30 ms·

This is how the narrative of Facebook looks to me: Zuckerberg got lucky and then executed brilliantly, transitioned from nerd hacker to CEO amazingly well. He

This is how the narrative of Facebook looks to me: Zuckerberg got lucky and then executed brilliantly, transitioned from nerd hacker to CEO amazingly well. He deserves a lot of credit for that. Since then, Facebook have innovated very little. Zuckerberg recognised this, and bought Instagram and Whatsapp in lieu of building an innovative company. The latter is clearly really difficult to do. Without a stream of new ideas and products (unlike, say, Apple) Facebook double-downed on maximising revenue growth from their core advertising business. This led to all the scandals and disasters they have brought us, including destabilising societies. Inevitably, this led to the core product becoming less attractive, and people were also turned off by the negative press. Zuckerberg's rigid control of the company has led to him being a lightening rod for the backlash against big tech and especially adtech. His media skills are awful, so insisting on control and making himself a figurehead has further damaged the business. Zuckerberg knows the only way out is another home run. He's a super smart and prescient thinker, so he can see VR is a good play. It looks like the timeline for VR won't be short enough to save FB, but even if it were arriving soon enough he must know that FB probably isn't capable of delivering a truly new thing. This then marks the beginning of the end for the company, as it continues to bring in revenue from Instagram and monetises Whatsapp. Its sheer size means decline is going to take decades. I wouldn't be surprised if Zuckerberg leaves in the next few years, before the failure of Meta strategy becomes apparent. What they _should_ have done is debatable, but developing some sense of ethics might have helped. I think they could have focused on building Whatsapp into a payments (etc) app, which would have created an enduring product, and then used the time that bought them to rebuild the company. Microsoft are showing that it can be done, but I wonder if Facebook has the capacity to do great things. Perhaps the lesson from MS is that only a new leader can rescue such a mired company.

dbbk 5y ago
Let's maintain some perspective here. They went from 1.93 billion DAILY active users, to 1.92 billion.
flyinglizard 5y ago
I think the shift to VR is actually FB acknowledging they lost the mobile platform battle and can not depend on Apple and Google for its future, so it must move the game on. VR is a platform in which they have a head start and own top to bottom with Oculus. Essentially Zuckerberg is fast forwarding the future so he’ll have place to sell ads in without a 3rd part like Apple setting the rules. This is also why he goes full VR and not AR which would likely require a phone somewhere on the side.
jl6 5y ago
> … VR is a good play I find your analysis excellent apart from this bit. It’s really far from obvious to me that VR has any future outside a gaming niche.
- antonioevans 5y ago
  The timeline for consumer level glasses with ar + vr will begin shipping 2023. "Apple" level ones 2025. These devices will be as ubiquitious as the smartphone or earbuds.
  - jl6 5y ago
    What are you thinking makes them consumer level? Just cheaper? Because price isn’t the main problem.
    - fastball 5y ago
      Bad take given how well the Oculus Quest 2 is selling. Primary improvements in OQ2 over previous headsets: Higher Quality + Lower Price + More Portable. Very easy for me to believe if you just keep improving in those areas you end up with a device that will be present in every lower-middle-class+ household.
      - wayoutthere 5y ago
        I have a valve index, one of the best VR headsets available. It sits in my closet and I haven’t touched it in over a year. VR is one of those things that’s really fun to use at your friend’s house, but not something you want to use daily.
        ChuckNorris89 5y ago
        Because the Valve index is very expensive and needs to be tethered to an also expresive gaming PC via cumbersome cables plus the need to install the IR lighthouses in your living-room, and require maintenance of drivers and VR compatible SW(I was a PC gamer, I know). All this expense, physical installation work and general friction is a non-starter for most consumers and that's why yours sits on the shelf unused. The Quest(2) is not tethered but has the "gaming PC" built inside of it, no need to bolt lighthouses to your living room walls, and has the frictionless ecosystem polish of the PS/X-box. So it sits charging on my couch, always updating itself and the games in the background, and when I have 10 minutes of boredom during WFH, I can slip it on my head and will instantly resume the last game state I was on, no cables, no PC, no maintaining or curating drivers and SW, none of that stuff. Zero friction. And I can also put it in my backpack and take it to a friend's place instead of having the whole setup bolted to my living room. I also had work colleagues with gaming PCs buy the Index and return it in the 30 day window after getting bored of the nuisance of cables and SW, then buy a Quest 2 and keep it. The Quest absolutely killed the Index for the mainstream VR market and got Valve to move in the same direction.
bryanrasmussen 5y ago
>Facebook have innovated very little. Zuckerberg recognised this, and bought Instagram and Whatsapp in lieu of building an innovative company. The latter is clearly really difficult to do. I can't remember who it was - maybe Stratechery - that theorized that Zuckerberg thanks to his experience running Facebook had a really good intuition for when Social media where going to go far and thus was able to make deals that at first looked wildly overpriced but in the end seemed to be a steal. Perhaps their problem right now is that there hasn't been a social media with the growth potential that has been worth their acquiring. At any rate not sure if I would say just because they failed one time (even with scandals of last few years) that they're really in trouble, that strikes me too much like most financial journalism that says oh no company X had a bad quarter that's it they're toast and then it turns out they come back the next quarter. I say that as someone who does not care for Facebook or any of their acquisitions (although lots in my family like Whatsapp)
- bobthepanda 5y ago
  The problem with accumulating ever more money is that it becomes ever harder to invest properly and try and beat the market.
- petesergeant 5y ago
  > was able to make deals that at first looked wildly overpriced but in the end seemed to be a steal I wonder how much survivorship bias there is here. Presumably they've made some truly dreadful acquisitions too?
  - riffraff 5y ago
    I think Instagram and WhatsApp were the only very expensive ones. They did buy (and kill) a lot more https://www.techwyse.com/blog/infographics/facebook-acquisitions-the-complete-list-infographic/ https://www.techwyse.com/blog/infographics/facebook-acquisit... EDIT: and Oculus, too
- chaircher 5y ago
  I suppose it's like, they're not going to be able to buy TikTok are they?
davedx 5y ago
I agree with most of what you wrote up to this point: > He's a super smart and prescient thinker, so he can see VR is a good play He made a school yearbook on the internet and copied some features from existing social networks like MySpace. Facebook was just in the right place at the right time and executed well. The jury is very much still out on whether "VR is a good play", too. It might turn out to be a gigantic over-marketed gimmick like blockchain has.
- FullyFunctional 5y ago
  Anyone remember that Next Big Thing was supposed to be 3D TVs? I think VR is similarly misguided (ie, will never go mainstream but will have a healthy niche).
  - stingraycharles 5y ago
    VR seems more interactive and way stickier, I don’t think you can necessarily compare it to 3D TVs, in the same way a computer and TV are very different. Having said that, I’m also skeptical of the whole metaverse thing, as we had that stuff a long time ago already (Second Life) and it was a flop. VR needs to become extremely ubiquitous and hassle-free for such a thing to work.
    - pratnala 5y ago
      Idk if it is just me but I find VR headsets just tiring after a point.
      - tentacleuno 5y ago
        Quite a few people do here. I doubt I could wear them for extended periods either. I personally have to take a break after wearing headphones for a few hours, I couldn't imagine wearing a VR headset of all things.
    - tentacleuno 5y ago
      > as we had that stuff a long time ago already (Second Life) and it was a flop A flop? I remember watching a documentary a while back saying some people were totally addicted to it. I'm not sure if they're still afloat these days, though. Might go the way of Playstation Home (which I genuinely liked!).
PaulRobinson 5y ago
I don't think it's going to die as quickly as you think - it's a pretty sticky product. The network effects that made it attractive might kill it pretty fast when they evaporate, but it's going to be a major player in adtech for at least a decade, which might just give it time to be "saved" by some of the plays they're now pivoting towards. On the ethics thing: they introduced some mechanisms around this, but the appointment of Nick Clegg to drive this as head of "Global Affairs" was always an eyebrow-raiser for those even slightly politically aware in the UK, and predictably less effective than FB management needed him to be (note: I voted Lib Dem in 2010 because I believed in his leadership - it's what he did next that showed the warning signs). I think another quarter of decline and we might see a major shake-up, and I wouldn't be amazed to see Whatsapp getting payment (including crypto) functionality as a bit of Hail Mary to build another social network moat.
- deleted 5y ago
  [deleted]
- whiplash451 5y ago
  Are we reading the same comment? @randomsearch said it would take decades for the company to decline.
  - optimalsolver 5y ago
    Right, but PaulRobinson is thinking in geological time.
- pratnala 5y ago
  WhatsApp already does payments in India (and few other countries?) [1] [1]: https://www.whatsapp.com/payments/ https://www.whatsapp.com/payments/
  - throwaway473825 5y ago
    This is what I see when I click on your link: > The payments feature on App is not available in this country.
avhception 5y ago
If there only was a way to monetize users without getting into ever-shadier ad-tech and dark patterns... I was really sad the day that WhatsApp stopped charging money.
- lifeisstillgood 5y ago
  But a billion people got massively upgraded end to end encrypted communications. It's not clear what, if any, benefit that has had. But it's going to be something
gman83 5y ago
The acquisition strategy could have worked going forwards, seeing as there's not much anti-trust will in the U.S. against M&A, but the problem is that they missed the chance to buy musical.ly (bought for $1 billion by ByteDance in 2017) which became TikTok. If they had made this acquisition they would be in a very different position. Looking at my teenage kids and their friends, they barely use Instagram (let alone Facebook), it's all about TikTok.
- petesergeant 5y ago
  > Looking at my teenage kids and their friends I wonder how important this demographic really is. I understand there's an argument for kids being the future, and so on, but almost everyone I know with disposible income is on Instagram and Facebook, via the apps, and seeing ads. As teenage kids stop being teenage kids, they're going to start caring about sharing baby photos and travel photos and cyber-bullying their mayor and stuff, for which the only games in town are Instagram and FB. In short, I don't think it matters if teenagers are ignoring the platforms as long as they age into them, which I think they might well, especially considering kids don't actually have much money to spend.
  - napolux 5y ago
    > they're going to start caring about sharing baby photos and travel photos and cyber-bullying their mayor and stuff, for which the only games in town are Instagram and FB You're assuming that TikTok won't evolve in a span of 10 years.
  - blitzar 5y ago
    > considering kids don't actually have much money to spend This does presume that the metric is money and not eyeballs; from where I sit tech in general cares little about revenue and a lot about "daily active users". Despite that, if you can brainwash 0-15 year olds into the belief that your brand is great, the future goodwill may offer significant rewards as you evolve with your users.
    - BoxOfRain 5y ago
konschubert 5y ago
I think all centralised social networks have a shelf life. The question has always been if META manages to create/buy the next big centralised social network after facebook. And this has always been a long shot.
TulliusCicero 5y ago
> It looks like the timeline for VR won't be short enough to save FB, but even if it were arriving soon enough he must know that FB probably isn't capable of delivering a truly new thing. I think it is...eventually. But the technology to go from where we're at -- where it's mostly just useful for games -- to a true game-changer in the big picture, it's just not there yet. Gonna be several years at the bare minimum, probably, a lot of problems still need to be solved.
- criddell 5y ago
  The first VR system I tried was in 1992 (Dactyl Nightmare!). After trying it, I basically came to the same conclusion. Maybe in another 30 years it will finally be compelling.
websap 5y ago
You lost me at Zukerburg got lucky. Facebook changed social media forever, they completely innovated this domain.
- karmasimida 5y ago
  but TikTok comes and basically wins the war because it is as un-facebook as it can be. It can be enjoyed, or better if you follow nobody. Whatever FB's innovation is, it doesn't age well, otherwise fades so fast
  - websap 5y ago
    Bro, you wanna send a bunch of emails to keep up with your friends. Facebook is and was the truly first social media for the masses. I hate Facebook, but I will buy its stock, and I will make money.
    - joshuaissac 5y ago
      > Bro, you wanna send a bunch of emails to keep up with your friends. Facebook is and was the truly first social media for the masses. Facebook was not the first. There were already mass-market social networking websites when Facebook emerged, like MySpace and Friendster. The younger generation has already dropped Facebook, like their predecessors dropped MySpace. And they are still able to communicate with each other without using e-mail.
  - Cymrukicks 5y ago
    Thats just the internet in general isn't it? Show me any site or platform that has stayed the same and hasn't innovated in 10 Years?
    - karmasimida 5y ago
      Google....? I don't recall much have changed since ... 2012, except perceived quality of search results
whiplash451 5y ago
Brilliant analysis. I would add to the list that a much higher level of scrutiny from M&A regulators is going to be the last nail in the coffin (making new massive acquisition a lot harder).
rvba 5y ago
> Without a stream of new ideas and products (unlike, say, Apple) Apple has no new products in a long time, just overpriced toys that are sold due to good marketing. Most of their money comes from market positioning and closed eco system. Thry were innovative in the past (that first iphone reveal), but for last years they basically are an app store that takes a 30% cut.
- thinkharderdev 5y ago
  Well I am writing this on a new M1 MacBook Pro which is the best laptop computer I have ever owned. And that is because Apple developed their own chips that are an amazing leap forward in power efficiency, so I can have a laptop which I do heavy, CPU intensive work on all day without worrying about the battery.
  - cma 5y ago
    Moreso that Apple bought exclusivity of TSMC/ASML's process about a year past everyone else. Similar to their microdrive exclusivity they bought for ipod.
  - rvba 5y ago
    Do computer games work on this? (Emulation?) Does it have MS office with macros, or still only a limited version?
    - thinkharderdev 5y ago
      No idea, haven't tried either. In general anything you have to run under Rosetta seems pretty slow.
Griffinsauce 5y ago
> What they _should_ have done is debatable, but developing some sense of ethics might have helped. I don't see how you could do that. Even recognizing a blind spot like that is extremely difficult and then changing that company DNA is near impossible, it might be even harder than pushing for more innovation. Both are the same problem though: changing culture. That is only possible with a drastic change at the top, which didn't happen. Zuck would have had to have a personal epiphany for that to happen because he's un-fireable.
netcan 5y ago
Microsoft, for all its flaws, has strengths. They're grittier than most and ultimately, know how to deliver software products and build businesses around them... very different products and very different businesses. Leadership was a lever to these, but there was something to lever FB have never built a successful product besides Zuck's original. They have never created a good business besides the FB and program. They pushed both to the max. FB pushed the walled garden hard. They pushed hard on acquiring the competition. They pushed hard on making the product "addictive" and optimising it on a "what FB wants from users" basis. In its ad business FB pushed hard on leveraging data. Google's AdWords was always based on user intent. Someone searches for "divorce lawyer," and AdWords finds them a divorce lawyer. FB ads are premised on targeting, not intent. So... leverage data to create a segment with >n chance of wanting a divorce lawyer. It worked. That's FB in a nutshell. They push hard on simple things. What they need is something else to push on. I agree on making WhatsApp a payments app. IMO, retail finance would suit FB perfectly. They'd be better at it than Apple or Google. Look at retail banks, like Citi. It's all about pushing for revenue. Some newly invented fee that most customers don't know they're paying. Some new way of charging both sides of a transaction. More of something. Generating revenue from customer data, float, 3rd party deals... taking advantage of moat. FB would be really good at that. Controlling the VR metaverse... I just don't see it. Too much innovation. Too much invention. Too many elements to balance. Too avante garde. It's not Zuck.
- busymom0 5y ago
  I think Microsoft is also almost an essential product company. You can either get a PC or a Mac. Or Linux but even that requires getting a PC anyway. Chromebook market is still tiny.
  - AussieWog93 5y ago
    Apparently Chromebooks outsold Macbooks in 2020, and their market share only seems to be increasing: https://www.geekwire.com/2021/chromebooks-outsold-macs-worldwide-2020-cutting-windows-market-share/ https://www.geekwire.com/2021/chromebooks-outsold-macs-world... (That said, ChromeOS still makes up a much smaller percentage of active installations, as Google don't have the legacy hardware base that Apple and Microsoft do)
zigman1 5y ago
> What they _should_ have done is debatable, but developing some sense of ethics might have helped. Right? Imagine what could've been if they would acknowledge problems they've caused and co-operate with society to help overcome them. Such a radical idea. Instead, in the hands of capitalism, they were focused on the short-term giant profits that everyone knows won't last forever. It'll be joyful to watch it collapse. I think they were to proud of themselves to admit what they've created - a 21st century phonebook and that's it.
BerislavLopac 5y ago
> he can see VR is a good play It's a good play only if he finds a way to monetise it on a similar scale he does with the social network. I might have my open-mindedness failing me, but I simply can't see a way how VR can be monetised even close to selling the access to and influence over masses on a global scale.
yason 5y ago
Since then, Facebook have innovated very little. I hope they hadn't even tried. Initially, Facebook offered lots of value in the early years in the form that users were actually able to follow their friends' lives and stay connected. You had a bunch of friends and you would see a mostly chronological list of what they had posted that you read until you recognized something you had already seen. If they had kept it that simple Facebook might actually be something I'd be willing to pay for. The newsfeed is absolutely the core of the product and they started ruining it about ten years ago, and very steadily at that.
- Falkon1313 5y ago
  I agree. Adding Messenger, groups, and events were good moves, but they ruined the feed so badly it soured the whole thing. Should've stuck to being social networking instead of trying to be whatever the feed is supposed to be now. They could've easily expanded into more social features, longer-form stuff like Livejournal, personal creative stuff like Deviantart, and personal creative/selling like Etsy and Bandcamp and print-on-demand books, etc. Another killer feature they flopped on was personas. Nobody really wants their entire extended family, current former and potential coworkers and bosses, customers, preacher, old friends, romantic interests, drug dealer, and fetish group all hanging out together in the same room talking. So people made separate accounts and different names but Facebook continually fought hard against that very basic nature of human social networking. Instead of any social-networking improvements to their core, they just removed all the value from the feed. And then bought out another messenger and another place to post photos, both of which they already had. Then a halfhearted videos thing and now a VR Second Life clone.
  - wombat-man 5y ago
    I'm pretty much in it for the baby pictures and vacation photos at this point, but those are starting to thin out as my friends and loose connections are moving on from the platform.
    - deleted 5y ago
      [deleted]
jamesdoe41 5y ago
What does the future of Apple and Google look like decades from now? If you believe that AR/VR will eventually be a trillion-dollar market then even a second or third place position for Facebook will bring them billions in revenue, they just need to be in the market when that time comes and they already are with Oculus.
busymom0 5y ago
> I think they could have focused on building Whatsapp into a payments (etc) app Yep, I am surprised they didn't do this many years ago. WeChat does this pretty significantly in China.
mkolodny 5y ago
Facebook Marketplace is pretty awesome. I see it as a potential Amazon competitor.
- tjpnz 5y ago
  Facebook Marketplace rife with stolen goods and scams.
- ImprovedSilence 5y ago
  Is it really more than a Craigslist copy? I mean, I guess it succeeds in replacing Craigslist, but there’s no way it’s gunning for Amazon.
amelius 5y ago
Why didn't Facebook build a phone? We all know that to control eyeballs, you need to control the device.
- Biganon 5y ago
  They did, in GTA V
signal11 5y ago
Ironically, Facebook was great back when MySpace and Orkut wasn’t a great experience. I suspect that’s because it wouldn’t just let anybody in. Looking back, the decision to open Facebook up to everyone was (in my book) a bad one. I’ll use the nightclub analogy — a good social network, like a good nightclub, must have bouncers (of sorts) to ensure a quality experience. I realise the conflict between this and Metcalfe’s “law”. Also, seriously, why not just charge for Facebook and WhatsApp. WhatsApp usage is at levels now when a lot of people will pay for it — and at one point (pre-Facebook) they weren’t free in first-world markets.
- Breza 5y ago
  I remember being disappointed when they dropped the college requirement. But I do think that was the right decision. You'll only ever scale so much by only enrolling .edu users.
  - sumtechguy 5y ago
    The people who invited me into facebook do not have a degree. I have not posted anything in probably 5 years. From the activity feed spam FB sends me it looks like they both post quite a decent amount. I have have not logged in, in probably a year. When I got on there it was sort of fun reconnecting with people I had not seen in years. But after a while I remembered why we had drifted apart...
- godshatter 5y ago
  I don't think they would do well if they switched to a pay-only system, but they might offer special features as subscriber-only or put limits on certain things in the free tier. If they offered no or limited ads and a simple chronological feed from friends in their paid tier, they might do well. Sort of the "get everyone in the world addicted to your crappy product and then make them pay to get a reasonable version of it" model.
gchokov 5y ago
Brilliant and well put comment, thank you.
mschuster91 5y ago
> Microsoft are showing that it can be done, but I wonder if Facebook has the capacity to do great things. Perhaps the lesson from MS is that only a new leader can rescue such a mired company. No, the lesson from MS (and IBM, Oracle and SAP) is that once you have a large enough moat of captive users who can't really move away, you can just "go on" and deliver crap to your users as long as the quality of the competition stays below the quality of your crap. And if there is someone coming close, buy them up. The problem of FB is that there is, at the core, nothing except the "network effect" that creates such a moat. No multi-year contracts with governments or megacorps worth billions of dollars, no source of recurring revenue other than ads, there is nothing that fundamentally ties customers - both "end users" and advertisers - to Facebook.
ChrisRR 5y ago
It's not even just about the lack of innovation, the demographic of facebook has changed and I can't blame people for wanting to leave It used to be for young uni students and posting photos of your night out, nowadays it's for retirees arguing about politics.
aloer 5y ago
I’ve always thought one possible next step for Facebook would be in the cloud business. Among the big tech companies they are the only ones not reselling their platform expertise but perhaps it’s just not worth it
- touristtam 5y ago
  I think their image as a social media company might have prevented them from doing was Amazon has done.
Axien 5y ago
A lot of companies acquire to expand. What has Cisco invented since the router in the early 90’s? Their entire product line can be traced to an acquisition. Not every company needs to be Apple to succeed.
anonu 5y ago
FB buys TWTR, only short-term distraction tactic I can think of right now. I jest... I dont think that would be a good idea for many reasons. But FB seems it will only innovate through acquisitions - and now would be the time.
neya 5y ago
From a technical (software) perspective, what you say aligns as well - I would claim that Facebook has done very little in terms of actual innovation of their core product since their popularity in early 2010s. I want you to think of a snapshot of facebook.com in 2010 where there wasn't much interactivity on the site and everything relied on good 'old hyperlinks and compare it with its present state - where everything is a clusterfuck of react components with unpredictable behaviour. What I mean by that is - random disappearing newsfeed elements, and random exposé of page admins' personal accounts while commenting on something, bizarre disappearance of comments, loading signs everywhere and for everything and what not. Sure, one can argue their investment into ReactJS could be considered as innovation. But, look at the business side of things - What value has ReactJS ACTUALLY provided to the site NOW compared to what it was in 2010? Not much. In 2010, Facebook was this minimalist website where you could add people and post stuff on each others' walls and yeah, occasionally message them. Today, it is a beast that is tons of megabytes downloaded to your computer on the first page visit with a "Messenger platform" - which is just rebranded basic messaging functionality and the clusterfuck that is "Facebook business suite" which is an unnecessarily complicated garbage UI for basic page admin functionality and their "Ads Platform" whose feature set various with where and how you use it. Not to forget Facebook's screwing up of m.facebook.com (the mobile site) where it is barely usable now and with half the features not working (eg. links in stories). Oh, and did I mention about Facebook Lite, Facebook App, Pages App, etc etc. and none of them look like a complete, polished product. Facebook is a classic case of a taking a good product and screwing it up with needless complexity to the point where the core product is unusable. All this Meta push is just a nail in the coffin for users like me who have had enough - whose expectation wasn't much - just to stay in touch with friends and family. Sometimes, innovation could be as simple as maintaining a stable, core value proposition. I am noticing a lot of people around me are switching back (anecdotal observation) to plain old websites and blogs to express their thoughts and I love that. I for one, can't wait for the downfall of Facebook, so we can go back to less bloated non-react-vue-js powered SPAs and just back to bare hyperlink powered static webpages :)
Razengan 5y ago
> Zuckerberg got lucky and then executed brilliantly, transitioned from nerd hacker to CEO amazingly well. He deserves a lot of credit for that. “I have over 4,000 emails, pictures, addresses, SNS. People just submitted it. I don't know why.!They ‘trust me’. Dumb fucks.” - Mark Zuckerberg at 19 years old. No, he always had scummy intentions and does not deserve credit for exploiting people’s trust.
SergeAx 5y ago
I am an owner of Oculus Quest 2, had some VR hands-on experience before and I think that Quest 2 is a solid product worth every cent (but probably heavily sponsored). It is a best of two worlds: I can use it standalone and I can connect it to my PC and play Steam VR titles. Meta has interesting products for VR work: virtual desktop, meetings/calls with presentation slides. They are one step from decent AR: their passthrough mode is quite good. They have enough cash to buy any decent VR product and a team behind it, if they see a potential synergy. So I think Zuck's bet on VR may in the end play out. A hype around everything "metaverse" is unprecedented right now. Disclaimer: I have a long stake in $META in my portfolio.
- wombat-man 5y ago
  Definitely interested in the virtual desktop thing, but everything else feels pretty meh. I do like a VR game from time to time but I really don't think I want to be doing VR meetings and stuff.
kilroy123 5y ago
I mostly agree, but I'm not convinced they're going to fail at the VR thing. When my mom (she's a grandma) got a headset and loved it. It made me think twice about it being irrelevant.
UncleMeat 5y ago
I don't think this is unreasonable, but I'd also watch out for the "Facebook is dying" narrative that has been popular amongst certain communities for years and years now. Revenue was still up. Profit was still billions and billions. Yes, things are going the wrong way for the first time but it has always felt like people were very fast to jump on the "well this is finally the end" narrative.
shmoopi 5y ago
Zuckerberg was never capable of coming up with products. Facebook is arguably not even his idea. He bought the competition when he couldn't innovate. But the competition got smart and they're not selling anymore. They can smell the blood in the water. I'm just surprised it's taken this long for it to start affecting hard numbers.
polote 5y ago
> Since then, Facebook have innovated very little. Facebook has created Facebook Workplace from scratch which is very successfull, is this not innovating ? Facebook has resisted the growth of Snapchat, is this not innovating ? WhatsApp has continued to grow after its acquisition and is very successful today. Facebook is clearly one of the most innovative company of this size. Buying companies and being able to make them grow is clear proof that Facebook is innovative. In the real world most acquisitions end up failing
- electrondood 5y ago
  Facebook Workplace "from scratch?" It was basically a fork of Facebook.
tinyhouse 5y ago
He did innovate and more importantly, executed well. Facebook groups, marketplace, buying Oculus, all great plays. They have something like 1.9B daily users. At this point there isn't much growth left and user decline is expected. Facebook don't need to be rescued. Still very healthy. Now regarding VR. I'm really happy he is going all in on it. He might fail but it's a bold move. Too early to tell but I'm not betting against him.
martin_drapeau 5y ago
FB is an ad business. Changing their DNA to something else is very hard to do. I had hope that Libra (now Diem) would bring them into personal finance. There are hard problems to solve and the industry is ripe for disruption. Every FB user could have a FB wallet. Remittance, Marketplace, loans, etc.. So many things possible across the entire globe. Not just in the West. They could eat PayPal's lunch. Instead, Zuck turned his focus to the Metaverse. I really don't get it.
Aqueous 5y ago
I think the correct thing to do would have been to pivot away from user data and ad targeting as business model and start offering premium, paid services. For instance Facebook could have very easily been Slack for businesses, as well as an enterprise internal social network. Another thing would have been to start offering appliances for private hosting of individual Facebook instances. Finally Facebook could have also started competing in cloud and leveraging its massive infrastructure for other companies to use. I might be wrong but it seems like these could have replaced Facebook’s current revenue model with stable, reliable recurring revenue while also resolving its longstanding PR problems.
- _fat_santa 5y ago
  > For instance Facebook could have very easily been Slack for businesses, as well as an enterprise internal social network They actually have that already. Now it's called "workplace"[1] but before it was called "facebook for work", think Yammer from MS. [1]: https://www.workplace.com/ https://www.workplace.com/
  - Aqueous 5y ago
    Ah interesting - I vaguely remember hearing about this, but since I hadn't heard about it in so long I assumed it died. I don't know what the uptake on this product is, but this specific product might be a case of "Solving a problem no business is having." For instance I think it'd be hard to justify purchasing this service for an enterprise without a compelling use-case. But I certainly think that Facebook has the resources make something that solves a problem that people really do have. On the other hand, Slack seems to solve a problem pretty well that most businesses have. Finally, I don't think VR as it currently exists solves a problem any business (or person) truly has beyond sheer entertainment. It remains "cool tech" that has yet to find a solid, non-gaming use case for the average person. This may change but this is why I currently think Meta is in trouble and I'm puzzled as to why Zuckerberg would go all-in on VR.
gotstad 5y ago
The historical analogy in Microsoft is more correct than one might think. For Microsoft, it was a question of relinquishing control (e.g. going from proprietary to open) that helped them grow so much again. They are in many ways, a wholly different company than 20 years ago. If Facebook could have embraced the mainstream interest in privacy and converted themselves to become a global digital identity provider, they could have become so much more and be on ethical side of history. Now they are almost pursuing both, while not realizing that they have to let go of one (and incur short-term losses) to pursue other.
majani 5y ago
If you followed the Winkelvoss trial, it's clear that even Facebook itself was a stolen idea, so Facebook have never innovated anything, ever
dionidium 5y ago
> Zuckerberg got lucky and then executed brilliantly, transitioned from nerd hacker to CEO amazingly well. He deserves a lot of credit for that. I used to work for an extremely unfashionable website that nevertheless was one of the most visited on the web (even though you'd probably be surprised by that if you knew the site) and my experience there was that leadership tried to replicate that success with dozens of other products and never once was able to do it. So much of what made the original site successful was timing and luck.
- papito 5y ago
  Look at all the massive tech companies that took root in 2000s. Most are tied to privileged kids who won the birth lottery, had access to computers, and the financial cushion to "try shit". Google, Facebook, PayPal, and earlier - Microsoft. Convincing my parents to buy a computer so I could program was a struggle. We were on public assistance. I am not saying that it's all like winning a lottery - you still have to take advantage of the opportunity, but they were born in Earth's orbit when trying to launch to the Moon, while most of us had to overcome gravity first. Luck is not everything, but it IS a factor.
MichaelRazum 5y ago
"Zuckerberg got lucky", that could be said about nearly every start-up. I don't like him (based on his public behavior), but have to admit he was already brilliant before facebook. You are kind of right about innovation force at facebook. Although, really not sure, why they didn't do more of it. Like getting into cloud similar to google. Especially pytorch kind of feels better then tensorflow. Really strange. On the other hand google innovated like hell, but in the end it's still google search which makes most of the profits. So maybe there is just not much potential in innovating and holding it's position is more important (which they are doing).
pantalaimon 5y ago
What baffles me is how they pretty much destroyed the social network aspect of it. 10 years ago Facebook was the place to know what’s going on in your social circle. You’d find out about events or share experiences, setting relationship status was something of significance. Then the feed became more and more laden with sponsored posts or posts by meme pages. Sharing something personal in this kind of environment suddenly felt awkward. These days it’s rare to see posts by actual people you know - so why bother?
- kevstev 5y ago
  I feel the exact same way. After my last vacation, I actually felt a little awkward posting pictures of it after- for many years FB had served as a great online photo album, but this was around the election, and it was all hatebook type stuff and posts from news outlets and such, it felt out of place to post pictures from my life on there. It was a very strange feeling, and I think a big harbinger of where they have gone wrong as a company. As less people post about whats going on in their lives, I find less value on the site, and the cycle seems self perpetuating at this point. I am not sure how they turn this around... and I say this as someone who was once something of a fanboy and has held their stock since the IPO. If I was in Zuck's shoes, I would kill all political content on the site... immediately and banish it to never come back. Really all outside content needs to go, I don't want news of any sort from FB aside from the "original content" my friends produce. And if you want, inject a reasonable number of ads in between, and I can deal with that, but their "product" in my eyes is their social feed, and that is a fraction of the size it once was.
- bambataa 5y ago
  Facebook killed the value of their own application for me. It’s strange that they didn’t spot this happening. They do now, at least!
jsnodlin 5y ago
I don’t think got lucky and executed brilliantly to hand in hand very often. That’s already a huge win.

dbbk 5y ago

Let's maintain some perspective here. They went from 1.93 billion DAILY active users, to 1.92 billion.

flyinglizard 5y ago

I think the shift to VR is actually FB acknowledging they lost the mobile platform battle and can not depend on Apple and Google for its future, so it must move the game on. VR is a platform in which they have a head start and own top to bottom with Oculus. Essentially Zuckerberg is fast forwarding the future so he’ll have place to sell ads in without a 3rd part like Apple setting the rules. This is also why he goes full VR and not AR which would likely require a phone somewhere on the side.

jl6 5y ago

> … VR is a good play I find your analysis excellent apart from this bit. It’s really far from obvious to me that VR has any future outside a gaming niche.

antonioevans 5y ago
The timeline for consumer level glasses with ar + vr will begin shipping 2023. "Apple" level ones 2025. These devices will be as ubiquitious as the smartphone or earbuds.
- jl6 5y ago
  What are you thinking makes them consumer level? Just cheaper? Because price isn’t the main problem.
  - fastball 5y ago
    Bad take given how well the Oculus Quest 2 is selling. Primary improvements in OQ2 over previous headsets: Higher Quality + Lower Price + More Portable. Very easy for me to believe if you just keep improving in those areas you end up with a device that will be present in every lower-middle-class+ household.
    - wayoutthere 5y ago
      I have a valve index, one of the best VR headsets available. It sits in my closet and I haven’t touched it in over a year. VR is one of those things that’s really fun to use at your friend’s house, but not something you want to use daily.
      - ChuckNorris89 5y ago
        Because the Valve index is very expensive and needs to be tethered to an also expresive gaming PC via cumbersome cables plus the need to install the IR lighthouses in your living-room, and require maintenance of drivers and VR compatible SW(I was a PC gamer, I know). All this expense, physical installation work and general friction is a non-starter for most consumers and that's why yours sits on the shelf unused. The Quest(2) is not tethered but has the "gaming PC" built inside of it, no need to bolt lighthouses to your living room walls, and has the frictionless ecosystem polish of the PS/X-box. So it sits charging on my couch, always updating itself and the games in the background, and when I have 10 minutes of boredom during WFH, I can slip it on my head and will instantly resume the last game state I was on, no cables, no PC, no maintaining or curating drivers and SW, none of that stuff. Zero friction. And I can also put it in my backpack and take it to a friend's place instead of having the whole setup bolted to my living room. I also had work colleagues with gaming PCs buy the Index and return it in the 30 day window after getting bored of the nuisance of cables and SW, then buy a Quest 2 and keep it. The Quest absolutely killed the Index for the mainstream VR market and got Valve to move in the same direction.

bryanrasmussen 5y ago

>Facebook have innovated very little. Zuckerberg recognised this, and bought Instagram and Whatsapp in lieu of building an innovative company. The latter is clearly really difficult to do. I can't remember who it was - maybe Stratechery - that theorized that Zuckerberg thanks to his experience running Facebook had a really good intuition for when Social media where going to go far and thus was able to make deals that at first looked wildly overpriced but in the end seemed to be a steal. Perhaps their problem right now is that there hasn't been a social media with the growth potential that has been worth their acquiring. At any rate not sure if I would say just because they failed one time (even with scandals of last few years) that they're really in trouble, that strikes me too much like most financial journalism that says oh no company X had a bad quarter that's it they're toast and then it turns out they come back the next quarter. I say that as someone who does not care for Facebook or any of their acquisitions (although lots in my family like Whatsapp)

bobthepanda 5y ago
The problem with accumulating ever more money is that it becomes ever harder to invest properly and try and beat the market.
petesergeant 5y ago
> was able to make deals that at first looked wildly overpriced but in the end seemed to be a steal I wonder how much survivorship bias there is here. Presumably they've made some truly dreadful acquisitions too?
- riffraff 5y ago
  I think Instagram and WhatsApp were the only very expensive ones. They did buy (and kill) a lot more https://www.techwyse.com/blog/infographics/facebook-acquisitions-the-complete-list-infographic/ https://www.techwyse.com/blog/infographics/facebook-acquisit... EDIT: and Oculus, too
chaircher 5y ago
I suppose it's like, they're not going to be able to buy TikTok are they?

davedx 5y ago

I agree with most of what you wrote up to this point: > He's a super smart and prescient thinker, so he can see VR is a good play He made a school yearbook on the internet and copied some features from existing social networks like MySpace. Facebook was just in the right place at the right time and executed well. The jury is very much still out on whether "VR is a good play", too. It might turn out to be a gigantic over-marketed gimmick like blockchain has.

FullyFunctional 5y ago
Anyone remember that Next Big Thing was supposed to be 3D TVs? I think VR is similarly misguided (ie, will never go mainstream but will have a healthy niche).
- stingraycharles 5y ago
  VR seems more interactive and way stickier, I don’t think you can necessarily compare it to 3D TVs, in the same way a computer and TV are very different. Having said that, I’m also skeptical of the whole metaverse thing, as we had that stuff a long time ago already (Second Life) and it was a flop. VR needs to become extremely ubiquitous and hassle-free for such a thing to work.
  - pratnala 5y ago
    Idk if it is just me but I find VR headsets just tiring after a point.
    - tentacleuno 5y ago
      Quite a few people do here. I doubt I could wear them for extended periods either. I personally have to take a break after wearing headphones for a few hours, I couldn't imagine wearing a VR headset of all things.
  - tentacleuno 5y ago
    > as we had that stuff a long time ago already (Second Life) and it was a flop A flop? I remember watching a documentary a while back saying some people were totally addicted to it. I'm not sure if they're still afloat these days, though. Might go the way of Playstation Home (which I genuinely liked!).

PaulRobinson 5y ago

I don't think it's going to die as quickly as you think - it's a pretty sticky product. The network effects that made it attractive might kill it pretty fast when they evaporate, but it's going to be a major player in adtech for at least a decade, which might just give it time to be "saved" by some of the plays they're now pivoting towards. On the ethics thing: they introduced some mechanisms around this, but the appointment of Nick Clegg to drive this as head of "Global Affairs" was always an eyebrow-raiser for those even slightly politically aware in the UK, and predictably less effective than FB management needed him to be (note: I voted Lib Dem in 2010 because I believed in his leadership - it's what he did next that showed the warning signs). I think another quarter of decline and we might see a major shake-up, and I wouldn't be amazed to see Whatsapp getting payment (including crypto) functionality as a bit of Hail Mary to build another social network moat.

deleted 5y ago
[deleted]
whiplash451 5y ago
Are we reading the same comment? @randomsearch said it would take decades for the company to decline.
- optimalsolver 5y ago
  Right, but PaulRobinson is thinking in geological time.
pratnala 5y ago
WhatsApp already does payments in India (and few other countries?) [1] [1]: https://www.whatsapp.com/payments/ https://www.whatsapp.com/payments/
- throwaway473825 5y ago
  This is what I see when I click on your link: > The payments feature on App is not available in this country.

avhception 5y ago

If there only was a way to monetize users without getting into ever-shadier ad-tech and dark patterns... I was really sad the day that WhatsApp stopped charging money.

lifeisstillgood 5y ago
But a billion people got massively upgraded end to end encrypted communications. It's not clear what, if any, benefit that has had. But it's going to be something

gman83 5y ago

The acquisition strategy could have worked going forwards, seeing as there's not much anti-trust will in the U.S. against M&A, but the problem is that they missed the chance to buy musical.ly (bought for $1 billion by ByteDance in 2017) which became TikTok. If they had made this acquisition they would be in a very different position. Looking at my teenage kids and their friends, they barely use Instagram (let alone Facebook), it's all about TikTok.

petesergeant 5y ago
> Looking at my teenage kids and their friends I wonder how important this demographic really is. I understand there's an argument for kids being the future, and so on, but almost everyone I know with disposible income is on Instagram and Facebook, via the apps, and seeing ads. As teenage kids stop being teenage kids, they're going to start caring about sharing baby photos and travel photos and cyber-bullying their mayor and stuff, for which the only games in town are Instagram and FB. In short, I don't think it matters if teenagers are ignoring the platforms as long as they age into them, which I think they might well, especially considering kids don't actually have much money to spend.
- napolux 5y ago
  > they're going to start caring about sharing baby photos and travel photos and cyber-bullying their mayor and stuff, for which the only games in town are Instagram and FB You're assuming that TikTok won't evolve in a span of 10 years.
- blitzar 5y ago
  > considering kids don't actually have much money to spend This does presume that the metric is money and not eyeballs; from where I sit tech in general cares little about revenue and a lot about "daily active users". Despite that, if you can brainwash 0-15 year olds into the belief that your brand is great, the future goodwill may offer significant rewards as you evolve with your users.
  - BoxOfRain 5y ago

konschubert 5y ago

I think all centralised social networks have a shelf life. The question has always been if META manages to create/buy the next big centralised social network after facebook. And this has always been a long shot.

TulliusCicero 5y ago

> It looks like the timeline for VR won't be short enough to save FB, but even if it were arriving soon enough he must know that FB probably isn't capable of delivering a truly new thing. I think it is...eventually. But the technology to go from where we're at -- where it's mostly just useful for games -- to a true game-changer in the big picture, it's just not there yet. Gonna be several years at the bare minimum, probably, a lot of problems still need to be solved.

criddell 5y ago
The first VR system I tried was in 1992 (Dactyl Nightmare!). After trying it, I basically came to the same conclusion. Maybe in another 30 years it will finally be compelling.

websap 5y ago

You lost me at Zukerburg got lucky. Facebook changed social media forever, they completely innovated this domain.

karmasimida 5y ago
but TikTok comes and basically wins the war because it is as un-facebook as it can be. It can be enjoyed, or better if you follow nobody. Whatever FB's innovation is, it doesn't age well, otherwise fades so fast
- websap 5y ago
  Bro, you wanna send a bunch of emails to keep up with your friends. Facebook is and was the truly first social media for the masses. I hate Facebook, but I will buy its stock, and I will make money.
  - joshuaissac 5y ago
    > Bro, you wanna send a bunch of emails to keep up with your friends. Facebook is and was the truly first social media for the masses. Facebook was not the first. There were already mass-market social networking websites when Facebook emerged, like MySpace and Friendster. The younger generation has already dropped Facebook, like their predecessors dropped MySpace. And they are still able to communicate with each other without using e-mail.
- Cymrukicks 5y ago
  Thats just the internet in general isn't it? Show me any site or platform that has stayed the same and hasn't innovated in 10 Years?
  - karmasimida 5y ago
    Google....? I don't recall much have changed since ... 2012, except perceived quality of search results

whiplash451 5y ago

Brilliant analysis. I would add to the list that a much higher level of scrutiny from M&A regulators is going to be the last nail in the coffin (making new massive acquisition a lot harder).

rvba 5y ago

> Without a stream of new ideas and products (unlike, say, Apple) Apple has no new products in a long time, just overpriced toys that are sold due to good marketing. Most of their money comes from market positioning and closed eco system. Thry were innovative in the past (that first iphone reveal), but for last years they basically are an app store that takes a 30% cut.

thinkharderdev 5y ago
Well I am writing this on a new M1 MacBook Pro which is the best laptop computer I have ever owned. And that is because Apple developed their own chips that are an amazing leap forward in power efficiency, so I can have a laptop which I do heavy, CPU intensive work on all day without worrying about the battery.
- cma 5y ago
  Moreso that Apple bought exclusivity of TSMC/ASML's process about a year past everyone else. Similar to their microdrive exclusivity they bought for ipod.
- rvba 5y ago
  Do computer games work on this? (Emulation?) Does it have MS office with macros, or still only a limited version?
  - thinkharderdev 5y ago
    No idea, haven't tried either. In general anything you have to run under Rosetta seems pretty slow.

Griffinsauce 5y ago

> What they _should_ have done is debatable, but developing some sense of ethics might have helped. I don't see how you could do that. Even recognizing a blind spot like that is extremely difficult and then changing that company DNA is near impossible, it might be even harder than pushing for more innovation. Both are the same problem though: changing culture. That is only possible with a drastic change at the top, which didn't happen. Zuck would have had to have a personal epiphany for that to happen because he's un-fireable.

netcan 5y ago

Microsoft, for all its flaws, has strengths. They're grittier than most and ultimately, know how to deliver software products and build businesses around them... very different products and very different businesses. Leadership was a lever to these, but there was something to lever FB have never built a successful product besides Zuck's original. They have never created a good business besides the FB and program. They pushed both to the max. FB pushed the walled garden hard. They pushed hard on acquiring the competition. They pushed hard on making the product "addictive" and optimising it on a "what FB wants from users" basis. In its ad business FB pushed hard on leveraging data. Google's AdWords was always based on user intent. Someone searches for "divorce lawyer," and AdWords finds them a divorce lawyer. FB ads are premised on targeting, not intent. So... leverage data to create a segment with >n chance of wanting a divorce lawyer. It worked. That's FB in a nutshell. They push hard on simple things. What they need is something else to push on. I agree on making WhatsApp a payments app. IMO, retail finance would suit FB perfectly. They'd be better at it than Apple or Google. Look at retail banks, like Citi. It's all about pushing for revenue. Some newly invented fee that most customers don't know they're paying. Some new way of charging both sides of a transaction. More of something. Generating revenue from customer data, float, 3rd party deals... taking advantage of moat. FB would be really good at that. Controlling the VR metaverse... I just don't see it. Too much innovation. Too much invention. Too many elements to balance. Too avante garde. It's not Zuck.

busymom0 5y ago
I think Microsoft is also almost an essential product company. You can either get a PC or a Mac. Or Linux but even that requires getting a PC anyway. Chromebook market is still tiny.
- AussieWog93 5y ago
  Apparently Chromebooks outsold Macbooks in 2020, and their market share only seems to be increasing: https://www.geekwire.com/2021/chromebooks-outsold-macs-worldwide-2020-cutting-windows-market-share/ https://www.geekwire.com/2021/chromebooks-outsold-macs-world... (That said, ChromeOS still makes up a much smaller percentage of active installations, as Google don't have the legacy hardware base that Apple and Microsoft do)

zigman1 5y ago

> What they _should_ have done is debatable, but developing some sense of ethics might have helped. Right? Imagine what could've been if they would acknowledge problems they've caused and co-operate with society to help overcome them. Such a radical idea. Instead, in the hands of capitalism, they were focused on the short-term giant profits that everyone knows won't last forever. It'll be joyful to watch it collapse. I think they were to proud of themselves to admit what they've created - a 21st century phonebook and that's it.

BerislavLopac 5y ago

> he can see VR is a good play It's a good play only if he finds a way to monetise it on a similar scale he does with the social network. I might have my open-mindedness failing me, but I simply can't see a way how VR can be monetised even close to selling the access to and influence over masses on a global scale.

yason 5y ago

Since then, Facebook have innovated very little. I hope they hadn't even tried. Initially, Facebook offered lots of value in the early years in the form that users were actually able to follow their friends' lives and stay connected. You had a bunch of friends and you would see a mostly chronological list of what they had posted that you read until you recognized something you had already seen. If they had kept it that simple Facebook might actually be something I'd be willing to pay for. The newsfeed is absolutely the core of the product and they started ruining it about ten years ago, and very steadily at that.

Falkon1313 5y ago
I agree. Adding Messenger, groups, and events were good moves, but they ruined the feed so badly it soured the whole thing. Should've stuck to being social networking instead of trying to be whatever the feed is supposed to be now. They could've easily expanded into more social features, longer-form stuff like Livejournal, personal creative stuff like Deviantart, and personal creative/selling like Etsy and Bandcamp and print-on-demand books, etc. Another killer feature they flopped on was personas. Nobody really wants their entire extended family, current former and potential coworkers and bosses, customers, preacher, old friends, romantic interests, drug dealer, and fetish group all hanging out together in the same room talking. So people made separate accounts and different names but Facebook continually fought hard against that very basic nature of human social networking. Instead of any social-networking improvements to their core, they just removed all the value from the feed. And then bought out another messenger and another place to post photos, both of which they already had. Then a halfhearted videos thing and now a VR Second Life clone.
- wombat-man 5y ago
  I'm pretty much in it for the baby pictures and vacation photos at this point, but those are starting to thin out as my friends and loose connections are moving on from the platform.
  - deleted 5y ago
    [deleted]

jamesdoe41 5y ago

What does the future of Apple and Google look like decades from now? If you believe that AR/VR will eventually be a trillion-dollar market then even a second or third place position for Facebook will bring them billions in revenue, they just need to be in the market when that time comes and they already are with Oculus.

busymom0 5y ago

> I think they could have focused on building Whatsapp into a payments (etc) app Yep, I am surprised they didn't do this many years ago. WeChat does this pretty significantly in China.

mkolodny 5y ago

Facebook Marketplace is pretty awesome. I see it as a potential Amazon competitor.

tjpnz 5y ago
Facebook Marketplace rife with stolen goods and scams.
ImprovedSilence 5y ago
Is it really more than a Craigslist copy? I mean, I guess it succeeds in replacing Craigslist, but there’s no way it’s gunning for Amazon.

amelius 5y ago

Why didn't Facebook build a phone? We all know that to control eyeballs, you need to control the device.

Biganon 5y ago
They did, in GTA V

signal11 5y ago

Ironically, Facebook was great back when MySpace and Orkut wasn’t a great experience. I suspect that’s because it wouldn’t just let anybody in. Looking back, the decision to open Facebook up to everyone was (in my book) a bad one. I’ll use the nightclub analogy — a good social network, like a good nightclub, must have bouncers (of sorts) to ensure a quality experience. I realise the conflict between this and Metcalfe’s “law”. Also, seriously, why not just charge for Facebook and WhatsApp. WhatsApp usage is at levels now when a lot of people will pay for it — and at one point (pre-Facebook) they weren’t free in first-world markets.

Breza 5y ago
I remember being disappointed when they dropped the college requirement. But I do think that was the right decision. You'll only ever scale so much by only enrolling .edu users.
- sumtechguy 5y ago
  The people who invited me into facebook do not have a degree. I have not posted anything in probably 5 years. From the activity feed spam FB sends me it looks like they both post quite a decent amount. I have have not logged in, in probably a year. When I got on there it was sort of fun reconnecting with people I had not seen in years. But after a while I remembered why we had drifted apart...
godshatter 5y ago
I don't think they would do well if they switched to a pay-only system, but they might offer special features as subscriber-only or put limits on certain things in the free tier. If they offered no or limited ads and a simple chronological feed from friends in their paid tier, they might do well. Sort of the "get everyone in the world addicted to your crappy product and then make them pay to get a reasonable version of it" model.

gchokov 5y ago

Brilliant and well put comment, thank you.

mschuster91 5y ago

> Microsoft are showing that it can be done, but I wonder if Facebook has the capacity to do great things. Perhaps the lesson from MS is that only a new leader can rescue such a mired company. No, the lesson from MS (and IBM, Oracle and SAP) is that once you have a large enough moat of captive users who can't really move away, you can just "go on" and deliver crap to your users as long as the quality of the competition stays below the quality of your crap. And if there is someone coming close, buy them up. The problem of FB is that there is, at the core, nothing except the "network effect" that creates such a moat. No multi-year contracts with governments or megacorps worth billions of dollars, no source of recurring revenue other than ads, there is nothing that fundamentally ties customers - both "end users" and advertisers - to Facebook.

ChrisRR 5y ago

It's not even just about the lack of innovation, the demographic of facebook has changed and I can't blame people for wanting to leave It used to be for young uni students and posting photos of your night out, nowadays it's for retirees arguing about politics.

aloer 5y ago

I’ve always thought one possible next step for Facebook would be in the cloud business. Among the big tech companies they are the only ones not reselling their platform expertise but perhaps it’s just not worth it

touristtam 5y ago
I think their image as a social media company might have prevented them from doing was Amazon has done.

Axien 5y ago

A lot of companies acquire to expand. What has Cisco invented since the router in the early 90’s? Their entire product line can be traced to an acquisition. Not every company needs to be Apple to succeed.

anonu 5y ago

FB buys TWTR, only short-term distraction tactic I can think of right now. I jest... I dont think that would be a good idea for many reasons. But FB seems it will only innovate through acquisitions - and now would be the time.

neya 5y ago

From a technical (software) perspective, what you say aligns as well - I would claim that Facebook has done very little in terms of actual innovation of their core product since their popularity in early 2010s. I want you to think of a snapshot of facebook.com in 2010 where there wasn't much interactivity on the site and everything relied on good 'old hyperlinks and compare it with its present state - where everything is a clusterfuck of react components with unpredictable behaviour. What I mean by that is - random disappearing newsfeed elements, and random exposé of page admins' personal accounts while commenting on something, bizarre disappearance of comments, loading signs everywhere and for everything and what not. Sure, one can argue their investment into ReactJS could be considered as innovation. But, look at the business side of things - What value has ReactJS ACTUALLY provided to the site NOW compared to what it was in 2010? Not much. In 2010, Facebook was this minimalist website where you could add people and post stuff on each others' walls and yeah, occasionally message them. Today, it is a beast that is tons of megabytes downloaded to your computer on the first page visit with a "Messenger platform" - which is just rebranded basic messaging functionality and the clusterfuck that is "Facebook business suite" which is an unnecessarily complicated garbage UI for basic page admin functionality and their "Ads Platform" whose feature set various with where and how you use it. Not to forget Facebook's screwing up of m.facebook.com (the mobile site) where it is barely usable now and with half the features not working (eg. links in stories). Oh, and did I mention about Facebook Lite, Facebook App, Pages App, etc etc. and none of them look like a complete, polished product. Facebook is a classic case of a taking a good product and screwing it up with needless complexity to the point where the core product is unusable. All this Meta push is just a nail in the coffin for users like me who have had enough - whose expectation wasn't much - just to stay in touch with friends and family. Sometimes, innovation could be as simple as maintaining a stable, core value proposition. I am noticing a lot of people around me are switching back (anecdotal observation) to plain old websites and blogs to express their thoughts and I love that. I for one, can't wait for the downfall of Facebook, so we can go back to less bloated non-react-vue-js powered SPAs and just back to bare hyperlink powered static webpages :)

Razengan 5y ago

> Zuckerberg got lucky and then executed brilliantly, transitioned from nerd hacker to CEO amazingly well. He deserves a lot of credit for that. “I have over 4,000 emails, pictures, addresses, SNS. People just submitted it. I don't know why.!They ‘trust me’. Dumb fucks.” - Mark Zuckerberg at 19 years old. No, he always had scummy intentions and does not deserve credit for exploiting people’s trust.

SergeAx 5y ago

I am an owner of Oculus Quest 2, had some VR hands-on experience before and I think that Quest 2 is a solid product worth every cent (but probably heavily sponsored). It is a best of two worlds: I can use it standalone and I can connect it to my PC and play Steam VR titles. Meta has interesting products for VR work: virtual desktop, meetings/calls with presentation slides. They are one step from decent AR: their passthrough mode is quite good. They have enough cash to buy any decent VR product and a team behind it, if they see a potential synergy. So I think Zuck's bet on VR may in the end play out. A hype around everything "metaverse" is unprecedented right now. Disclaimer: I have a long stake in $META in my portfolio.

wombat-man 5y ago
Definitely interested in the virtual desktop thing, but everything else feels pretty meh. I do like a VR game from time to time but I really don't think I want to be doing VR meetings and stuff.

kilroy123 5y ago

I mostly agree, but I'm not convinced they're going to fail at the VR thing. When my mom (she's a grandma) got a headset and loved it. It made me think twice about it being irrelevant.

UncleMeat 5y ago

I don't think this is unreasonable, but I'd also watch out for the "Facebook is dying" narrative that has been popular amongst certain communities for years and years now. Revenue was still up. Profit was still billions and billions. Yes, things are going the wrong way for the first time but it has always felt like people were very fast to jump on the "well this is finally the end" narrative.

shmoopi 5y ago

Zuckerberg was never capable of coming up with products. Facebook is arguably not even his idea. He bought the competition when he couldn't innovate. But the competition got smart and they're not selling anymore. They can smell the blood in the water. I'm just surprised it's taken this long for it to start affecting hard numbers.

polote 5y ago

> Since then, Facebook have innovated very little. Facebook has created Facebook Workplace from scratch which is very successfull, is this not innovating ? Facebook has resisted the growth of Snapchat, is this not innovating ? WhatsApp has continued to grow after its acquisition and is very successful today. Facebook is clearly one of the most innovative company of this size. Buying companies and being able to make them grow is clear proof that Facebook is innovative. In the real world most acquisitions end up failing

electrondood 5y ago
Facebook Workplace "from scratch?" It was basically a fork of Facebook.

tinyhouse 5y ago

He did innovate and more importantly, executed well. Facebook groups, marketplace, buying Oculus, all great plays. They have something like 1.9B daily users. At this point there isn't much growth left and user decline is expected. Facebook don't need to be rescued. Still very healthy. Now regarding VR. I'm really happy he is going all in on it. He might fail but it's a bold move. Too early to tell but I'm not betting against him.

martin_drapeau 5y ago

FB is an ad business. Changing their DNA to something else is very hard to do. I had hope that Libra (now Diem) would bring them into personal finance. There are hard problems to solve and the industry is ripe for disruption. Every FB user could have a FB wallet. Remittance, Marketplace, loans, etc.. So many things possible across the entire globe. Not just in the West. They could eat PayPal's lunch. Instead, Zuck turned his focus to the Metaverse. I really don't get it.

Aqueous 5y ago

I think the correct thing to do would have been to pivot away from user data and ad targeting as business model and start offering premium, paid services. For instance Facebook could have very easily been Slack for businesses, as well as an enterprise internal social network. Another thing would have been to start offering appliances for private hosting of individual Facebook instances. Finally Facebook could have also started competing in cloud and leveraging its massive infrastructure for other companies to use. I might be wrong but it seems like these could have replaced Facebook’s current revenue model with stable, reliable recurring revenue while also resolving its longstanding PR problems.

_fat_santa 5y ago
> For instance Facebook could have very easily been Slack for businesses, as well as an enterprise internal social network They actually have that already. Now it's called "workplace"[1] but before it was called "facebook for work", think Yammer from MS. [1]: https://www.workplace.com/ https://www.workplace.com/
- Aqueous 5y ago
  Ah interesting - I vaguely remember hearing about this, but since I hadn't heard about it in so long I assumed it died. I don't know what the uptake on this product is, but this specific product might be a case of "Solving a problem no business is having." For instance I think it'd be hard to justify purchasing this service for an enterprise without a compelling use-case. But I certainly think that Facebook has the resources make something that solves a problem that people really do have. On the other hand, Slack seems to solve a problem pretty well that most businesses have. Finally, I don't think VR as it currently exists solves a problem any business (or person) truly has beyond sheer entertainment. It remains "cool tech" that has yet to find a solid, non-gaming use case for the average person. This may change but this is why I currently think Meta is in trouble and I'm puzzled as to why Zuckerberg would go all-in on VR.

gotstad 5y ago

The historical analogy in Microsoft is more correct than one might think. For Microsoft, it was a question of relinquishing control (e.g. going from proprietary to open) that helped them grow so much again. They are in many ways, a wholly different company than 20 years ago. If Facebook could have embraced the mainstream interest in privacy and converted themselves to become a global digital identity provider, they could have become so much more and be on ethical side of history. Now they are almost pursuing both, while not realizing that they have to let go of one (and incur short-term losses) to pursue other.

majani 5y ago

If you followed the Winkelvoss trial, it's clear that even Facebook itself was a stolen idea, so Facebook have never innovated anything, ever

dionidium 5y ago

> Zuckerberg got lucky and then executed brilliantly, transitioned from nerd hacker to CEO amazingly well. He deserves a lot of credit for that. I used to work for an extremely unfashionable website that nevertheless was one of the most visited on the web (even though you'd probably be surprised by that if you knew the site) and my experience there was that leadership tried to replicate that success with dozens of other products and never once was able to do it. So much of what made the original site successful was timing and luck.

papito 5y ago
Look at all the massive tech companies that took root in 2000s. Most are tied to privileged kids who won the birth lottery, had access to computers, and the financial cushion to "try shit". Google, Facebook, PayPal, and earlier - Microsoft. Convincing my parents to buy a computer so I could program was a struggle. We were on public assistance. I am not saying that it's all like winning a lottery - you still have to take advantage of the opportunity, but they were born in Earth's orbit when trying to launch to the Moon, while most of us had to overcome gravity first. Luck is not everything, but it IS a factor.

MichaelRazum 5y ago

"Zuckerberg got lucky", that could be said about nearly every start-up. I don't like him (based on his public behavior), but have to admit he was already brilliant before facebook. You are kind of right about innovation force at facebook. Although, really not sure, why they didn't do more of it. Like getting into cloud similar to google. Especially pytorch kind of feels better then tensorflow. Really strange. On the other hand google innovated like hell, but in the end it's still google search which makes most of the profits. So maybe there is just not much potential in innovating and holding it's position is more important (which they are doing).

pantalaimon 5y ago

What baffles me is how they pretty much destroyed the social network aspect of it. 10 years ago Facebook was the place to know what’s going on in your social circle. You’d find out about events or share experiences, setting relationship status was something of significance. Then the feed became more and more laden with sponsored posts or posts by meme pages. Sharing something personal in this kind of environment suddenly felt awkward. These days it’s rare to see posts by actual people you know - so why bother?

kevstev 5y ago
I feel the exact same way. After my last vacation, I actually felt a little awkward posting pictures of it after- for many years FB had served as a great online photo album, but this was around the election, and it was all hatebook type stuff and posts from news outlets and such, it felt out of place to post pictures from my life on there. It was a very strange feeling, and I think a big harbinger of where they have gone wrong as a company. As less people post about whats going on in their lives, I find less value on the site, and the cycle seems self perpetuating at this point. I am not sure how they turn this around... and I say this as someone who was once something of a fanboy and has held their stock since the IPO. If I was in Zuck's shoes, I would kill all political content on the site... immediately and banish it to never come back. Really all outside content needs to go, I don't want news of any sort from FB aside from the "original content" my friends produce. And if you want, inject a reasonable number of ads in between, and I can deal with that, but their "product" in my eyes is their social feed, and that is a fraction of the size it once was.
bambataa 5y ago
Facebook killed the value of their own application for me. It’s strange that they didn’t spot this happening. They do now, at least!

jsnodlin 5y ago

I don’t think got lucky and executed brilliantly to hand in hand very often. That’s already a huge win.