5 ms·

I really wish the media would distinctly separate media companies from technology companies. Facebook is not a technology company. They are a media company.

• origami777 9y ago
  Why do you think they should be classified as a media company? Is it to apply the relevant regulations? In my eyes, Facebook is a company of software and hardware engineers. They produce software as a service. That sure sounds like a tech company. If regulations are what you're after, new ones should be created for their specific business.
  • mhluongo 9y ago
    What makes you think they produce software as a service? Their users aren't their customers, advertisers are.
    • origami777 9y ago
      That term refers to software applications made available in a browser. That's how I view Facebook.
      • bogomipz 9y ago
        No "software applications made available in a browser" is not the single defining characteristic of SaaS. SaaS is foremost a licensing and delivery model although it is often accessed via a browser it is not a prerequisite. There are SasS offerings with desktop integration points, sync clients, native iOS apps etc.
        • mcny 9y ago
          Sorry if this is an obvious question: would you call Microsoft Office 365 a software as a service? They charge per user per month I think.
          • bogomipz 9y ago
            Yes I would consider Microsoft Office 365 a SaaS offering. It's licensing is done via a subscription and delivery is via infrastructure managed by MS.
      • mhluongo 9y ago
        They aren't providing software as a "service"- they're providing user data and eyeballs as a service. You're confusing the business model (advertising) and the medium (software).
        • origami777 9y ago
          I think we've come far enough to realize that there are many business models to the concept of software being delivered in a browser as a service. The original model was companies paying a monthly fee for a subscription. Now we have many different types of models. The point is that FB makes an application for consumers and businesses. It is delivered as a service through a browser.
      • lmkg 9y ago
        That's the medium, not the product. A company that makes radio program, and generates revenue by selling ad spots, is a media company. A company that makes TV programming, and generates revenue by selling ad spots, is a media company. It's in the same line of business as the radio company, even though the radio company doesn't have any soundstages or camera operators. And guess what, both of those companies stay media companies even if they start streaming sound or video in a browser instead of on the TV. That's just replacing the distribution team, a rather small part of their business by headcount. They're still media companies, because they make money by selling ad space in content. The distinguishing feature of facebook is that it takes user-generated content, and generates revenue by selling ad space. That's the "social" in social media, it's what makes social media different from traditional media. But the other part is the same: They generate revenue by selling ad space inside the content that they manage.
  • bogomipz 9y ago
    >"They produce software as a service." No Salesforce, Box, Slack, Zendesk - these are examples of SaaS companies. Customer pay for those services, the service is the product being sold. With FB the user is the product being sold.
    • deleted 9y ago
      [deleted]
    • jauer 9y ago
      > With FB the user is the product being sold. This is not strictly true. FB makes Workplace, which is a sort of Facebook for internal and cross-company collaboration (competing with Slack): https://www.forbes.com/sites/kathleenchaykowski/2017/10/26/facebook-workplace-spreads-to-30000-businesses-nonprofits/#719de5c01ec2 https://www.forbes.com/sites/kathleenchaykowski/2017/10/26/f...
      • bogomipz 9y ago
        You can be pedantic all you want but FB Workplace is many of the regular FB platform features repurposed without the advertising. Workplace is not their core product nor is it where the majority of their revenues or engineering efforts are concentrated.
        • bobdole1234 9y ago
          Since they're using it internally to make facebook work, I'd say it's a core product and a lot of engineering efforts are being expended to make the company run better. It just also happens to be something you can sell to others too.
          • JonDav 9y ago
            Since you consider it a core product, what do you estimate the portion of Facebook's revenue comes from this core product in relation to the billions they receive elsewhere.
  • deleted 9y ago
    [deleted]
• themihai 9y ago
  This line becomes blurry ... Google also sells hardware devices, Amazon as well... Microsoft as well ...Advertising is a big market and it looks like that everyone tries to get a chunk of it...even TV manufacturers (with their App stores etc). Now it's quite common to develop a device that runs only some DRM software(i.e. various TV sticks, coffee machines, music players).
  • ocdtrekkie 9y ago
    Google "sells hardware", yes, but Google makes somewhere in the realm of 99% of it's money on advertising. The fact that they technically have other businesses doesn't change who they are. You wouldn't call Google an ISP, yet Google also has both Fiber and Google Fi. Google is an ad company... with hobbies. (Microsoft is almost certainly a "software company" even though they sometimes make hardware, and while Apple does make it's own software, it is indisputably a "hardware company".)
    • darren_ 9y ago
      > but Google makes somewhere in the realm of 99% of it's money on advertising almost 15% of google's revenue in q4 2017 was hardware/cloud/subscriptions. there's possibly a bump in hardware since it's q4, but 'in the realm of 99%' is not close at all. and this is trending upwards. (yes yes, googler here)
      • ocdtrekkie 9y ago
        Thanks for the correction! 84% of statistics are made up on the spot, and I'll admit, I didn't check current numbers before this comment. Mind you, I don't think the percentage significantly changes the value of my point. I do wonder if that statistic will change enough for advertising not to be the core of Google's business though.
• bananarepdev 9y ago
  How is Apple a technology company when their main business is selling consumer electronics?
  • Redoubts 9y ago
    After working for a bespoke semiconductor foundry, I can’t help but be annoyed that “technology” == software.
    • Turing_Machine 9y ago
      It irks me when I see people say things like "life was so much better before all this technology". You mean like agriculture? Writing? Stone tools? :-)
  • r00fus 9y ago
    I disagree that iPhones are simply "consumer electronics ".
  • Turing_Machine 9y ago
    What definition of "technology" are you using?
• anonacct37 9y ago
  I think you make a good point, but actually AWS is where Amazon makes most of their profit. Can they call themselves a technology company? Google and their cloud offerings are a little different. For the most part Google is an advertising company with expensive hobbies but it's always possible they'll figure out how to add another 800lb gorilla to their portfolio.
• nradov 9y ago
  Every company is a technology company now (or soon will be if they want to survive). It's a meaningless label.
• hw 9y ago
  Now don't start calling NVIDIA and Intel tech companies. Aren't they just an 'Electronics retailer' like Best Buy and Fry's ? I mean they make money from selling CPUs and GPUs. If you say they are tech companies, then you'd call Best Buy and Fry's tech companies as well, given they sell technology as their end product. In all seriousness, does it really matter if Facebook is a tech company vs a media company? Their primary focus and energy spent is on tech, so let's just call it what it is. I don't see the glamour in being labelled a tech company.
• closeparen 9y ago
  The more coherent litmus test for "technology company" is the role of R&D within the organization, irrespective of line-of-business. On the clearly non-tech company side are those which purely consume off-the-shelf products. Your neighborhood bodega probably does most of its business through computerized cash register and credit card terminal, but is unambiguously not a technology company. Then there's a vast middle ground where the company engages consultants and maybe a small in-house IT cost center to integrate and operate off-the-shelf products. Some of the more sophisticated players have unique enough requirements that they start to commission their own technology (or at least customizations to their existing SAP, Oracle, etc). This could be done internally or through contractors, but not as a core competency. Emphasis is on meeting requirements as specified by the business and at the lowest cost. Most banks would fit in this category. People who operate the line of business run the company; IT are support staff who occasionally automate the even-lower-status support staff. Then there are companies whose core competency is R&D, whose technology teams proactively develop and augment products on their own initiative, whose leadership views R&D as an investment/competitive advantage/core of the business rather than as a cost of doing business. This tends to reflect in the social status and compensation of engineers. Engineers (and product and design engineering management) run the company; everyone else is support staff for whatever drudgery engineering hasn't automated yet. This is what we say when we mean "technology company." But the only way to be a pure technology company is to license your tech to others to commercialize, and even then, by your logic, that would make you a patent licensing company. Most tech companies have a line of business. It could be advertising, entertainment, retail, transportation, trading... anything under the sun. The difference is how they go about it.
  • austincheney 9y ago
    I will rephrase then. Is Facebook primarily a technology company or a media company?
    • Eridrus 9y ago
      I don't think they're a media company. A media company would have some expertise in selecting and/or producing content. The closest Facebook gets to this is feed ranking, but that has no real resemblance to anything a traditional media company does. I don't think being a company that makes money by advertising makes you a media company. Google Search makes money from advertising, but is even more clearly not a media company.
• etrautmann 9y ago
  This is a diversion from the important point the parent was making
• manigandham 9y ago
  There's no such thing as a "tech" company in the first place. Technology is intangible knowledge, techniques, strategies, and information. Every single company on the planet uses technology as a means to an end, that end describes the actual type of business.