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Can Meta cover its operational costs without personalized ads? Re: its ability to exist. Or is the issue that it’s unpalatable to wall st and investors and adve

Can Meta cover its operational costs without personalized ads? Re: its ability to exist. Or is the issue that it’s unpalatable to wall st and investors and advertisers without ad personalization driven growth

whimsicalism 4y ago
Almost certainly not, imo. Unpalatable to Walk St? No, using a service that does not have personalization is unpalatable to the small businesses that pay for Meta's services.
Nextgrid 4y ago
The profiles and text communication, yes absolutely. That has been a solved problem on much less powerful & more expensive hardware than what we have now. Media might be a bit of an issue, but maybe less so if the lack of ad revenue means there is no incentive for publishers to pump out infinite quantities of low-quality media-heavy content.
AdrianB1 4y ago
No idea if they can, but there are better ways to deliver personalized ads without spying on users; for example I am interested in some areas (motorcycles, home improvement/DYI, indie music) and not at all in others (fashion, clothing and perfumes). I am no Meta user at all, but if I would be then I would love to set my ads preferences and get only adds that have value to me and to the companies paying for these ads and get right of the ones I never act on. That brings a lot of value for all parties.
kmeisthax 4y ago
The thing is, if Facebook fails to deliver ad revenue growth, the investors will move to extract value and disinvest from the company, which will kill it. All of the major tech giants were sold to Wall St. as a monopolization play - i.e. you are buying into the company that will own the future. If that turns out to not be the case and Facebook is merely a chat and blogging service, then why not move your money to more lucrative places? Of course, there are some interesting complications to this. Mark Zuckerberg specifically structured Facebook so that he would have majority control over the company. The other shareholders are just along for the ride. He can't make radical changes in the ownership structure without minority shareholder consensus, but that's not that meaningful since Zuckerberg is already running what is effectively a privately-owned company on shareholder money. Compare this to Twitter, which did a 180 on Musk's buyout offer so quickly that Musk spent months trying to fruitlessly wriggle his way out of the deal. They did not have a concentrated ownership structure, so the alternative would have been a slow shutdown or pivot away from microblogging. Instead we get to see a rich playboy destroy the company in real time. The continued viability of the underlying business is probably not in question yet. Advertising existed before tracking, after all; and text and images are cheap to distribute. But there are other headwinds that could absolutely devastate these businesses: - If CDA 230, DMCA 512, or equivalent regulations abroad were to be altered to favor copyright owners and creators over platforms, then that would massively increase moderation costs. Part of the reason why text and images are cheap to distribute at scale is because the platform does not have to account for copyright liability over billions of posts. - Noncopyright censorship[0] laws (i.e. EU TERREG) impose similar costs and risks onto these businesses. - The US might start enforcing their antitrust laws again, and if that does happen then Facebook is particularly vulnerable since their acquisition strategy was buying up all their competition. [0] My personal opinion is that violence is not speech. However, there is enough of a risk of misidentification at scale that I'm fine using the word "censorship" here.

whimsicalism 4y ago

Almost certainly not, imo. Unpalatable to Walk St? No, using a service that does not have personalization is unpalatable to the small businesses that pay for Meta's services.

Nextgrid 4y ago

The profiles and text communication, yes absolutely. That has been a solved problem on much less powerful & more expensive hardware than what we have now. Media might be a bit of an issue, but maybe less so if the lack of ad revenue means there is no incentive for publishers to pump out infinite quantities of low-quality media-heavy content.

AdrianB1 4y ago

No idea if they can, but there are better ways to deliver personalized ads without spying on users; for example I am interested in some areas (motorcycles, home improvement/DYI, indie music) and not at all in others (fashion, clothing and perfumes). I am no Meta user at all, but if I would be then I would love to set my ads preferences and get only adds that have value to me and to the companies paying for these ads and get right of the ones I never act on. That brings a lot of value for all parties.

kmeisthax 4y ago

The thing is, if Facebook fails to deliver ad revenue growth, the investors will move to extract value and disinvest from the company, which will kill it. All of the major tech giants were sold to Wall St. as a monopolization play - i.e. you are buying into the company that will own the future. If that turns out to not be the case and Facebook is merely a chat and blogging service, then why not move your money to more lucrative places? Of course, there are some interesting complications to this. Mark Zuckerberg specifically structured Facebook so that he would have majority control over the company. The other shareholders are just along for the ride. He can't make radical changes in the ownership structure without minority shareholder consensus, but that's not that meaningful since Zuckerberg is already running what is effectively a privately-owned company on shareholder money. Compare this to Twitter, which did a 180 on Musk's buyout offer so quickly that Musk spent months trying to fruitlessly wriggle his way out of the deal. They did not have a concentrated ownership structure, so the alternative would have been a slow shutdown or pivot away from microblogging. Instead we get to see a rich playboy destroy the company in real time. The continued viability of the underlying business is probably not in question yet. Advertising existed before tracking, after all; and text and images are cheap to distribute. But there are other headwinds that could absolutely devastate these businesses: - If CDA 230, DMCA 512, or equivalent regulations abroad were to be altered to favor copyright owners and creators over platforms, then that would massively increase moderation costs. Part of the reason why text and images are cheap to distribute at scale is because the platform does not have to account for copyright liability over billions of posts. - Noncopyright censorship[0] laws (i.e. EU TERREG) impose similar costs and risks onto these businesses. - The US might start enforcing their antitrust laws again, and if that does happen then Facebook is particularly vulnerable since their acquisition strategy was buying up all their competition. [0] My personal opinion is that violence is not speech. However, there is enough of a risk of misidentification at scale that I'm fine using the word "censorship" here.