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The Collapse of Facebook Is Closer Than We Expected
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The Collapse of Facebook Is Closer Than We Expected

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WASHINGTON – January 29, 2019

Civilization will go into decline if it loses electricity. But if Facebook turns off, other social networks and sites will bloom, as was discovered accidentally on August 3, 2018, when Facebook was disconnected for 45 minutes for technical reasons. It turned out good for other sites, especiall those responsible for content distribution.

First, all global traffic increased by 2.3%, with an almost 11% increase in the number of direct visits to sites (that is, not via links from other resources). In these 45 minutes, the use of a variety of applications increased by 22%. Finally, search traffic increased by 8%. This data, reported at the Online Journalism Awards ceremony 2018 in September, shows how great Facebook's role is in shaping the global agenda. And if Facebook suddenly disappeared, the internet has other ways to fill the day.

Facebook's role is so great that advertisers can't help but embed the platform into their budgets. They don't question its effectiveness. But in vain. Although Facebook forms the modern media, its ad effectiveness is questionable. And although advertisers bring money there (in the second quarter of 2018, they brought $13 billion), some are wondering about the quality of the audience received on Facebook.

Earlier InvestorVillage.com filed a lawsuit against Facebook, insisting that it incorrectly represents the target audience to advertisers. In particular, Facebook promised that the advertiser would reach the right audience with an accuracy of 89%. The portal spent as much as $1,600 on two Facebook campaigns to reach out to people who are interested in the stock market, and have a higher education and $250,000 in annual income. The campaign has collected a lot of likes, but when the advertiser analyzed the profiles of users who liked his messages, it turned out that only 40% of the likes came from the target audience. That is, the targeting accuracy was below 60%.

The Collapse of Facebook Is Closer Than We Expected

"Facebook's advertising pitch is that you can put into the program exactly your target audience," said Seth Lesser, a lawyer representing InvestorVillage in the case. "Facebook says, we can get you those such people at 89 percent accuracy."

The lawsuit again raised the issue of the infallibility of any monopoly. When the platform dominates the market and the slightest change in its behavior affects global indicators, the effectiveness of local shares may be lower than expected. It's impossible not to be on Facebook. But this does not mean that the presence brings results by default.

In a statement to NPR, Facebook responded: "There's no merit to these claims. Transparency is at the heart of our relationships with advertisers." The company points to its advertising terms, which state that Facebook "cannot guarantee in every instance that your ad will reach its intended target or achieve the outcome you select."

Facebook’s fall has only just begun

The modern Facebook platform is broken and neither man nor machine can fix it.

Even after losing about a third of its market capitalization, it could still turn out to be one of the biggest short-term falls of all time.

According to the recently released documentary "The Cleaners", the current situation of Facebook and the internet as a whole is very depressing. During his apology tour, Mar Zuckerberg regularly referred to the moderators' staff, which the company hired as one of two key solutions -- along with artificial intelligence -- for the platform's content-evil. He didn't report that most of the army consisted of subcontractors working in developing countries.

As the film shows, almost for days on end looking through thousands of images or videos, low-paid employees of the media giant are working ostensibly for the sake of moderation of Facebook to view child pornography, rape, murder, torture, beheading, cruelty and so on.

They are not experts in the field or region in which they work. They rely on "guidelines" provided by Facebook -- "dozens of unorganized PowerPoint presentations and Excel spreadsheets with bureaucratic titles such as Western Balkans Hate Orgs and Figures and Credible Violence: Implementation standards,” as the New York Times reported last fall.

People are forced to use Google Translate due to their lack of knowledge of the language. As the recent op-ed by John Naughton in the Guardian explicitly states in its headline: "Facebook’s burnt-out moderators are proof that it is broken."

Bloomberg statistics reported that 41 of 53 analysts from various companies had made Facebook advertisement purchases for from $150 to $200, though, given Facebook’s problems, this was shortsighted at best.

Buyers of advertising dollars are already being transferred to the competitors' platforms. Governments are stepping up efforts to dramatically limit Facebook's ability to collect data. Just this week, Germany banned third-party data sharing. The company is under investigation by the FTC, Justice Department, SEC, FBI and several government agencies in Europe. It was accused by the UN of playing a "determining role" in the genocide in Myanmar. Sooner or later, Facebook's board will see no choice but to remove Sheryl Sandberg and Mark Zuckerberg.

Everyone remembers the Facebook fall last summer, which was the largest in history, and many have already learned from these mistakes.

Now in the very short term, the users' negative reaction can simply hinder the growth of their income. In the long-term, however, the institutionalized inability to see and respond to the platform's flaws could make Facebook the Digital Age's Enron -- a canonized example of how greed and corruption can topple even the most powerful.

According to data recently released by Statcounter, Facebook’s global social media market share dropped from 75.5% in December 2017 to 66.3% in December 2018. The biggest drop was in the U.S., from 76% to 52%. As Cowen survey results released this week suggest, these engagement declines will continue to depress the company’s earnings. Surveying 50 senior U.S. ad buyers controlling a combined $14 billion in digital ad budgets in 2018, 18% said they were decreasing their spending on Facebook. As a result, Cowen estimates the Facebook platform will lose 3% of its market share.

Among the other hottest events:

  • The media reported that Facebook knew in advance about the inaccuracies of the video audience metrics that it provides to advertisers. The videos were repeatedly fabricated and the views were inflated.
  • The New York Times later wrote that British lawmakers released 250 pages of Facebook's internal emails, which show that "the company’s executives were ruthless and unsparing in their ambition to collect more data from users, extract concessions from developers and stamp out possible competitors."
  • The developers' mistake allowed third-party companies to access photos that people didn't share publicly. About 6.8 million users were potentially affected.
  • Facebook gave the world's largest technology companies far more intrusive access to user data than previously disclosed, including the Russian search firm Yandex.
  • WhatsApp chat groups are used to spread illegal child pornography disguised as end-to-end encryption of the app.
  • The New York Times received 1,400 pages of Facebook's moderation guidelines and found an illegible mess of confusing language, bias, and obvious errors.

Facebook currently has 2.27 billion monthly active users worldwide. Every 60 seconds, 510,000 comments are posted, 293,000 statuses are updated and 136,000 photos are uploaded to the platform. Instagram, which allows users to edit and share photos as well as videos and is owned by Facebook, has more than 1 billion monthly active users. WhatsApp, the encrypted messaging service that is also owned by Facebook, now has 1.5 billion monthly active users, more than half of whom use it several times a day.

The Collapse of Facebook Is Closer Than We Expected

Later, the film shows a little bit of the essence of the huge network. As everyone already understood, the moderators are not able to change anything. In addition, working conditions are very poor. Artificial intelligence is also not the way out of the problem, as practice has shown.

According to Wired, Facebook claims that 96% of the adult and nude images users try to upload are now automatically detected and captured by AI. This sounds like a success until you consider that this error rate means that 1.3 million such images were published in the third quarter of 2018 alone (30.8 million were taken down).

In fact, the company admitted that the number of views with nudity or sexual content nearly doubled in the 12 months ending in September. And detecting nudity is a much easier task for a rules-based algorithm than determining the difference between real and fake news, between hate and satire, or between pornography and art.

Facebook has economic and cultural opportunities for hundreds of millions of people around the world. It cannot be blamed for every destabilized government, war or murder in every region. However, it is becoming increasingly clear that one profit-oriented platform that connects all the people in the world with all the information in the world, which Zuckerberg envisions, is a completely misguided idea. This leads to too much power in the hands of too few. This allows bad actors to centralize their bad actions. And it's incompatible with a world that values privacy, property, and truth.

Governments are aware of this problem. Like the public. And, of course, competitive innovators are looking to expand or introduce alternatives. Together they will pinch off the power and profitability of Facebook. Given that the company's leaders still seem blinded and irrevocably tied to their business model and ideals, we doubt they can prevent an offensive.

Facebook ran aground: Zuckerberg stopped doing what he was always good at... earning money

Some experts don't see the disaster in the current Facebook collapse. This is explained by the fact that the company's shares before Black Friday were at a historic high, having increased by 23% from the beginning of 2018.

"It is unlikely to be Armageddon for Mark Zuckerberg," said the analyst of the IT market Dave Lee.

In July, the founder of the most famous social network reached the third place in the list of the richest people in the world according to Bloomberg. At the beginning of the month, his fortune was estimated at $81 billion.

The media then began to write that the scandal with the data leakage of Facebook users began to be forgotten -- the value of the company's shares is growing (for the third quarter of last year, the profit was more than $5 billion dollars, which is a third more than the same period two years ago).

"And yet the turmoil around the social network was not in vain-popularity fell, reputation undermined. But not only because of allegations of stealing data on changing social networks come messengers," explains Business Reporter at Mashable Jason Abbruzzese.

In early March, a data leak of 87 million users was revealed through the British company Cambridge Analytica, which was accused of biased political advertising. The main scandal was that it could affect the election of the US President, and the British company saw the "hand of the Kremlin.”

"The fact that Russia used the Facebook platform to disseminate highly controversial from a political point of view, advertising is a systemic threat to the Empire that Zuckerberg built for 13 years," says Abbruzzese.

The social network denied accusations of collusion with Cambridge Analytica and said that access to this information was given solely for "scientific purposes.” Due to the data leakage, Zuckerberg testified before the U.S. Congress and the European Parliament.

The head of Facebook admitted that his company made mistakes that led to the fact that the personal data of millions of people was used by political strategists, and promised to complicate the access of third-party applications to any information about users.

And in June, it turned out that Facebook provided partner companies with access to users’ and their friends' data without their consent, even after it said that it would no longer transfer such information to third parties.

However, Zuckerberg believes that Facebook treats personal data more carefully than the government.

Senator Dean Heller asked Zuckerberg if he believes that Facebook is "more responsible with the personal data of millions of Americans than the federal government." After a long pause, he replied, "Yes."

Then Zuckerberg noted that Heller's question was not quite correct. Data collection by the state is carried out without the voluntary consent of the people, while on Facebook people agree to share the information they publish.

Facebook could become a paid service

Zuckerberg made it clear that Facebook could develop a paid version. He added that this doesn't contradict the company's principles, according to which the social network should remain "free and accessible to all," as "there will always be a free version.”

The introduction of paid access should help Facebook reduce its dependence on third-party advertisers--companies like Cambridge Analytica.

Zuckerberg doesn't consider himself a monopolist

When senators asked about who is Facebook's main competitor, Zuckerberg said that different segments of his business compete with many companies, so it makes no sense to single out one.

"Don't you think you're a monopolist?" one of the senators asked.

"No, I certainly don't think so," Zuckerberg replied.

However, if Facebook fails, other networks may soon develop rapidly, experts say.

Apple and Google will try to establish their own social networks. According to analyst Dave Smith, Google is already developing a new platform, despite the recent closure of the failed Google+.

There will be less freedom of speech and more internet trolls. Autocratic regimes and leaders will use platforms like Facebook (which is already blocked in China, Iran, North Korea, and Bangladesh) to limit, close, or nationalize.

Instagram will become more like Facebook. Also, social networks will have to face a wave of accusations of insufficient security measures and insufficient fight against the objectification of women. At the same time, the platform will become one of the main places for cyber-shopping.

YouTube intends to produce more original content and outdo Netflix. Since 2018, Russian viewers have been able to watch movies and TV series on YouTube Premium.

Experts warn Twitter about the danger of being removed from AppleStore due to the spread of pornographic content. After Tumblr’s removal, this is a very real prospect.

Tumblr itself is predicted by several clone sites, after which the original social network will become much stronger.

Also, experts have already told that humanity expects the development of artificial intelligence in 2019.

Author: USA Really