Facebook is in hot water. Again.
Last week, the company saw roughly $120 billion wiped from its market value. Just a few days later, it confirmed the discovery of a political influence campaign, potentially meant to disrupt the upcoming U.S. midterm elections.
Are any users deleting their accounts over all this? If not, what’s keeping them tied down? In today’s “Big Story” podcast, futurist and tech columnist Jesse Hirsh explains why Facebook is so frail these days, and goes through some possible scenarios for the tech giant in the next 10 years.
He says Facebook is still the king of social media. “For now, yes. I think Facebook is still in a very dominant position.”
“If anything, because of Instagram and WhatsApp, in that they’ve diversified their holdings. And they are almost a quasi-monopoly in that they no longer have to innovate themselves. They just need to be in a position to buy or co-op any innovation that may happen in the social media sector.
“Further, Facebook is kind of a force of gravity, in that they have so much of our information. They have such a strong relationship with advertisers. It would be really hard for anyone to compete with them, let along slay the giant. In that sense, as long as Facebook sort of says, ‘Look, we’re addressing our problems,’ that might be enough momentum for them to maintain that dominance.”
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Hirsh says people have every reason to be skeptical about Facebook’s ability to address these problems, “but I do think that the company is finally taking it seriously.”
“They’ve had a culture of arrogance. That’s why they’ve been able to constantly say they’re doing something, even though no progress is being made. But I think the boss — Zuckerberg — really, finally understood the weight and severity, and the threat to the company as a whole. So, I think with his weight, with his pressure, the company is finally starting to do something. But I’m skeptical as to whether it’s enough.”
He believes this is a long-term problem that will eat into Facebook’s profitability. “I think that’s one of the reasons why investors really started to take a closer look. Hence, stock prices started to fall.”
Hirsh says our relationship with Facebook is important to keep in mind.
“It has so many of our photos, so many of our family members, so many of our friends. And [with some,] the only way we communicate with them is via Facebook. That creates a kind of force that’s is complacency. It just means we’re not going to bother to change, unless we have really good reason.”
He thinks it would take a solid competitor for many people to leave. “Whether that’s a Google, an Amazon, a Microsoft, or just some startup that comes out of nowhere the way Facebook did.”
“If you have one car, you’re not going to go to a new type of vehicle. You’re going to buy a car that you can trust, that performs in the same way as the one you’re currently using. I think that’s an advantage for Facebook. As long as they keep adding new features — as long as they keep stealing futures from other apps — then there’s no real incentive for us to try something new.”
However, Hirsh thinks the privacy issue hits home for many people. “It’s those types of stories that increasingly give people reason to log out and, if anything, find an alternative service.”