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Facebook May Finally Have To Compromise Its User Experience In Order To Keep Growing (recode.net)

Posted by msmash on from the how-to-maintain-growth dept.

Tony Haile, writing for Recode: Facebook has a problem. What has driven its growth for the last five years won't drive its growth for the next five. However, the options in front of the company involve the kind of user experience compromises that have maimed platforms that preceded it. Facebook makes its money from the West. Some 30 percent of its users and 73 percent of its revenue is from North America and Europe. The monthly average revenue per user for Western users is $3.33 versus 53 cents for the rest of the world. Facebook is a global company, but a Western business. Facebook's user growth in the West is a little over 1 percent a quarter. In North America, Facebook's monthly active users represent 80 percent of the population above the age of 14. If Facebook wishes to grow its Western revenue at the rate its shareholders demand, a 1 percent user growth rate will not do it. Absent rapid user growth, the other lever for increasing advertising revenue is increasing the number or value of ads that are shown to existing users. However, the News Feed is close to saturation. Facebook believes that it cannot stick any more ads in the News Feed without adversely affecting user retention. This combination of slowing user growth and News Feed saturation has led Facebook to warn of a rapid deceleration in revenue growth over the next six months. For the first time in years, Facebook needs a new lever to pull.

15 of 122 comments (clear)

  1. Not sure about the rest of you by H3lldr0p · · Score: 5, Informative

    but I don't see any advertisements. Ever.

    No game crap and only a few reminders that I asked for.

    Of course, that's because I installed adblock and anti-js tracker everywhere I go. So that may have something to do with it.

    Whatever money FB is making off me can't be all that much.

    1. Re:Not sure about the rest of you by Anonymous Coward · · Score: 4, Insightful

      but I don't see any advertisements. Ever.

      Neither do I. But that's because I closed my Facebook account in 2010 and never went back.

    2. Re:Not sure about the rest of you by gweihir · · Score: 3, Insightful

      That or never even opening an account is the only sane way to deal with this crap.

      --
      Most ACs are not even worth the keystrokes to insult them. Be generically insulted by this and ignored otherwise.
  2. Seriously... by toonces33 · · Score: 2

    Who didn't see this coming..

  3. I don't think "may" means what you think... by nwf · · Score: 4, Funny

    Their user experience has been compromised for ages. I've largely given up following anything. Between the amazingly poor ads, the random ordering of posts and all the fake news and click bait, it's about 92% crap. What's next auto-playing videos? Oh wait, they have those as well. Maybe they'll just start saying "Facebook has detected a virus!" Actually, they kind of already do that as well. They just don't offer to sell you something to "fix" the problem.

    Maybe a new cell phone? Oops there as well. Maybe they'll just start calling people and asking them to go online.

    --
    I don't know, but it works for me.
    1. Re:I don't think "may" means what you think... by cunina · · Score: 2

      There are limits to what a business can accomplish, and it sounds like you've reached a fairly hard boundary. If your shareholders don't understand that, they should piss off or sell - sounds like you don't need additional capital at this point anyway.

  4. Good riddance by epyT-R · · Score: 3, Insightful

    kbye. I hope the company dies. It's entire reason to be is to 'compromise' its users.

  5. Growth Imperative by pefisher · · Score: 4, Insightful

    Well, what these companies typically do is make the changes that alienate larger and larger fractions of their old customers (e.g., Ebay). Investors then accept whatever the resulting growth rate is. They accept that rate because it's the maximum they can have. And psychologically, that's all they really want: the maximum. The actual growth rate is what it is, and their greedy little minds accept that. Then everyone quits talking about that particular company. They just click along making all the money that they can make. As long as they are still profitable, all is well.

  6. The true face of Facebook by xarragon · · Score: 5, Interesting

    I have been waiting for this moment for some years, the point at which we get to "..witness the power of this fully operational personal data trove". Facebook and Google has more information about people than any other companies.

    As pressure for profit increases, more and more uses for this data will be found. I fear that the most revenue-generating uses might be the ones that negatively impacts peoples lives in a big way. Like health insurance, mortgages, recruitment or predictive law enforcement.

    1. Re:The true face of Facebook by swillden · · Score: 5, Informative

      They need three companies to activate that feature. The first one is Google, the second one is Facebook. We know the third one won't be Apple

      Google would refuse, so if three are needed (why is that?), and assuming that Facebook would play ball, you need two more.

      How do I know Google would refuse? I work for Google and anything like that would be so severely opposed by the culture at Google that there's just no way it would happen, even if management wanted it to -- and management wouldn't. Sergey Brin, in particular, would be up in arms, as would most of the senior technical staff and lots of the rest. Larry Page would also be opposed, but I don't think he'd throw the screaming fit I'd expect from Brin. About the only way it could happen is if it were forced by legislation, and it wouldn't happen quietly, the lobbying would be loud and ferocious. If it still somehow happened there would be a hundred Google Snowdens. Or a thousand. I'd be one of them (though I think I could do it without being caught or having to flee).

      Speaking of Snowden, that's a great example. I was working for Google in 2013 when Snowden's leaks came out and the immediate reaction to the PRISM stuff was utter disbelief with a strong leavening of readiness to grab pitchforks if it were somehow remotely true. There were some really heated TGIFs (weekly company-wide meeting). Then we found that the the NSA was tapping fiber between data centers, and people calmed down since it meant Google wasn't cooperating... and immediately set about making sure that every bit of data flowing across Google networks was encrypted. We already had a great key management infrastructure in place and the "encrypt everything" project had been in progress for some time.

      And when I say "immediately" I mean "faster than was realistically possible". Deadlines for full compliance were short and completely immovable. One of the teams I work with made heavy use of sharded MySQL (which unlike Bigtable provides transactional consistency) via JDBC, but the standard MySQL JDBC stack provides no mechanism for encryption and it wasn't feasible to just run it in a TLS tunnel. So the team had less than 30 days to design, build, test and deploy a secure replacement that integrated with Google's key management infrastructure. And note that it had to work at Google scale; thousands, if not tens of thousands, of queries per second. They did, at least, already have a secure substrate to use. Google's key management and secure networking infrastructure is great.

      Close to the deadline, it was discovered that there was a nasty and very hard to debug race condition that caused intermittent deadlocks (IIRC; it was something like that). In desperation the team said that if they didn't get more time they might have to just shut down for a week or two. Since they built/ran the billing systems, which collect and distribute all the money and a shutdown would inevitably create losses in the tens if not hundreds of millions of dollars, they figured that would get them a postponement. The answer from management was that they might have to shut down for a week or two, the deadline was not moving. As it turned out some amazing heroics plus a fair amount of bubble gum and baling twine kept things going until they solved all the problems.

      So... that's how Googlers feel about sharing information with the government. And if that really surprises you, then you don't know nerds.

      People assume that since Google tracks a great deal of user information to use in targeted advertising that Googlers must not care much about privacy, but nothing could be further from the truth. Google tracks user data, but is extraordinarily careful to ensure that it doesn't leak, not even internally, and isn't used for other purposes. And it is not sold; to government or anyone else.

      It's no accident that Google is not among the many, many companies who've suffered leakage/loss of user data (with the exception of whatever

      --
      Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
  7. They already compromise their users.. by Rick+Schumann · · Score: 2

    ..so how is it really any worse if they compromise the 'user experience', too?

  8. Fuck the shareholders by DontBeAMoran · · Score: 2

    If Facebook wishes to grow its Western revenue at the rate its shareholders demand

    The shareholders seem to think we live in an infinite world with an infinite number of people with internet access. However, reality doesn't fit their growth models based on unicorn farts and pixie dust.

    --
    #DeleteFacebook
  9. REAL problem of Facebook is NOT going away! by shanen · · Score: 2

    Too early for funny or anything closer to insight? Anyway...

    Certainly Facebook deserves bankruptcy. Try to imagine if all the time wasted on Facebook was invested in ANYTHING useful. Too bad it isn't going to happen.

    Facebook has first-mover advantage in an age of cancer. Humans are social animals, and even the extremely fake social is highly attractive, even addictive, to many people. Maybe the entire system will collapse and take Facebook down with it, but I'm not advocating for the Trump solution.

    Is there any solution? Maybe, but I doubt it. Just increase the VALUE of the human time spent on Facebook so it isn't such a total waste of humanity. Unfortunately, that would require tracking and visualizing the reputation, which would add complexity that Facebook doesn't want to invest in.

    Even worse, Facebook would have to change their business philosophy as regards the time of members. Right now Facebook thinks MORE time (wasted or not) is ALWAYS better, and they are NOT interested in helping members know when to stop wasting time. As long as Facebook claims MORE time, it's more fake money in the fake market cap.

    Enough time "invested" in Slashdot, but I'll close with my favorite joke these days: Details available upon polite and sincere request. ROFLMAO.

    --
    Freedom = (Meaningful - Coerced) Choice != (Speech | Beer^2), and sad sock puppets' bad mods avail them naught.
  10. Grow, grow, grow by tylersoze · · Score: 2

    I love how the basis of our entire economic system is built around unending growth. That's all you ever hear about, the company has to grow, our economy has to grow, grow, grow, grow. Yep I can't see any long term problem with unlimited exponential growth, no siree.

  11. Non sequitor by bluegutang · · Score: 2

    This combination of slowing user growth and News Feed saturation has led Facebook to warn of a rapid deceleration in revenue growth over the next six months. For the first time in years, Facebook needs a new lever to pull.

    "A rapid deceleration in revenue growth". So they are still going to make money? They are still going to make more money than they ever did in the past? Only the RATE of revenue growth is going to drop, and this is a cause for panic? Here's what is wrong with the US economic system.