6 ms·

I was wondering if it would be possible for Facebook to fake their usage numbers. I mean, its valuation is closely tied to the number of users and not so long a

I was wondering if it would be possible for Facebook to fake their usage numbers. I mean, its valuation is closely tied to the number of users and not so long ago everyone thought Facebook was close to saturation, now suddenly they managed to increase the number of users. How can a stockholder know if the numbers they publish are real? It looks to me that it would be possible to increase revenue while the number of users stays flat, so that's not a useful measure.

danso 12y ago
Sorry, but this is a blatant begging of the question: - "not so long ago everyone thought Facebook was close to saturation" - "now suddenly they managed to increase the number of users" Maybe "everyone" was wrong? In any case, faking such numbers on a large scale would require a decent-sized conspiracy among at least a couple of department heads. Also, it would be quite illegal. And, being a digital thing, very easy for someone to prove. However, it's possible that the way they characterize numbers has changed, but those details would presumably be in the official filings and financial reports. For example, in recent years, the newspapers audit circulation bureau has changed readership numbers to include categories of web users, not just print circulation. And even before the web, the numbers included an estimated number of readers who read non-bought copies of a paper (i.e., papers left at the coffee shop and passed around). So there could be different standards of counting...in fact, that's a much easier, more legal way of doing things before you start maliciously faking stats.
- andrenotgiant 12y ago
  Facebook is pretty thorough with its explanations of Daily Active Users (DAU) measurements in its SEC filings: "Daily Active Users (DAUs). We define a daily active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or took an action to share content or activity with his or her Facebook friends or connections via a third-party website or app that is integrated with Facebook, on a given day. We view DAUs, and DAUs as a percentage of MAUs, as measures of user engagement." Going back to the first SEC Filing from July 2012. There is ONE KEY DIFFERENCE in definition of a DAU. Jul 2012 DAU: "...or took an action to share content or activity... ...via a third-party website that is integrated with Facebook." Ref: http://investor.fb.com/secfiling.cfm?filingID=1193125-12-325997&CIK=1326801 http://investor.fb.com/secfiling.cfm?filingID=1193125-12-325... Nov 2013 DAU: "...or took action to share content or activity... ...via a third-party website or app that is integrated with Facebook." Ref: http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&CIK=1326801 http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&...
  - rootedbox 12y ago
    i.e. people are just using instagram more, and this counts as DAU.
    - andrenotgiant 12y ago
      Instagram does not count as DAU - Read the first page of this filing: http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&CIK=1326801 http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&...
      - thesis 12y ago
        But if i click the little FB icon when I post to Instagram, that makes it count as a DAU.
- Spooky23 12y ago
  Not really. It just requires you to look the other way, or not be as effective as needed in your anti-spam campaigns. Wasn't there a story just days ago that reported that a very significant population of Twitter users have never Tweeted? Last year NPR had significant coverage of companies that wrangled and sold armies of fake twitter followers. (That sort of info is much more transparent with Twitter than Facebook) Why is it impossible to believe that any of the thousands of possible entities aren't farming phony Facebook accounts?
- at-fates-hands 12y ago
  >> In any case, faking such numbers on a large scale would require a decent-sized conspiracy among at least a couple of department heads. Actually all you would need is a low level manager, a decent hacker (or employee) with skills and a small bot army to inflate the numbers. Considering there's apparently over 83 million fake or duplicate accounts, faking those numbers would be fairly trivial. http://www.cnn.com/2012/08/02/tech/social-media/facebook-fake-accounts/index.html http://www.cnn.com/2012/08/02/tech/social-media/facebook-fak...
hagbardgroup 12y ago
I don't think we know. They should be audited. Eventually, when the general ad fraud scandal [1][2] starts to really harm a lot of companies, there will be pressure to audit usage metrics more stringently. Supposedly though FB has held itself (and FBX, which is overall a great product, in particular) as 'fraud-free.'[3] Dunno about that, especially since faking likes is trivial. Anyone who knows how to operate a search engine can do it in less than five minutes. [1]http://blogs.wsj.com/cmo/2014/03/23/online-advertisings-crisis/ http://blogs.wsj.com/cmo/2014/03/23/online-advertisings-cris... [2]http://searchenginewatch.com/article/2329878/Facebook-Ad-Fraud-How-Can-Advertisers-Combat-Paid-Likes http://searchenginewatch.com/article/2329878/Facebook-Ad-Fra... [3]http://www.businessweek.com/articles/2013-11-26/how-facebook-beats-ad-fraud http://www.businessweek.com/articles/2013-11-26/how-facebook...
illicium 12y ago
They've already started using tricks like sending "Do you know ______?" push notifications that can't be turned off to try to get people to open the FB app more. It's not faking usage numbers, but I'm sure logging in just to clear a spammy notification counts towards user activity metrics, which directly ties into ad revenue.

danso 12y ago

Sorry, but this is a blatant begging of the question: - "not so long ago everyone thought Facebook was close to saturation" - "now suddenly they managed to increase the number of users" Maybe "everyone" was wrong? In any case, faking such numbers on a large scale would require a decent-sized conspiracy among at least a couple of department heads. Also, it would be quite illegal. And, being a digital thing, very easy for someone to prove. However, it's possible that the way they characterize numbers has changed, but those details would presumably be in the official filings and financial reports. For example, in recent years, the newspapers audit circulation bureau has changed readership numbers to include categories of web users, not just print circulation. And even before the web, the numbers included an estimated number of readers who read non-bought copies of a paper (i.e., papers left at the coffee shop and passed around). So there could be different standards of counting...in fact, that's a much easier, more legal way of doing things before you start maliciously faking stats.

andrenotgiant 12y ago
Facebook is pretty thorough with its explanations of Daily Active Users (DAU) measurements in its SEC filings: "Daily Active Users (DAUs). We define a daily active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or took an action to share content or activity with his or her Facebook friends or connections via a third-party website or app that is integrated with Facebook, on a given day. We view DAUs, and DAUs as a percentage of MAUs, as measures of user engagement." Going back to the first SEC Filing from July 2012. There is ONE KEY DIFFERENCE in definition of a DAU. Jul 2012 DAU: "...or took an action to share content or activity... ...via a third-party website that is integrated with Facebook." Ref: http://investor.fb.com/secfiling.cfm?filingID=1193125-12-325997&CIK=1326801 http://investor.fb.com/secfiling.cfm?filingID=1193125-12-325... Nov 2013 DAU: "...or took action to share content or activity... ...via a third-party website or app that is integrated with Facebook." Ref: http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&CIK=1326801 http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&...
- rootedbox 12y ago
  i.e. people are just using instagram more, and this counts as DAU.
  - andrenotgiant 12y ago
    Instagram does not count as DAU - Read the first page of this filing: http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&CIK=1326801 http://investor.fb.com/secfiling.cfm?filingID=1326801-13-31&...
    - thesis 12y ago
      But if i click the little FB icon when I post to Instagram, that makes it count as a DAU.
Spooky23 12y ago
Not really. It just requires you to look the other way, or not be as effective as needed in your anti-spam campaigns. Wasn't there a story just days ago that reported that a very significant population of Twitter users have never Tweeted? Last year NPR had significant coverage of companies that wrangled and sold armies of fake twitter followers. (That sort of info is much more transparent with Twitter than Facebook) Why is it impossible to believe that any of the thousands of possible entities aren't farming phony Facebook accounts?
at-fates-hands 12y ago
>> In any case, faking such numbers on a large scale would require a decent-sized conspiracy among at least a couple of department heads. Actually all you would need is a low level manager, a decent hacker (or employee) with skills and a small bot army to inflate the numbers. Considering there's apparently over 83 million fake or duplicate accounts, faking those numbers would be fairly trivial. http://www.cnn.com/2012/08/02/tech/social-media/facebook-fake-accounts/index.html http://www.cnn.com/2012/08/02/tech/social-media/facebook-fak...

hagbardgroup 12y ago

I don't think we know. They should be audited. Eventually, when the general ad fraud scandal [1][2] starts to really harm a lot of companies, there will be pressure to audit usage metrics more stringently. Supposedly though FB has held itself (and FBX, which is overall a great product, in particular) as 'fraud-free.'[3] Dunno about that, especially since faking likes is trivial. Anyone who knows how to operate a search engine can do it in less than five minutes. [1]http://blogs.wsj.com/cmo/2014/03/23/online-advertisings-crisis/ http://blogs.wsj.com/cmo/2014/03/23/online-advertisings-cris... [2]http://searchenginewatch.com/article/2329878/Facebook-Ad-Fraud-How-Can-Advertisers-Combat-Paid-Likes http://searchenginewatch.com/article/2329878/Facebook-Ad-Fra... [3]http://www.businessweek.com/articles/2013-11-26/how-facebook-beats-ad-fraud http://www.businessweek.com/articles/2013-11-26/how-facebook...

illicium 12y ago

They've already started using tricks like sending "Do you know ______?" push notifications that can't be turned off to try to get people to open the FB app more. It's not faking usage numbers, but I'm sure logging in just to clear a spammy notification counts towards user activity metrics, which directly ties into ad revenue.