Facebook thinks it’s more important to be understood than liked. Facebook is a victim of its own success in 2020, at least the legacy flagship blue app’s success.
Facebook has failed miserably to monetize WhatsApp, Instagram and Messenger. Facebook’s pivot into blockchain and dating appear in an eternal pipeline. Don’t get me wrong, Facebook is still the best targeted algorithm that can measure intent and find a company’s addressable market. But it is a one trick pony with horrible PR and a leader full of illusions of grandeur.
Meanwhile, Facebook is mostly thought of as as the cigarettes of the mobile era.
Facebook Is a Privacy Facial Recognition Tech Villain
Amid being probed for antitrust concerns amid its legacy app acquisitions, Facebook is always in legal trouble. It has to pay $550 million to settle a privacy lawsuit over facial recognition tech. The case has been ongoing since 2015, for using facial recognition without proper consent. ByteDance has since cloned this approach to gather information on everyone for the Chinese Government.
Welcome to the Google era, guys. However not all is great with the growth of this family of apps. Facebook’s family of apps ARPU came in at $7.38 per user, which was less than the company’s ARPU for Facebook, which was $8.52 for the quarter. This means the old boring Facebook app still is the only real winner for this ad-firm that fails at most everything else but targeting advertising.
Facebook’s Growth is Slowing
Yesterday’s earnings reports show Facebook shares hit by the slowest growth in years and higher expenses. Not a good sign for the zuck machine. Over the past year, Facebook has struggled with numerous regulatory challenges and 2020 should get worse. The stock is still doing fine over $200. But advertising growth has now dipped below 20% and that’s a psychological signal that this might be the peak of this company in its life cycle, as younger companies like ByteDance innovate and monetize better.
ByteDance just needs to clone Facebook’s legacy blue app and do advertising as well, to more or less make Facebook irrelevant. This as Amazon, Snapchat, Pinterest and others are expected to take some of the marketshare in Ads that Google and Facebook hoard in monopolistic fashion. Trust in Google and Facebook are both in decline.
Facebook says it has agreed to pay $550 million to settle a class action lawsuit regarding its use of facial recognition technology. The news, first reported this evening by The New York Times, was part of a disclosure the company made as part of its fourth quarter earnings report yesterday. Facebook has to acknowledge it is the bad guy of the internet, when push comes to war. Zuck is a sucker.
Facebook’s reputation has never really been worse. The case against Facebook has been going on since 2015. The lawsuit alleged that Facebook’s initial version of the its Tag Suggestions tool, which scans a user’s face in photos and offers suggestions about who that person might be, stored biometric data without user consent, violating the Illinois Biometric Information Privacy Act.
Facebook’s Reputation is Damaged
Facebook ruined itself with a lack of privacy features and data sharing with its partners without obtaining the consent of its users. In spite of talent it has shown poor leadership in developing new products or expanding its business model to anything outside of advertising. This means, unlike Microsoft or Amazon, it’s vulnerable to disruption.
Facebook’s high usage globally also shows incredible lost opportunities regarding ARPU. The big difference comes down to WhatsApp users who don’t also use the other apps, and Facebook’s inability so far to generate meaningful revenue from it. Tencent is upgrading WeChat to compete with TikTok, but what can Facebook do? Instagram is a show, WhatsApp is a chat tool, but neither really drive much else.
Facebook’s full-year 2019 costs and expenses came in at $46.71 billion, up 51% compared to its total in 2018. Facebook’s expenses are likely to increase as it pivots to being a privacy focused platform with more features designed to fool users into staying with their platform. But the sense of connection and security are gone.
Facebook, the world’s second-biggest seller of online ads, has been under fierce scrutiny worldwide over its privacy practices, along with criticism over how its services have been manipulated to spread misinformation. Facebook for instance uses political Ads without fact checking even when they are deliberately dishonest and inaccurate.
The company said that an average of 2.89 billion people used the family of apps each month, while an average of 2.50 billion used Facebook or Facebook Messenger. Facebook is reaching its zenith of usage but keeps polluting the world with more Ads, without being a honest custodian of this power and privilege as a media company or being regulated as such.