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Something Fishy with Facebook

Facebook is a platform most of us have incorporated into our daily lives. It provides us with an unrivaled way of sharing our lives and staying in touch with friends. Like many products of the digital era, the service is provided to users completely free, and relies on advertising as a source of revenue. This model has worked exceptionally well for companies like Google but for Facebook, the model just isn’t doing it.

Just recently Facebook went public, and its IPO was more or less a flop. Sure they managed to secure the funding they were looking for, but investors weren’t so warm to the business model as Mark Zuckerberg and his co-workers had hoped. When Google went public the price was set at $85 a share, it opened at $100 and has grown and grown closing Today, May 31st, 2012 at $580.86. Facebook on the other hand, was priced at $38 a share, it opened at $42 and has been slowly dropping in the days since, closing Today at 29.60. That means that if you were an investor part of the IPO who had invested a cool $1,000,000 in the company, you’d be left with only $778,947 or a loss of over 22%. That hurts. Some analysts believe the price will eventually settle around $15 a share. Like Google, Facebook has millions of active users and a similar revenue model, so why don’t investors want to support the company?

 

When was the last time you clicked on an advertisement on Facebook? If you’re like me, you have installed the simple Ad-Block extension for Mozilla Firefox (or Google Chrome) which auto-magically keeps itself up-to-date and prevents me from seeing nearly all ads on the internet, including those on Facebook. Honestly, I had forgotten Facebook even had ads. In addition to blocking Facebook’s advertisements in my browser, I always use Facebook’s own feature of hiding all content from 3rd party apps. Whenever I see “Joe needs your help in this game!” on my news feed, I promptly hide it, and never see content from that app again. It’s a wonderful feature, but it’s hurting Facebook every time. Facebook has the difficult position of balancing their users desire to filter the content they see with making money and so far, there is no easy solution. Recently Facebook has been toying with the ability for content producers to pay to promote their content, something that bothers many Facebook users. It is clear that Facebook has and will suffer a public backlash from its users if they visibly and directly increase the advertising on the website so I believe that Facebook is up to some dirty tricks to get the job done.

And now to the point of this post. Have you ever seen a post in your news feed that was shared or liked by one of your many friends that has an astronomical amount of likes? I’m talking hundreds of thousands of likes for a picture of a cute puppy. The caption on the photo is usually something along the lines of “LIKE this picture within 2 SECONDS if you think this puppy is cute. SUBSCRIBE to me and I will give you 2,000 FRIEND REQUESTS.” Sounds just like annoying internet trolling right? The interesting part is when you try to block that user so you won’t have to see their spam comments any more. Every single user I’ve ever seen that fits this description is unblockable. When you try to block the person, Facebook spits out a message saying that the blocking system is overloaded and suggests trying again later. No matter how many times you try, these people are simply unblockable. At the same time the blocking system is apparently overloaded, you can freely and instantly block your friends and any other normal Facebook user. I suspect that Facebook is actually behind these dummy unblockable accounts. It is my hypothesis that they are using these accounts with the intent to access users who have otherwise blocked them for advertising and other data purposes. That way, instead of putting ads directly on your feed, where they are obviously from Facebook, the company can publish ads from these dummy unblockable accounts and pass the blame on the fake user. Of course this is nothing more than a conspiracy theory from someone who has way too much time on his hands. Still, considering some of Facebook’s past dubious practices, I wouldn’t be surprised if it were true.

Another pet peeve of mine regarding Facebook is with the news feed. Starting a few months ago, Facebook changed the news feed, giving you “Top Stories” first. They claimed these top stories promoted friends you interacted with more often, and thus would be more interesting in hearing about, pushing your acquaintances lower in priority. To satisfy users they gave the option at the top to switch the news feed to “Most Recent” first which restores the feed to a classic chronological order. Have you ever noticed that no matter what you do, the feed will always default back to “Top Stories” every time you open the website? Each time, users must manually switch to the classic view, and this is where Facebook’s sneaky tricks come into play. Just now at the top of my feed was a distinctly different entry titled which showed trending videos, and of course, upon further inspection, this was nothing more than a link to Metacafe’s app which boasts more than 7 million active users per month. This isn’t the first time an app has been given special distinction atop my news feed. A few months ago I struggled to get rid of the Washington Post Reader app’s unfair priority. I say struggled because it took weeks of hiding before it finally went away. What spawned this rant was my inability to hide one particular game from my news feed. Unlike every other post around it, when I clicked on the drop down for this spam post, it just appeared the load indefinitely, never allowing me the prompt to block it.

 

I understand Facebook needs to make money somehow, however I feel they are going about it in all the wrong ways. Instead of being direct and up front with their users, Facebook employs deceptive and possibly unethical practices. Unlike Google, Facebook is a company that has done only the opposite to try to gain my trust. It seems that those in charge at Facebook think they need to trick their users to sustain their growth. I have no doubt that companies pay Facebook a healthy amount of money for that primo spot in the “Top Stories” yet these companies are not seeing the returns they’d like. I read recently that a number of Facebook’s leading advertisers had pulled their ads from the platform citing a low return. It is things like this that make me believe that the company will go to these extreme and dishonest measures to try to save their failing business model.

Facebook has an amazing and truly world shrinking product, but presently they are struggling to make it all work. I’m interested to see what the future of this company holds. Will it go on to join the likes of Microsoft and IBM as pillars of the blue-chip industry, or will it ultimately collapse and die like one time rival MySpace? Considering their IPO, failing revenue model, and outlandish spending (1 Billion for a product with zero revenue stream? Really?) I wonder if their fate isn’t already sealed.

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