, integrity, analytics, marketing, corporate development and growth.”

Zuckerberg noted that Olivan’s role as COO will be “different from what Sheryl has done,” a commentary on just how much influence and power Sandberg exercised during her years with the company. “It will be a more traditional COO role where Javi will be focused internally and operationally, building on his strong track record of making our execution more efficient and rigorous,” Zuckerberg wrote, adding that he didn’t plan to replace her role directly.

“I think Meta has reached the point where it makes sense for our product and business groups to be more closely integrated, rather than having all the business and operations functions organized separately from our products,” he said. While Sandberg was an outsized presence at the company, Meta has always been synonymous with Zuckerberg and it’s possible that he will have even more direct control of decisions at the company as it reorganizes.

In the post, Zuckerberg also took the time to reflect on just how much Sandberg shaped the company into the social media and advertising giant it is today:

“When Sheryl joined me in 2008, I was only 23 years old and I barely knew anything about running a company. We’d built a great product — the Facebook website — but we didn’t yet have a profitable business and we were struggling to transition from a small startup to a real organization. Sheryl architected our ads business, hired great people, forged our management culture, and taught me how to run a company. She created opportunities for millions of people around the world, and she deserves the credit for so much of what Meta is today.”

Sandberg, who worked for the Clinton administration prior to joining Meta, was widely reported to have expected a role in Hillary Clinton’s cabinet, likely as treasury or commerce secretary. With Donald Trump’s surprise win, those plans were dashed and Sandberg settled in for what would shape up to be a profitable era for the company but one full of uncomfortable reckonings over the social network’s role in propagating disinformation, hate and conspiracies.

Just after the January 6 insurrection at the U.S. Capitol, Sandberg falsely claimed that the day’s events were “largely organized on platforms that don’t have our abilities to stop hate.” In reality, Facebook played a central role in the “Stop the Steal” movement following the 2020 election after fostering far right groups like QAnon and the Proud Boys for years before taking action.

That unforced error was just one of Sandberg’s recent PR blunders. Others include her involvement in contracting the Republican opposition research firm Definers Public Affairs to plant negative stories about liberal billionaire George Soros and a more recent report that Sandberg leveraged the Meta communications team to kill a story about Activision Blizzard CEO Bobby Kotick, her former boyfriend who is now accused of fostering a culture of sexual harassment at the gaming company. Following revelations about Sandberg’s efforts to kill the story, the Wall Street Journal reported that she was facing “internal scrutiny” at Meta around the incident.

While she will exit the c-suite, Sandberg will stay on in her role on Meta’s board of directors. She became the board’s first female member when she joined it in 2012. In a Facebook post, Sandberg opined about her long tenure at the company and the personal challenges she endured over that time, including the death of her husband, Dave Goldberg, in 2015.

Reports in recent years suggested that Facebook’s growing political tensions and Sandberg’s handful of high profile missteps strained the relationship between Sandberg and Zuckerberg, though it’s not clear if that paved the way to her departure. In her post, Sandberg reflected on her long relationship with Zuckerberg, who she will continue to work with through the company’s board.

“… On the way in, I asked Mark for three things – that we would sit next to each other, that he would meet with me one-on-one every week, and that in those meetings he would give me honest feedback when he thought I messed something up,” Sandberg wrote. “Mark said yes to all three but added that the feedback would have to be mutual. To this day, he has kept those promises.”

Facebook knew for years ad reach estimates were based on ‘wrong data’ but blocked fixes over revenue impact, per court filing

Facebook policy head makes a surprising cameo at the Kavanaugh hearing

Sheryl Sandberg under fire for trying to kill a story about her ex, the CEO of Activision Blizzard

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Grand Theft Auto: San Andreas is in development for Oculus Quest 2

During its big VR and AR-focused event Thursday, Facebook founder and CEO Mark Zuckerberg announced a major new title headed to its VR platform that should turn a few heads.

Grand Theft Auto: San Andreas is on the way to the Oculus Quest 2. San Andreas is Rockstar’s well-loved 2004 entry into the hit GTA franchise, which invites players to wreak havoc in an urban open world fashioned after cities like Los Angeles and Las Vegas.

“This new version of what I think is one of the greatest games ever made will offer players an entirely new way to experience this iconic world in virtual reality,” Zuckerberg said.

Bringing such an iconic game into the fold is certainly one way to lure more users into the company’s emerging virtual world — one that even folks squeamish about Facebook’s VR account login requirements might find enticing.

While Zuckerberg didn’t offer many details about what to expect or when, Facebook has apparently been working on bringing the GTA classic to its VR headset for years.

Slack is coming to the Oculus Quest

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Facebook’s CTO to step down after 13 years at the company

Facebook Chief Technology Officer Mike Schroepfer just announced that he will stepping down from the role next year and transition to a part-time position as a “Senior Fellow” at the company. It’s one of the biggest leadership departures for Facebook in recent memory.

He will be replaced in the role by long-time executive Andrew Bosworth who has most recently led the company’s Facebook Reality Labs. Bosworth will continue to lead the AR/VR organization in his new role.

CEO Mark Zuckerberg shared a note on the departure in the company’s newsroom:

I want to take a moment to thank Schrep for his extraordinary contributions to our community and our company over the last 13 years. He has played a critical role in almost everything we’ve done — from building and scaling our teams to mentoring many of our key leaders, and from helping us develop new technologies like AI and VR to operating our infrastructure and business services at global scale. Schrep and I have had a close partnership over the years, and in addition to being a great leader, he’s also a great person and a close friend. 

Schroepfer joined the company in August of 2008, according to his LinkedIn, a time when Facebook was riding high on a $15 billion valuation but was soon to encounter a harsher investment environment during the recession which led it to raise a series of down rounds. The company went on to have the biggest technology IPO in history and is currently trading at a market cap just south of $1 trillion.

The road to riches has left Facebook with plenty of tech challenges which have led to more than a handful of controversies. Schroepfer’s lengthy tenure has been most notably marked by Facebook embrace of artificial intelligence and the algorithmic news feed which promotes content to users based on what Facebook believes will interest the user the most. The company also relies heavily on artificial intelligence for tasks like content moderation. The company’s reliance on algorithmic promotion and data collection have been… controversial at times.

Instacart hires Facebook executive as new CEO ahead of expected IPO

Schroepfer’s exit from Zuckerberg’s inner circle is an important moment for the company. Though Facebook has seen a handful of high profile exits in recent years, including Facebook app chief Fidji Simo, Ad boss Carolyn Everson, Chief Revenue Officer David Fischer and VR head Hugo Barra, none have been as close to the CEO as Schroepfer.

New CTO Andrew Bosworth

Bosworth, who joined Facebook in January of 2006, has been one of the company’s more vocal executives, sharing, at times, controversial opinions about the company and technology industry at large. He has previously led the company’s hardware divisions and ad divisions, most recently helming AR/VR operating which Facebook has long promoted as a major pillar for the company.

“This is a difficult decision because of how much I love Facebook and how excited I am about the future we are building together,” Schroepfer wrote in a Facebook post. “This change in role will allow me to dedicate more time to my family and my personal philanthropic efforts while staying deeply connected to the company working on key initiatives including recruiting and developing technical talent and continuing to foster our AI investments in critical technologies like PyTorch.”

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Facebook is expanding Spotify partnership with new ‘Boombox’ project

Facebook is deepening its relationship with music company Spotify and will allow users to listen to music hosted on Spotify while browsing through its apps as part of a new initiative called “Project Boombox,” Facebook CEO Mark Zuckerberg said Monday.

Facebook is building an in-line audio player that will allow users to listen to songs or playlists being shared on the platforms without being externally linked to Spotify’s app or website. Zuckerberg highlighted the feature as another product designed to improve the experience of creators on its platforms, specifically the ability of musicians to share their work, “basically making audio a first-class type of media,” he said.

We understand from sources familiar with the Spotify integration that this player will support both music and podcasts. It has already been tested in non-U.S. markets, including Mexico and Thailand, and that it’s expected to arrive in about a week.

The news was revealed in a wide-ranging interview with reporter Casey Newton on the company’s future pursuits in the audio world as Facebook aims to keep pace with upstart efforts like Clubhouse and increased activity in the podcasting world. 

Facebook invests in audio with short-form Soundbites feature, podcast support, and a Clubhouse clone

“We think that audio is going to be a first-class medium and that there are all these different products to be built across this whole spectrum,” said Zuckerberg. “Of course, it includes some areas that, that have been, you know, popular recently like like podcasting and and kind of live audio rooms like this, but I also think that there’s some interesting things that are that are under explored in the area overall.”

Spotify has already supported a fairly product relationship with the Facebook and Instagram platforms. In recent years the music and podcasts platform has been integrated more deeply into Instagram Stories where users can share content from the service, a feature that’s also been available in Facebook Stories.

Get ready to see Spotify’s looping videos on Instagram

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Institutional trust is the real meme

Hello friends, this is Week in Review.

Last week, I dove into the AR maneuverings of Apple and Facebook and what that means for the future of the web. This week, I’m aiming to touch the meme stock phenomenon that dominated American news cycles this week and see if there’s anything worth learning from it, with an eye towards the future web.

If you’re reading this on the TechCrunch site, you can get this in your inbox every Saturday morning from the newsletter page, and follow my tweets @lucasmtny.

Robin Hood statue in Nottingham

(Photo by Mike Egerton/PA Images via Getty Images)

The big thing

This week was whatever you wanted it to be. A rising up of the proletariat. A case of weaponized disinformation. A rally for regulation… or perhaps deregulation of financial markets. Choose your own adventure with the starting point being one flavor of chaos leading into a slightly more populist blend of chaos.

At the end of it, a lot of long-time financiers are confused, a lot of internet users are using rent money to buy stock in Tootsie Roll, a lot of billionaires are finding how intoxicating adopting a “for-the-little-guy!” persona on Twitter can be, and here I am staring at the ceiling wondering if there’s any institution in the world trustworthy enough that the internet can’t turn it into a lie.

This week, my little diddy is about meme stocks, but more about the idea that once you peel away the need to question why you actually trust something, it can become easier to just blindly place that faith in more untrustworthy places. All the better if those places are adjacent to areas where others place trust.

The Dow Jones had its worst week since October because retail investors, organized in part on Reddit, turned America’s financial markets into the real front page of the internet. Boring, serious stocks like Facebook and Apple reported their earnings and the markets adjusted accordingly, but in addition to the serious bits of news, the Wall Street page was splashed with break neck gains from “meme stocks.” While junk stocks surging is nothing new, the idea that a stock can make outrageous gains based on nothing and then possibly hold that value based on a newly formed shared trust is newer and much more alarming.

The most infamous of these stocks was GameStop. (If you’re curious about GameStop’s week, there are at least 5 million stories across the web to grab your attention, here’s one. Side note: collectively we seem to have longer attention spans post-Trump.)

So, Americans already don’t have too much institutional faith. Looking through some long-standing Gallup research, compared to the turn of the century, faith in organized religion, the media, most wings of government, big business and banks has decreased quite a bit. The outliers in what Americans do seem to trust more than they did 20 or so years ago are small businesses and the military.

This is all to say that it’s probably not stellar that people don’t trust anything, and me thinking that the internet could probably disrupt every trusted institution except the military probably only shows my lack of creative thinking when it comes to how the web could democratize the Defense Department. As you might guess from that statement, I think democratizing access to certain institutions can be bad. I say that with about a thousand asterisks leading to footnotes that you’ll never find. I also don’t think the web is done disrupting institutional trust by a long shot, for better or worse.

Democratizing financial systems sounds a lot better from a populist lift, until you realize that the guys users are competing against are playing a different game with other people’s money. This saga will change plenty of lives but it won’t end particularly well for a most people exposed to “infinite upside” day trading.

Until this week, in my mind Robinhood was only reckless because it was exposing (or “democratizing access to” — their words) consumers to risk in a way that most of them probably weren’t equipped to handle. Now, I think that they’re reckless because they didn’t anticipate that OR how democratized access could lead to so many potential doomsday scenarios and bankrupt Robinhood. They quietly raised a $1 billion liquidity lifeline this week after they had to temporarily shut down meme stock trading, a move that essentially torched their brand and left them the web’s most hated institution. (Facebook had a quiet week)

This kind of all feeds back into this idea I’ve been feeding that scale can be very dangerous. Platforms seem to need a certain amount of head count to handle global audiences, and almost all of them are insufficiently staffed. Facebook announced this week in its earnings call that it has nearly 60,000 employees. This is a company that now has its own Supreme Court; that’s too big. If your institution is going to be massive and centralized, chances are you need a ton of people to moderate it. That’s something at odds with most existing internet platforms. Realistically, the internet would probably be happier with fewer of these sweeping institutions and more intimate bubbles that are loosely connected. That’s something that the network effects of the past couple decades have made harder but regulation around data portability could assist with.

Writing this newsletter, something I’m often reminded is that while it feels like everything is always changing, few things are wholly new. This great NYT profile from 2001 written by Michael Lewis is a great reminder of that, chronicling a 15-year-old who scammed the markets by using a web of dummy accounts and got hounded by the SEC but still walked away with $500k. Great read.

In the end, things will likely quiet down at Robinhood. There’s also the distinct chance that they don’t and that those meme traders just ignited a revolution that’s going to bankrupt the company and torch the globals markets, but you know things will probably go back to normal.

 

Until next week,
Lucas Matney

Facebook CEO Mark Zuckerberg testifies before the House Judiciary Subcommittee on Antitrust, Commercial and Administrative Law

(Photo by MANDEL NGAN/POOL/AFP via Getty Images)

Other things

SEC is pissed
I’ll try to keep these updates GameStop free, but one quick note from the peanut gallery. The SEC isn’t all that happy about the goings ons in the market this week and they’re mad, probably mostly at Robinhood. They got pretty terse with their statement. More

Facebook Oversight Board wants YOU
Zuckerberg’s Supreme Court wants public comment as it decides whether Facebook should give Trump his Instagram and Facebook accounts back. I’m sure any of Facebook’s executives would’ve stopped building the platform dead in its tracks in the years after its founding if they knew just how freaking complicated moderation was going to end up being for them, but you could probably have changed their mind back by showing them the market cap. More

Apple adtech-killing update drops in spring
After delaying its launch, Apple committed this week to the spring rollout of its “App Tracking Transparency” feature that has so much of the adtech world pissed. The update will force apps to essentially ask users whether they’d like to be tracked across apps. More

Robert Downey Jr. bets on startups
Celebrity investing has been popular forever, but it’s gotten way more common in the venture world in recent years. Reputation transfer teamed with the fact that money is so easy to come by for top founders, means that if you are choosing from some second-tier fund or The Chainsmokers, you might pick The Chainsmokers. On that note, actor Robert Downey Jr. raised a rolling fund to back climate tech startups, we’ve got all the deets. More

WeWork SPAC
Ah poor Adam Neumann, poor SoftBank. If only they’d kept their little “tech company” under wraps for another couple years and left that S-1 for a kinder market with less distaste for creative framing. It seems that WeWork is the next target to get SPAC’d and be brought onto public markets via acquisition. I’m sure everything will go fine. More

Tim Cook and Zuckerberg spar
Big tech is a gentlemen’s game, generally big tech CEOs play nice with each other in public and save their insults for the political party that just fell out of power. This week, Tim Cook and Mark Zuckerberg were a little less friendly. Zuckerberg called out Apple by name in their earnings investor call and floated some potential unfair advantages that Apple might have. Them’s fighting words. Cook was more circumspect as usual and delivered a speech that was at times hilariously direct in the most indirect way possible about how much he hates Facebook. More

Extra things

Tidbits from our paywalled Extra Crunch content:
The 5 biggest mistakes I made as a first-time startup founder
“I and the rest of the leadership team would work 12-hour days, seven days a week. And that trickled down into many other employees doing the same. I didn’t think twice about sending emails, texts or slacks at night and on weekends. As with many startups, monster hours were simply part of the deal.”

Fintechs could see $100 billion of liquidity in 2021
“For the fourth straight year, the publicly traded fintechs massively outperformed the incumbent financial services providers as well as every mainstream stock index. While the underlying performance of these companies was strong, the pandemic further bolstered results as consumers avoided appearing in-person for both shopping and banking. Instead, they sought — and found — digital alternatives.”

Rising African venture investment powers fintech, clean tech bets in 2020
“What is driving generally positive venture capital results for Africa in recent quarters? Giuliani told TechCrunch in a follow-up email that ‘investment in Africa is being driven on the one hand by a broadening base for early-stage ecosystem support organizations, including accelerators, seed funds, syndicates and angel investing,” and “consolidation,” which is aiding both “growth-stage deals and a burgeoning M&A market.'”

 

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How ‘the Internet broke America’ with The New Yorker’s Andrew Marantz

When Elizabeth Warren took on Mark Zuckerberg and Facebook earlier this week, it was a low moment for what New Yorker writer Andrew Marantz calls “techno-utopianism.”

That the progressive, populist Massachusetts Senator and leading Democratic Presidential candidate wants to #BreakUpBigTech is not surprising. But Warren’s choice to spotlight regulating and trust-busting Facebook was nonetheless noteworthy, because of what it represents on a philosophical level. Warren, along with like-minded political leaders, social activists, and tech critics, has begun to offer the first massively popular alternative to the massively popular wave of aggressive optimism and “genius” ambition that characterized tech culture for the past decade or two.

“No,” Warren and others seem to say, “your vision is not necessarily making the world a better place.” This is a major buzzkill for tech leaders who have made (positive) world-changing their number one calling card — more than profits, popularity, skyscrapers like San Francisco’s striking Salesforce Tower, or any other measure.

Enter Marantz, a longtime New Yorker staff writer and Brooklyn, N.Y. resident who has recently trained his attention on tech culture, following around iconic figures on both sides of what he sees as the divide of our time — not between tech greats whose successes make us all better and those who would stop them, but between the alternative figures on the “new right” and the self-understood liberals of Silicon Valley who, according to Marantz, have both contributed to “hijacking the American conversation.”

Author Photo Andrew Marantz credit Luke Marantz fix

Image via Penguin Random House

Marantz’s first book, “Antisocial: Online Extremists, Techno-Utopians, and the Hijacking of the American Conversation,” will be released next week, and I recently had a chance to talk with him for this series the ethics of technology.

Greg Epstein: Congratulations on your absolutely fascinating new book Antisocial, and on everything you’ve been up to.

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Facebook pivots to what it wishes it was

In Facebook’s dreams, it’s a clean and private place. People spend their time having thoughtful discussions in “meaningful” Groups, planning offline meetups with Events, or laughing together in a Facebook Watch party.

In reality, Facebook is a cluttered mess of features that seem to constantly leak user data. People waste their time viewing inane News Feed posts from “friends” they never talk to, enviously stalking through photos of peers, or chowing on click-bait articles and viral videos in isolation.

That’s why Facebook is rolling out what could be called an “aspirational redesign” known as FB5. Rather than polishing what Facebook was, it tries to spotlight what it wants to be. “This is the biggest change we’ve made to the Facebook app and site in five years” CEO Mark Zuckerberg said to open Facebook’s F8 conference yesterday.

 

The New Facebook

Most noticibly, that starts with sucking much of the blue out of the Facebook interface to making it look sparse and calming — despite a More button that unveils the social network’s bloat into dozens of rarely-used features. A new logo features a brighter blue bubble around Facebook’s distinctive white f, which attempts to but a more uplifting spin on a bruised brand.

Functionally, FB5 means placing Groups near the center of a freshly tabbed interface for the both Facebook’s website and app, and putting suggestions for new ones to join across the service. “Everywhere there are friends, there should be Groups” says the head of the Facebook app Fidji Simo. Groups already has 1 billion monthly users, so Facebook is following the behavior pattern and doubling down. But Facebook’s goal is not only to have 2.38 billion people using the feature — the same number as use its whole app — but to get them all into meaningful Groups that emblemize their identity. 400 million already are. And now Groups for specific interests like gaming or health support will get special features, and power users will get a dashboard of updates across all their communities.

Groups will be flanked by Marketplace, perhaps the Facebook feature with the most latent potential. It’s a rapidly emerging use case Facebook wants to fuel. Zuckerberg took Craigslist, added real identity to thwart bad behavior, and now is bolting it to the navigation bar of the most-used app on earth. The result is a place where it’s easy to put things up for sale and get tons of viewers. I once sold a couch on Marketplace in 20 minutes. Now sellers can take payments directly in the app instead of with cash or Venmo, and they can offer to ship items anywhere at the buyer’s expense. By following Zuckerberg’s mandate that 2019 focus on commerce, Facebook has become a viable Shopify competitor.

If Groups is what’s already working about Facebook’s future, Watch is the opposite. It’s a product designed to capture the video viewing bonanza Facebook observes on Netfli and YouTube. But without tentpole content like a “Game Of Thrones” or “Stranger Things”, it’s failed to impact the the cutlural zeitgeist. The closest thing it has to must-see video is Buffy The Vampire Slayer re-runs and a docuseries on NBA star Steph Curry. Facebook claims 75 million people now Watch for at least one minute per day though those 60 seconds don’t have to be  sequential. That’s still just 4 percent of its users. And a Diffusion study found 50 percent of adult US Facebook users had never even heard of Watch. Sticking it front and center demonstrates Facebook commitment to making Watch a hit even if it has to cram it down our throats.

Not The Old Facebook

The products of the past got little love on stage at F8. Nothing new for News Feed, Facebook’s mint but also the source of its misinformation woes. In the age of Snapchat and Zuckerberg’s newfound insistence on ephemerality to prevent embarassment, the Timeline profile chronicling your whole Facebook life got nary a mention. And Pages for businesses that were the center of its monetization strategy years ago didn’t find space in the keynote, similar to how they’ve been butted out of the News Feed by competition and Facebook’s philosophical shift from public content to friends and family.

 

The one thing we heard a lot about but didn’t actually see much of was privacy. Zuckerberg started the conference declaring “The future is private!” He spoke about how Facebook plans to make its messaging apps encrypted, how it wants to be a living room rather than just a townhall, and how it’s following the shift in user behavior away from broadcasting. But we didn’t see any new privacy protections for the developer platform, a replacement for its Chief Security Officer that’s been vacant for nine months, or the Clear History feature Zuckerberg announced last year.

“I get that a lot of people aren’t sure that we’re serious about this. I know that we don’t exactly have the strongest reputation on privacy right now, to put it lightly” Zuckerberg joked without seeming to generate a single laugh. Combined with having little to show to enhance privacy, making fun of such a dire situation doesn’t instill much confidence. When Zuckerberg does take things seriously, it quickly manifests itself in the product like with Facebook’s 2012 shift to mobile, or in the company like with 2018’s doubling of security headcount. He knew mobile and content moderation failures could kill his network. But does someone who told Time magazine in 2010 that “What people want isn’t complete privacy” truly see a loose stance on privacy as an existential threat?

Interoperable, encrypted messaging will boost privacy, but it’s also just good business logic given Zuckerberg’s intention to own chat — the heart of your phone. Facebook’s creepiness stems from it sucking in data to power ad targeting. Nothing new was announced to address that. Despite his words, perhaps Zuckerberg doesn’t aspire to make Facebook as private as he aspired to make it mobile and secure. 

Wired reported that Zuckerberg authored a strategy book given to all employees ahead of the IPO that noted “If we don’t create the thing that kills Facebook, someone else will.” But F8 offered a new interpretation. Maybe given the lack of direct competitors in its league, and the absence of a mass exodus over its constant privacy scandals, it was the outdated product itself that was killing Facebook. The permanent Facebook. The all-you-do-is-scroll Facebook. The bored-of-my-friends Facebook. Users were being neglected rather than pushed or stolen. By ignoring the past and emphasizing the products it aspires to have dominate tomorrow — Groups, Marketplace, Watch — Facebook can start to unchain itself from the toxic brand poisoning its potential.

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Facebook co-founder, Chris Hughes, calls for Facebook to be broken up

The latest call to break up Facebook looks to be the most uncomfortably close to home yet for supreme leader, Mark Zuckerberg.

“Mark’s power is unprecedented and un-American,” writes Chris Hughes, in an explosive op-ed published in the New York Times. “It is time to break up Facebook.”

It’s a long read but worth indulging for a well articulated argument against the market-denting power of monopolies, shot through with a smattering of personal anecdotes about Hughes’ experience of Zuckerberg — who he at one point almost paints as ‘only human’, before shoulder-dropping into a straight thumbs-down that “it’s his very humanity that makes his unchecked power so problematic.”

The tl;dr of Hughes’ argument against Facebook/Zuckerberg being allowed to continue its/his reign of the Internet knits together different strands of the techlash zeitgeist, linking Zuckerberg’s absolute influence over Facebook — and therefore over the unprecedented billions of people he can reach and behaviourally reprogram via content-sorting algorithms — to the crushing of innovation and startup competition; the crushing of consumer attention, choice and privacy, all hostage to relentless growth targets and an eyeball-demanding ad business model; to the crushing control of speech that Zuckerberg — as Facebook’s absolute monarch — personally commands, with Hughes worrying it’s a power too potent for any one human to wield.

“Mark may never have a boss, but he needs to have some check on his power,” he writes. “The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.”

His proposed solution is not just a break up of Facebook’s monopoly of online attention by re-separating Facebook, Instagram and WhatsApp — to try to reinvigorate a social arena it now inescapably owns — he also calls for US policymakers to step up to the plate and regulate, suggesting an oversight agency is also essential to hold Internet companies to account, and pointing to Europe’s recently toughened privacy framework, GDPR, as a start.

“Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy,” he writes. “A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time. The agency should also be charged with guaranteeing basic interoperability across platforms.”

Once an equally fresh faced co-founder of Facebook alongside his Harvard roommate, Hughes left Facebook in 2007, walking away with what would become eye-watering wealth — writing later that he made half a billion dollars for three years’ work, off of the back of Facebook’s 2012 IPO.

It’s harder to put a value on the relief Hughes must also feel, having exited the scandal-hit behemoth so early on — getting out before early missteps hardened into a cynical parade of privacy, security and trust failures that slowly, gradually yet inexorably snowballed into world-wide scandal — with the 2016 revelations about the extent of Kremlin-backed political disinformation lighting up the dark underbelly of Facebook ads.

Soon after, the Cambridge Analytica data misuse scandal shone an equally dim light into similarly murky goings on Facebook’s developer platform. Some of which appeared to hit even closer to home. (Facebook had its own staff helping to target those political ads, and hired the co-founder of the company that had silently sucked out user data in order to sell manipulative political propaganda services to Cambridge Analytica.) 

It’s clear now that Facebook’s privacy, security and trust failures are no accident; but rather chain-linked to Zuckerberg’s leadership; to his strategy of neverending sprint for relentless, bottomless growth — via what was once literally a stated policy of “domination”. 

Hughes, meanwhile, dropped out — coming away from Facebook a very rich man and, if not entirely guilt-free given his own founding role in the saga, certainly lacking Zuckerberg-levels of indelible taint.

Though we can still wonder where his well-articulated concern, about how Facebook’s monopoly grip on markets and attention is massively and horribly denting the human universe, has been channelled prior to publishing this NYT op-ed — i.e. before rising alarm over Facebook’s impact on societies, democracies, human rights and people’s mental health scaled so disfiguringly into mainstream view.

Does he, perhaps, regret not penning a critical op-ed before Roger McNamee, an early Zuckerberg advisor with a far less substantial role in the whole drama, got his twenty-cents in earlier this year — publishing a critical book, Zucked, which recounts his experience trying and failing to get Zuckerberg to turn the tanker and chart a less collaterally damaging course.

It’s certainly curious it’s taken Hughes so long to come out of the woodwork and join the big techlash.

The NYT review of Zucked headlined it as an “anti-Facebook manifesto” — a descriptor that could apply equally to Hughes’ op-ed. And in an interview with TC back in February, McNamee — whose more limited connection to Zuckerberg Facebook has sought to dismiss — said of speaking out: “I may be the wrong messenger, but I don’t see a lot of other volunteers at the moment.”

Facebook certainly won’t be able to be so dismissive of Hughes’ critique, as a fellow co-founder. This is one Zuckerberg gut-punch that will both hurt and be harder to dodge. (We’ve asked Facebook if it has a response and will update if so.)

At the same time, hating on Facebook and Zuckerberg is almost fashionable these days — as the company’s consumer- and market-bending power has flipped its fortunes from winning friends and influencing people to turning frenemies into out-and-out haters and politically charged enemies.

Whether it’s former mentors, former colleagues — and now of course politicians and policymakers leading the charge and calling for the company to be broken up.

Seen from that angle, it’s a shame Hughes waited so long to add his two cents. It does risk him being labelled an opportunist — or, dare we say it, a techlash populist. (Some of us have been banging on about Facebook’s intrusive influence for years, so, er, welcome to the club Chris!) 

Though, equally, he may have been trying to protect his historical friendship with Zuckerberg. (The op-ed begins with Hughes talking about the last time he saw Zuckerberg, in summer 2017, which it’s hard not to read as him tacitly acknowledging there likely won’t be any more personal visits after this bombshell.)

Hughes is also not alone in feeling he needs to bide his time to come out against Zuckerberg.

The WhatsApp founders, who jumped the Facebook mothership last year, kept their heads down and their mouths shut for years, despite a product philosophy that boiled down to ‘fuck ads’ — only finally making their lack of love for their former employer’s ad-fuelled privacy incursions into WhatsApp clear post-exit from the belly of the beast — in their own subtle and not so subtle ways.

In their case they appear to have been mostly waiting for enough shares to vest. (Brian Acton did leave a bunch on the table.) But Hughes has been sitting on his money mountain for years.

Still, at least we finally have his critical — and rarer — account to add to the pile; A Facebook co-founder, who had remained close to Zuckerberg’s orbit, finally reaching for the unfriend button.