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In all likelyhood this is a “submarine” article crafted by a PR firm like Definers for a hit job on Facebook: https://news.ycombinator.com/item?id=18511963 http

In all likelyhood this is a “submarine” article crafted by a PR firm like Definers for a hit job on Facebook: https://news.ycombinator.com/item?id=18511963 https://news.ycombinator.com/item?id=18511963 There are plenty of short sellers who would benefit from FB’s plummeting stock. In reality, FB’s DAU/MAU are largely unchanged. The stories that young people “deleted Facebook” were downright falsehood. There is simply no viable competition for Facebook in market right now like what Yahoo had in terms of Google.

JumpCrisscross 8y ago
> there are plenty of short sellers who would benefit from FB’s plummeting stock This is a weird meme that’s cropped up in tech circles over the past few years. It’s misleading and incorrect. No short selling fund sells short and then secretly seeds negative PR pieces. If you’re short, your argument is always strengthened by disclosing you put your money behind your words. Short sellers hire private investigators, commission research and occasionally take out ads against companies. They do not put out hit pieces—it is too inefficient and expensive.
- gomox 8y ago
  How can you be sure about this? Disclosing the existence of a short makes people doubt the bias in every piece of information you bring up. Keeping a position secret might be more effective than disclosing. I know when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility.
  - JumpCrisscross 8y ago
    > How can you be sure about this? It’s not a hard and fast rule. Just one enforced by economic interests. > when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility You aren’t the target. Current shareholders are. Short-seller messaging is almost always primarily aimed at current long holders. (Since short sellers depend on long holders as a source for borrowed shares, a relationship which isn’t reciprocated in long holders needing short interest to make their investments work, inducing more shorts isn’t a feasible strategy.) The message shows bias from the position, but as an investor, someone betting on their message is more material than the bias. They decided, after all, to bet on the message before they themselves were biased. (When long holders aren’t the target, regulators are. This was the Herbalife strategy. In those cases, too, a broad PR strategy is too expensive relative to the desired results.)
- sytelus 8y ago
  You are naively wrong. Every single major short seller uses massive media drive to compliment their billion dollar bets. Turn on CNBC and you will see them in opinion panels all the time. They often leverage everything from editorials to articals that are just undercover FUD spreaders in disguised as analysis. There are tons of websites where you can just look at headlines and you know this is coming from big shark who just put a major bet. Remember constant daily stream of articles on how Tesla will fail, it’s unfixable and is running out of money? Do you really think journalists were writing all that up in unison?
Angostura 8y ago
In all likelihood, since this is The Economist - you're wrong.
hrktb 8y ago
> There is simply no viable competition for Facebook in market right now like what Yahoo had in terms of Google. I don’t know if it’s your argument for the decline of facebook being false, but it doesn’t have to come from competition or viable alternatives. People stopping doing something happens all the time, companies going down because of decreasing interest in their service is a normal thing.
- danso 8y ago
  Which companies of Facebook's size and dominance have gone out because people simply stopped using them? The demises of Sears and Toys R Us were huge news, despite the obvious fact that they had long been beaten by competitors.
  - hrktb 8y ago
    For companies the size of facebook, it usually comes with disrupton of the whole industry making incumbants obsolete when people flock to the new behaviors. That’s in part what happened to Kodak / Polaroid, or Blockbuster, ot Blackerry / Nokia. That’s not competition per se as other companies aren’t chalenging the incumbant, it’s the whole landscape that changes.
- metildaa 8y ago
  None of the people my age that I spent this past evening with (barring my own brother) were still using facebook. An account exists for all of us, but when its gone months or years without use, and there is no Facebook app on your phone, I'd say that user is lost.
  - sytelus 8y ago
    Sample of 1 is not statistics. DAU and MAU are statistics.
mmirate 8y ago
Disregarding the fact that this is the Economist who don't usually publish such drivel: You don't have to be a short-seller to hate Facebook.

JumpCrisscross 8y ago

> there are plenty of short sellers who would benefit from FB’s plummeting stock This is a weird meme that’s cropped up in tech circles over the past few years. It’s misleading and incorrect. No short selling fund sells short and then secretly seeds negative PR pieces. If you’re short, your argument is always strengthened by disclosing you put your money behind your words. Short sellers hire private investigators, commission research and occasionally take out ads against companies. They do not put out hit pieces—it is too inefficient and expensive.

gomox 8y ago
How can you be sure about this? Disclosing the existence of a short makes people doubt the bias in every piece of information you bring up. Keeping a position secret might be more effective than disclosing. I know when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility.
- JumpCrisscross 8y ago
  > How can you be sure about this? It’s not a hard and fast rule. Just one enforced by economic interests. > when I watched that Herbalife documentary I assumed the whole thing was paid for by Ackman and therefore of dubious credibility You aren’t the target. Current shareholders are. Short-seller messaging is almost always primarily aimed at current long holders. (Since short sellers depend on long holders as a source for borrowed shares, a relationship which isn’t reciprocated in long holders needing short interest to make their investments work, inducing more shorts isn’t a feasible strategy.) The message shows bias from the position, but as an investor, someone betting on their message is more material than the bias. They decided, after all, to bet on the message before they themselves were biased. (When long holders aren’t the target, regulators are. This was the Herbalife strategy. In those cases, too, a broad PR strategy is too expensive relative to the desired results.)
sytelus 8y ago
You are naively wrong. Every single major short seller uses massive media drive to compliment their billion dollar bets. Turn on CNBC and you will see them in opinion panels all the time. They often leverage everything from editorials to articals that are just undercover FUD spreaders in disguised as analysis. There are tons of websites where you can just look at headlines and you know this is coming from big shark who just put a major bet. Remember constant daily stream of articles on how Tesla will fail, it’s unfixable and is running out of money? Do you really think journalists were writing all that up in unison?

Angostura 8y ago

In all likelihood, since this is The Economist - you're wrong.

hrktb 8y ago

> There is simply no viable competition for Facebook in market right now like what Yahoo had in terms of Google. I don’t know if it’s your argument for the decline of facebook being false, but it doesn’t have to come from competition or viable alternatives. People stopping doing something happens all the time, companies going down because of decreasing interest in their service is a normal thing.

danso 8y ago
Which companies of Facebook's size and dominance have gone out because people simply stopped using them? The demises of Sears and Toys R Us were huge news, despite the obvious fact that they had long been beaten by competitors.
- hrktb 8y ago
  For companies the size of facebook, it usually comes with disrupton of the whole industry making incumbants obsolete when people flock to the new behaviors. That’s in part what happened to Kodak / Polaroid, or Blockbuster, ot Blackerry / Nokia. That’s not competition per se as other companies aren’t chalenging the incumbant, it’s the whole landscape that changes.
metildaa 8y ago
None of the people my age that I spent this past evening with (barring my own brother) were still using facebook. An account exists for all of us, but when its gone months or years without use, and there is no Facebook app on your phone, I'd say that user is lost.
- sytelus 8y ago
  Sample of 1 is not statistics. DAU and MAU are statistics.

mmirate 8y ago

Disregarding the fact that this is the Economist who don't usually publish such drivel: You don't have to be a short-seller to hate Facebook.