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  • March 22, 2018
  • If you study economic cycles you can watch the evolution of a disruptive technology throughout its lifecycle from a specific product, to a competitive industry. The last phase in the evolutionary chain is often the formation of a utility. For example, over a couple of centuries we’ve seen the evolution of electricity from a curiosity, to a business, to a group of public companies. Along the way there are the inevitable mergers and acquisitions to enable a winnowing field of competitors to achieve the scale needed to compete in very large markets.

    It wasn’t just the electric industry that went through this evolution. The telephone, gas, and cable industries did in their own ways. Local or reginal utilities that provide sanitation and water still dot the landscape too. Banking is in a similar position that is manifests differently. In fact, any industry that attracts the term “too big to fail” is showing signs of utility status.

    When your business becomes so big that it affects large segments of society it can’t be allowed to fail lest it crater the economy or cause massive disruption injuring many people. At that point government has a compelling interest in preventing failure and along with that comes regulation of the riskiest corporate behaviors.

    The latest example to hit the radar might be social media which has completed many steps of the lifecycle with blistering speed in just over a decade. This speed notwithstanding, we are now at a point where what happens in social media affects all of us.

    Regulation is a thorny issue wrapped in individual freedom. But it is also a logical way out of an impasse. The recent interference in the US election, which all the American intelligence agencies have confirmed, is a proof point that social media is now a utility and needs some form of regulation.

    In a recent article in Wired, “Bad Actors are Using Social Media Exactly As Designed,” writer Joshua Geltzer makes the point that popular social sites including Facebook, Twitter, and Air BNB, all provide tools that enable users to find and segment groups that are best subjected to targeted messaging. His point is simple, the bad actors didn’t pervert social media or hack its code. They simply used the tools provided to mount a campaign to upend a US election and there’s evidence of similar activity elsewhere.

    By this measure, social media is now too big to fail; it is too essential to a large segment of society and its potential excesses must be managed so that it does not consume the society and the users who depend on it. Geltzer’s article clearly, but inadvertently, makes the case,

    When Russia manipulates elections via Facebook, or ISIS recruits followers on Twitter, or racist landlords deny rentals to blacks and then offer them to whites through Airbnb, commentators and companies describe these activities as “manipulation” or “abuse” of today’s ubiquitous websites and apps. The impulse is to portray this odious behavior as a strange, unpredictable, and peripheral contortion of the platforms.

    But it’s not. It’s simply using those platforms as designed.

    So, what would a social media utility look like and how would it be different from what we see today? First off, social networks should be regulated with as light a touch as possible. Grandmothers sharing baby pictures shouldn’t have to change their use habits, for example. Second, to achieve positive ends, regulation should be implemented at two distinct levels, the source and the periphery.

    At the source, regulation comes down to access for any person or entity with a beneficial and productive need for the utility’s services. In the electricity markets this means stable pricing for all and a commitment to serve as a common carrier. It wouldn’t be much different with social network regulation; the key is beneficial and productive use.

    Common carrier law began in railroads and shipping. In return for its use of public lands and roads, the carrier commits to serve all parties equally. In broadcast industries (radio and TV), slices of electromagnetic spectrum play the role of roads  that the broadcasters use as grants (licenses) from the people. In transport, the waterways are also owned by the people, so are the roads, and railroads have historically received government help because they provide a useful service to society. It goes on, but you can see that source regulation amounts to giving all participants a fair shot at using the public’s assets and insisting on beneficial and productive use.

    Regulation at the periphery takes on a different cast, notably in America where so much of modern utility regulation evolved. A great deal of peripheral regulation occurs through certification and licensure. People interested in careers involving one of the utilities often serve apprenticeships, learning from a master before earning journeyman’s status. They must also pass tests to prove their knowledge and skill.

    Barbers, beauticians, and other personal services professionals go to school and sit for certifying exams. Other professions are similar. Doctors, dentists, lawyers, and many others must take many years of education, pass tests, and serve different forms of internships before practicing on their own.

    The point here is that we already regulate the day to day best practices of many industries. We do it with a light touch and in the interest of the culture and the society functions quite well despite, or more likely because of, this light approach to regulation.

    My take

    Perhaps the time has come to consider lightly regulating parts of the tech industry, something we have never done. But the age of information and telecommunication, a 50-year economic cycle called a K-wave, is reaching its natural endpoint and that’s often when utility status and regulation has come to the forefront in prior cycles.

    Elevating social media use to professional status, seems a logical thing to do. Establishing a certification or licensing process plus capturing a user’s license number when accessing some of social media’s higher functions would give an uncomplicated way of keeping bad actors out of the networks or at least making them traceable. In case you are wondering this is the basic process of getting a building permit.

    This approach need not apply to lower level personal use. But trying to reach millions of people on a social network is functionally like climbing a utility pole and messing with the wires. For this one should need certification.

    Last point, part of certification in any industry is training in the ethical use of the tools and techniques of that industry. As a society we have not engaged in such a dialog for social networks yet, but one is overdue.

     

     

    Published: 1 year ago


    I’ve been a user of social media for more than 10 years and I was among the first to write about its potential long before there were social media products. The original research on 6 degrees of separation and the Kevin Bacon game that illustrated the power of social networking fascinated me. I started writing about it and even wrote a paper in about 2002-03 that called for social networking and analytics to become part of the CRM suite. I was a fan of James Surowiecki’s classic, “The Wisdom of Crowds” and thought that was a prescription for settling many tricky research questions. But now approaching 20 years later, I’m dismayed by what social media has become and I find myself calling for its abolition.

    Okay, social media isn’t going anywhere. The freedom of speech embedded in western democracies will ensure that even to the point that social media is eroding the very freedom of discourse that supports it. But that only places more responsibility on each of us to ensure that this class of products is used appropriately and not as a force for good.

    Revelations about Russian social media use to worsen domestic political arguments among Americans and influence political discourse leaves me shaken. But so does the advertising model and profit motive that drives it. They’re really two sides of the same coin. Social media’s primary product is the user and the products do a great job of gathering crowd data and statistically analyzing it to feed recommendations back to advertisers. It is not wrong to say that we are enabling it to assist force-feeding the consumer culture.

    Surely there must be a higher calling for the great technology that we’ve midwifed in the last few decades?

    A tsunami of negative press is evolving about social media and the ways Russian intelligence services subverted it to sway America during the last election cycle and even today. I am not using any weasel words to suggest that Russian intelligence purportedly or ostensibly hacked the election. The election scandal walks like a duck and it quacks and with two sources of verification I’m calling it. For back-up the Mueller team issued a 37-page indictment against 13 people and 3 organizations alleging it.

    Consider a recent New York Times article, “To Stir Discord in 2016, Russians Turned Most Often to Facebook” by Sheera Frenkel and Katie Benner. It says in part,

     In 2014, Russians working for a shadowy firm called the Internet Research Agency started gathering American followers in online groups focused on issues like religion and immigration. Around mid-2015, the Russians began buying digital ads to spread their messages. A year later, they tapped their followers to help organize political rallies across the United States.

    The social media instruments of choice? Facebook and its photo-sharing cousin, Instagram.

    Facebook and Instagram were mentioned 41 times in the 37 page indictment which charged the Russians with “executing  a scheme to subvert the 2016 election and support Donald J. Trump’s presidential campaign.”

    Now, Facebook and all the other social networks are not charged with any wrong-doing; they are, at least for now, the unwitting dupes of a sophisticated and well-planned effort. Fine, I get it. My dis-ease with Facebook (and Twitter) was summed up well by Jonathan Albright, research director at Columbia University’s Tow Center for Digital Journalism who is quoted in the above article saying,

    “Facebook built incredibly effective tools which let Russia profile citizens here in the U.S. and figure out how to manipulate us,” Mr. Albright said. “Facebook, essentially, gave them everything they needed.”

    If that’s true, and it seems hard to dispute, can social networking tools be unquestioningly used for good ever again? Are they, like fire arms, inherently dangerous and only capable of one use?

    Call me bad names if you wish but as bad as that is, it is the thought that the big social networks like Facebook, Instagram, Twitter and others as well as Google and Amazon all capture a raft of information about us for the purpose of force feeding us things that advertisers desperately want to sell.

    How effective are their tools and techniques? A separate article, also from the Times, shows a small sample of the online ads that the Russians used during the election that pick at the scabs of our society.

    There’s one designed to fan Southern animosity using a Civil War theme,

    There are also ads that tell African Americans not to bother voting or that suggest that the white government is against them. Another showing a picture of Hillary Clinton with an X across it and the caption “Hillary Clinton is the co-author of Obama’s anti-police and anti-Constitutional propaganda.” It goes on and on.

    You don’t have to like Clinton or Trump to understand that these things erode our democracy because they make it harder to have dialog between opposing parties and without dialog there is no compromise. But by extension, if social media can be successfully used against us in an election, and Facebook admits that such ads reached 150 million Americans during the 2016 election, this stuff can and is being turned against all of us in every day commerce.

    They’re still at it,

    Another article in the Times (Feb 19, 2018) “After Florida School Shooting, Russian ‘Bot’ Army Pounced” by Sheera Frenkel and Daisuke Wakabayashi offered this chilling summary,

    One hour after news broke about the school shooting in Florida last week, Twitter accounts suspected of having links to Russia released hundreds of posts taking up the gun control debate.

    The accounts addressed the news with the speed of a cable news network. Some adopted the hashtag #guncontrolnow. Others used #gunreformnow and #Parklandshooting. Earlier on Wednesday, before the mass shooting at Marjory Stoneman Douglas High School in Parkland, Fla., many of those accounts had been focused on the investigation by the special counsel Robert S. Mueller III into Russian meddling in the 2016 presidential election.

    The bots owners don’t care which side of any debate they take and seem to prefer running both sides to ensure divisive reactions. Karen North, a social media professor at the University of Southern California’s Annenberg School for Communication and Journalism summarized the situation,

    The bots are “going to find any contentious issue, and instead of making it an opportunity for compromise and negotiation, they turn it into an unsolvable issue bubbling with frustration,” said. “It just heightens that frustration and anger.”

    My take

    Mostly I am disappointed that social networking isn’t really living up to what we envisioned. It’s a realization of social networking that each of us, according to the theory, is no more than 5 touches from any other person on the planet and for most connections it’s fewer.

    The practical application of social networking has to do with Dunbar’s Number. Robin Dunbar was a British anthropologist who observed that humans can maintain stable social relationships with about 150 other humans. The number puts a practical limit on all kinds of things that depend on close relationships. For instance a military company is comprised of not more than 150 individuals for reasons of cohesion. The company is the building block of all military units because every member has every other member’s back and they all know it because they have personal relationships.

    In the middle ages, monasticism spread for similar reasons. Civilization was saved in Western Europe because whenever a monastery grew above Dunbar’s number, extra members were sent out to establish another miles away. This happened naturally mind you, not because someone had an algorithm but because organizations just got too big for comfort.

    Social networking today has blown up Dunbar’s number. While I wouldn’t suggest that I can have anything like a relationship with the few thousand poor souls who follow me, I can at least keep them interested by occasionally flicking off a crumb of my existence for their consumption. But it’s pointless and all indications are that it’s harmful for multiple reasons to the body politic.

    So I’ve quit Facebook. Actually, they don’t let you quit, they deactivate your account so that you can come back. I really hope I don’t back slide though. I never got much from facebook and the harm it does to society weighs heavily on me. I’m just one person with an opinion but it would be wonderful if other people did the same.

     

    Published: 2 years ago


    Facebook is big, profitable, growing, and at a crossroads. The little social network that started in a Harvard dorm room is no longer the cute app that people can use to hook. It’s going through its terrible two’s as in its second decade and there’s plenty of evidence that the world wants it to use its indoor voice and to play nicer in the sand box.

    Several recent news items provide background.

    First, governments all over the world are trying to rein in its anything-goes approach to its presence on their turfs. In the West we might think a lot of the right to free speech but that’s far from a universal truth especially in the East. An article in the New York Times  highlights Facebook’s fungible approach to free speech in repressive societies like Vietnam where according to authorities, the social network

    “…had agreed to help create a new communications channel with the government to prioritize Hanoi’s requests and remove what the regime considered inaccurate posts about senior leaders.

    It’s hard to tell what’s worse the company’s stand on the first amendment in this country or its capacity to be easily rolled over on the subject by foreign dictators. It seems they’ll do anything to gain market share with which to sell ads. Facebook is happy to aid and abet repression while at the same time it stonewalls investigations into how its service was leveraged in the 2016 election.

    Perhaps most dangerous to life as we know it, Facebook is not in control of its sales process or its platform. In the mad rush to sell, sell, sell their algorithms inadvertently sold questionable ads to people fronting Russian institutions during the 2016 election. After denying it for months, the company finally came clean admitting as much last week. In the process they gave up a number of ads to the authorities and cancelled the accounts of fake individuals. So much for fake news, there are now fake people to worry about.

    Reporting in the New York Times as well as most major media outlets says that

    “Facebook has identified some 2,000 other ads that may have been of Russian provenance,” 

    and CNN chimed in that “…we may not be able to set the number at 2,000, it could be higher.” 

    Worse, it’s clear that law enforcement doesn’t know what it doesn’t know. Another Times story says that

    “The users who purchased the ads were fakes. Attached to assumed identities, their pages were allegedly created by digital guerrilla marketers from Russia hawking information meant to disrupt the American electorate and sway a presidential election.”

    The times also said that we still don’t know what the ads looked like, the content, who paid for them, and how many Americans interacted with them. There’s even more to the story and it’s easily pursued through the links provided in this story.

    This is important because it profiles a company and an industry that grew fast, reaps huge profits and is poised to influence how we live and it is being coy about its legal rights and responsibilities.

    This is a difficult road to tread. On one hand we have federal law, the Electronic Communications Privacy Act xxx 5, which prohibits government from unduly spying on electronic communications. While that might seem reasonable, should the protections of this law apply to foreign governments intent on disrupting a US election at the same time that the Federal Elections law prohibits any spending on American elections by foreign entities?

    In many cases, social networks like Facebook, Twitter, and the other social sites like What’sApp, WeChat, Snapchat, YY, VKontakte (Russia), QZone (China) are awakening to their responsibilities in free societies, or have reached critical mass to impose significant strictures on the free flow of information around the world. It’s a situation that cries out for the “R” word, regulation, before freedom of speech becomes a quaint memory.

    My take

    Some of my friends say this is no different from the US having tried to influence elections overseas for decades. They are right about US attempts but the US always did so in an above board way. We identified ourselves for instance as the Voice of America. We didn’t invent fake news we simply reported the truth, which was often bad enough. In the 1960’s former Illinois Governor and UN ambassador, Adalia Stevenson, told the Soviet Union, “I offer my opponents a bargain: if they will stop telling lies about us, I will stop telling the truth about them.” That’s the fundamental issue.

    In disguising their efforts to upset the 2016 US election, the Russians hid their efforts in social media, inventing fake identities and made effective use of psychological research to plant ideas that divided the American people. They didn’t need to hack into voting machines (though they did some of that too).

    In the aftermath a bigger set of questions arises for free societies and for heretofore unfettered social media companies like Twitter and Facebook. Is there a point beyond which appearing to protect cherished values like free speech does more harm than good? More specifically, is there missing nuance to such positions?

    Other societies such as the EU are chafing under the open rules of a Vox Americana and are they are organizing to circumscribe not only Facebook but the other big American companies that make up what they’re calling GAFA or Google, Apple, Facebook, and Amazon.

    Various governments have serious objections to how these companies operate and it would not be surprising in this era when they are, for the most part, maturing into their colossal world-girding selves, to see some initiatives to regulate or even break up these behemoths. It would be smart if the GAFA members plus Über and a few others, decided to short circuit the uproar and develop a set of rules to live by that go beyond not being evil, whatever that means. But that’s not how free markets typically work.

     

    Published: 2 years ago


    Denis-PombriantI swear I was getting through this and trying to move on. She wasn’t my favorite candidate but when you consider the alternative she looked like George Washington in a pantsuit. Like many people I had moved on from denial and anger to Elizabeth Kubler-Ross’ next stage in the grief pyramid called bargaining. He can’t be that bad…they can tame him…I’m going back to work, he can’t chase me there…I’ll be okay.

    But noooo! A brief story in the New York Times today says Donald Trump, incipient POTUS is planning to hold a technology conference next week. It’s right here under this headline, “Trump Plans Technology Conference With Silicon Valley Executives.” The article by David Streitfeld, Maggie Haberman, and Michael D. Shear covers a lot of ground what with Trump also seeming to have cancelled the next generation of Air Force One today, which is also in the piece.

    Says the article, “The list of those being invited was not immediately clear, but they could include Mark Zuckerberg of Facebook, Timothy D. Cook of Apple and Sundar Pichai of Google.” Sure, that’s right, Silicon Valley CEOs have nothing scheduled that far out so of course they’ll all trudge over to Trump Tower. Whatever it is, when a president asks for your time, he’s doing it in the name of all the American people so you more or less have to attend.

    The one saving grace in all this might be (and we really don’t know all the details yet) the fact that these are all consumer technology mavens so far. Maybe Trump has a punch list of social media enhancements to go over or maybe he intends to build a wall between our electrons and the rest of the world. Or maybe Trump just wanted to call a fly-in for rich guys to compare private aircraft. His is bigger, you know.

    Regardless, I’ll withhold judgment on Trump’s tech chops until I know if this is just show and tell for social media or if he really wants the skinny on what to expect in areas like machine learning, AI, the IoT, and a half dozen other techno-wizbangs that will rock his world soon. I’ll begin to worry when Ellison, Benioff, and Gates get summoned.

    Published: 3 years ago


    indexMicrosoft’s acquisition of LinkedIn for more than $26 billion raised a lot of eyebrows for good reason. True, the acquired company is valuable and generating revenue but like most of the social networking space, it is far from healthy and one wonders if Microsoft could have gotten a better deal.

    According to a colleague at the Enterprise Irregulars, Ross Mayfield, Ellen Levy reported that the deal can boast a number of superlatives if you look at it right, among them,

    • The largest sale of a consumer Internet company in history;
    • The largest sale of an enterprise software/cloud company in history;
    • The third largest sale of a technology company since 2001; and
    • The largest acquisition ever made by Microsoft.

    With those attributes you might expect that LinkedIn is in a really hot sector and everybody wants to get it at any price. It looks like a regular feeding frenzy. Well, hold on big guy, here are some other numbers to consider.

    Facebook announced revenue in Q1 2016 at $5.2 billion and profit of $1.51 billion tripling its year over year comparison according to a BBC News article that you can read here. Good for them.

    But now consider Twitter, which according to CNN Money has lost a cool $2 billion since 2011. I wonder if this can be construed as an illegal campaign contribution to The Donald. At any rate, Twitter has never turned a profit. Yikes!

    Then there’s LinkedIn. According to a Reuters article from February 4 of this year that you can find here, “LinkedIn Corp forecast first-quarter revenue and profit below Wall Street estimates as growth slows in its ads business and its hiring services face pressure outside North America, dragging its shares down 28 percent after the bell.”

    The article goes on to say that, “Online ad revenue growth slowed to 20 percent in the fourth quarter from 56 percent a year earlier as automated ads offered by Alphabet Inc’s Google make its traditional ad displays less attractive to advertisers.” Finally there was this, “Its revenue forecast of about $820 million also missed analysts’ expectations of $866.9 million by a wide margin.”

    Suddenly it looks like social media has become a winner take all market accentuated by Metcalf’s Law which states that the value of a network is directly proportional to the number of nodes i.e. users in this case. Why use anything but the biggest network unless it’s specialized as LinkedIn is because of its sales and HR focus.

    This is happening despite the high acceptance of social media in everyday life, just ask The Donald. Social has rapidly become the thing everybody loves to use and no one wants to pay for. The advertising business model that most companies rely on doesn’t help.

    Advertising has its limitations. There is a huge pool of money available for online ads but huge is not infinite. Just as there is lots of music available, people only want to pay for hits. If you combine Metcalf’s Law, which tends to limit the number of viable networks in this space and add in the reality of the fickle consumer you have an instant recipe for a declining market, which is what we see.

    Don’t worry, social media is too important to go away. It’s so important that it has commoditized its market into a virtual singularity. That’s the bad news too. The social market looks like it can support 2 styles; say Facebook’s and Twitter’s. There might be additional vendors in the space for a long time especially if larger companies buy them and they function as loss leaders. That’s ultimately the vision I see for any social company not named Twitter or Facebook.

    Published: 3 years ago