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Facebook Businesses Social Networks The Almighty Buck

Facebook May Finally Have To Compromise Its User Experience In Order To Keep Growing (recode.net) 122

Posted by msmash from the how-to-maintain-growth dept.
Tony Haile, writing for Recode: Facebook has a problem. What has driven its growth for the last five years won't drive its growth for the next five. However, the options in front of the company involve the kind of user experience compromises that have maimed platforms that preceded it. Facebook makes its money from the West. Some 30 percent of its users and 73 percent of its revenue is from North America and Europe. The monthly average revenue per user for Western users is $3.33 versus 53 cents for the rest of the world. Facebook is a global company, but a Western business. Facebook's user growth in the West is a little over 1 percent a quarter. In North America, Facebook's monthly active users represent 80 percent of the population above the age of 14. If Facebook wishes to grow its Western revenue at the rate its shareholders demand, a 1 percent user growth rate will not do it. Absent rapid user growth, the other lever for increasing advertising revenue is increasing the number or value of ads that are shown to existing users. However, the News Feed is close to saturation. Facebook believes that it cannot stick any more ads in the News Feed without adversely affecting user retention. This combination of slowing user growth and News Feed saturation has led Facebook to warn of a rapid deceleration in revenue growth over the next six months. For the first time in years, Facebook needs a new lever to pull.
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Facebook May Finally Have To Compromise Its User Experience In Order To Keep Growing More

Facebook May Finally Have To Compromise Its User Experience In Order To Keep Growing

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  • Not sure about the rest of you (Score:5, Informative)

    by H3lldr0p ( 40304 ) on Thursday June 29, 2017 @04:09PM (#54715351) Homepage

    but I don't see any advertisements. Ever.

    No game crap and only a few reminders that I asked for.

    Of course, that's because I installed adblock and anti-js tracker everywhere I go. So that may have something to do with it.

    Whatever money FB is making off me can't be all that much.

  • Will raise that without compromising user experience- by targeting the advertising better. Especially real life community groups.

  • Seriously... (Score:3)

    by toonces33 ( 841696 ) on Thursday June 29, 2017 @04:10PM (#54715365)
    Who didn't see this coming..

  • I don't think "may" means what you think... (Score:5, Funny)

    by nwf ( 25607 ) on Thursday June 29, 2017 @04:10PM (#54715367)

    Their user experience has been compromised for ages. I've largely given up following anything. Between the amazingly poor ads, the random ordering of posts and all the fake news and click bait, it's about 92% crap. What's next auto-playing videos? Oh wait, they have those as well. Maybe they'll just start saying "Facebook has detected a virus!" Actually, they kind of already do that as well. They just don't offer to sell you something to "fix" the problem.

    Maybe a new cell phone? Oops there as well. Maybe they'll just start calling people and asking them to go online.

    • I cannot stand auto-play videos and sound. It hogs bandwidth, slows page loads, and wakes up everybody in the house if you forget to turn the volume off. If I wake up my wife, it's doghouse time for me.

      They finally perfected site-selective auto-play prevention plugins for Flash, but not for the newer HTML5 videos. We'll probably have to wait a year or so until those work right.

      And now co's are trying to use JavaScript-based movies, as CPU's get faster. They don't force sound (so far), but still are annoying

      • Re: (Score:2)

        by nwf ( 25607 )

        I won't even try to use Facebook via the web. It's just so terrible. At least the apps are somewhat more bandwidth friendly, but even then, I only visit a few times a week.

        This is a clear case where you understand that you aren't the customer, you are the product.

    • Agreed. Facebook used to be fine. I was never in love with it, but they gave you a feed of your friends' posts, which works fine. They keep adding ads and click-bait. They won't let you see a chronological feed, probably because it was determined that it increased time spent on Facebook if you couldn't figure out whether there were new posts. Between the movies that start on their own, and the tricks Facebook tries to do to make sure it updates constantly, it uses far more data and battery than any two

      • Re: (Score:2)

        by nwf ( 25607 )

        One trick that helped my battery life, at least on the iPhone, was to disable background updating. There's no reason it needs any cycles in the background, except to terminate it and write state to flash (which would happen anyway.)

        Even if you close it, as my wife did, it's not really closed.

    • I've got Google+, and for all those people who used to laugh at me because it wasn't Facebook I can only feel sorry for them. What an utter piece of crap Facebook turned out to be when I finally signed up. All ads, even with adblock, and every single post is either highly political in nature, or a picture of someone's lunch, or a "Take this quiz to see if you're a genius!" posts.

      • Re: (Score:2)

        by nwf ( 25607 )

        I've got Google+ as well, only everyone stopped posting to it early last year. I log in after not using it for a month and there is like one new post. Perhaps if your social network all uses Google+ it would be fine, but everyone I knew migrated back to FB for nearly all updates.

        • Ya, but I don't know many on Facebook. I hit a few seeds for friends but it hasn't expanded on it's own after that and it's kind of difficult to track down people. Oh sure, some obscure people I know from high school but it seems weird for me to add them as friends when I don't even have any cousins or such on it yet. Meanwhile on google+ I have random strangers adding me to circles - either they're desperate or I'm more interesting than I thought.

    • My favourite example of Facebook being deliberately anti-user is their recent decision to change the way personal-message email-alerts work. They used to include the full text of the personal message. Now, they just alert you that you've got one waiting... so you'd better fire up Facebook (ads and all) to see what it is.

  • Good riddance (Score:4, Insightful)

    by epyT-R ( 613989 ) on Thursday June 29, 2017 @04:12PM (#54715391)

    kbye. I hope the company dies. It's entire reason to be is to 'compromise' its users.

    • Too early for funny or anything closer to insight? Anyway...

      Certainly Facebook deserves bankruptcy. Try to imagine if all the time wasted on Facebook was invested in ANYTHING useful. Too bad it isn't going to happen.

      Facebook has first-mover advantage in an age of cancer. Humans are social animals, and even the extremely fake social is highly attractive, even addictive, to many people. Maybe the entire system will collapse and take Facebook down with it, but I'm not advocating for the Trump solution.

      Is there

      • Certainly Facebook deserves bankruptcy. Try to imagine if all the time wasted on Facebook was invested in ANYTHING useful. Too bad it isn't going to happen.

        Think of days before Facebook, the supposedly available "free time" was not "invested" anywhere.

    • Re: (Score:2)

      by gweihir ( 88907 )

      Indeed. Not unlike a slow-growing cancer.

    • Remember to the Marketing People we are all just cattle waiting to be culled.
  • >> Facebook needs a new lever to pull.

    I've got your lever right here.

  • Growth Imperative (Score:5, Insightful)

    by pefisher ( 774697 ) on Thursday June 29, 2017 @04:14PM (#54715411)
    Well, what these companies typically do is make the changes that alienate larger and larger fractions of their old customers (e.g., Ebay). Investors then accept whatever the resulting growth rate is. They accept that rate because it's the maximum they can have. And psychologically, that's all they really want: the maximum. The actual growth rate is what it is, and their greedy little minds accept that. Then everyone quits talking about that particular company. They just click along making all the money that they can make. As long as they are still profitable, all is well.

  • It's not just about filling the newsfeed, it's about capitalizing on the brand to expand the company into other profitable markets. A subscription-based video content service, for example, including compelling original content. Perhaps some solid work on modern education and making various learning opportunities scalable and effective. A solid services recommendation system (which they've worked on but it doesn't seem to be there yet).

    There are lots of markets out there, but if they want a return on capita

  • The true face of Facebook (Score:5, Interesting)

    by xarragon ( 944172 ) on Thursday June 29, 2017 @04:18PM (#54715441)

    I have been waiting for this moment for some years, the point at which we get to "..witness the power of this fully operational personal data trove". Facebook and Google has more information about people than any other companies.

    As pressure for profit increases, more and more uses for this data will be found. I fear that the most revenue-generating uses might be the ones that negatively impacts peoples lives in a big way. Like health insurance, mortgages, recruitment or predictive law enforcement.

    • ...predictive law enforcement.

      They need three companies to activate that feature. The first one is Google, the second one is Facebook. We know the third one won't be Apple, so which company will it be? Twitter isn't big enough and LinkedIn is a business-type-Facebook-wannabe. Amazon could be the third though I suspect they would keep the data for themselves.

      • Re:The true face of Facebook (Score:5, Informative)

        by swillden ( 191260 ) <shawn-ds@willden.org> on Thursday June 29, 2017 @05:58PM (#54716049) Journal

        They need three companies to activate that feature. The first one is Google, the second one is Facebook. We know the third one won't be Apple

        Google would refuse, so if three are needed (why is that?), and assuming that Facebook would play ball, you need two more.

        How do I know Google would refuse? I work for Google and anything like that would be so severely opposed by the culture at Google that there's just no way it would happen, even if management wanted it to -- and management wouldn't. Sergey Brin, in particular, would be up in arms, as would most of the senior technical staff and lots of the rest. Larry Page would also be opposed, but I don't think he'd throw the screaming fit I'd expect from Brin. About the only way it could happen is if it were forced by legislation, and it wouldn't happen quietly, the lobbying would be loud and ferocious. If it still somehow happened there would be a hundred Google Snowdens. Or a thousand. I'd be one of them (though I think I could do it without being caught or having to flee).

        Speaking of Snowden, that's a great example. I was working for Google in 2013 when Snowden's leaks came out and the immediate reaction to the PRISM stuff was utter disbelief with a strong leavening of readiness to grab pitchforks if it were somehow remotely true. There were some really heated TGIFs (weekly company-wide meeting). Then we found that the the NSA was tapping fiber between data centers, and people calmed down since it meant Google wasn't cooperating... and immediately set about making sure that every bit of data flowing across Google networks was encrypted. We already had a great key management infrastructure in place and the "encrypt everything" project had been in progress for some time.

        And when I say "immediately" I mean "faster than was realistically possible". Deadlines for full compliance were short and completely immovable. One of the teams I work with made heavy use of sharded MySQL (which unlike Bigtable provides transactional consistency) via JDBC, but the standard MySQL JDBC stack provides no mechanism for encryption and it wasn't feasible to just run it in a TLS tunnel. So the team had less than 30 days to design, build, test and deploy a secure replacement that integrated with Google's key management infrastructure. And note that it had to work at Google scale; thousands, if not tens of thousands, of queries per second. They did, at least, already have a secure substrate to use. Google's key management and secure networking infrastructure is great.

        Close to the deadline, it was discovered that there was a nasty and very hard to debug race condition that caused intermittent deadlocks (IIRC; it was something like that). In desperation the team said that if they didn't get more time they might have to just shut down for a week or two. Since they built/ran the billing systems, which collect and distribute all the money and a shutdown would inevitably create losses in the tens if not hundreds of millions of dollars, they figured that would get them a postponement. The answer from management was that they might have to shut down for a week or two, the deadline was not moving. As it turned out some amazing heroics plus a fair amount of bubble gum and baling twine kept things going until they solved all the problems.

        So... that's how Googlers feel about sharing information with the government. And if that really surprises you, then you don't know nerds.

        People assume that since Google tracks a great deal of user information to use in targeted advertising that Googlers must not care much about privacy, but nothing could be further from the truth. Google tracks user data, but is extraordinarily careful to ensure that it doesn't leak, not even internally, and isn't used for other purposes. And it is not sold; to government or anyone else.

        It's no accident that Google is not among the many, many companies who've suffered leakage/loss of user data (with the exception of whatever

        • This is good news for Facebook shareholders.

          With no competition from Google, Facebook's data will be more valuable.

          (Note that the original article talked of a slowing of the *rate of growth* of profits, not the profits themselves.)

          What is really needed is a more distributed web. There should be no central holder of social medial. Something like web feeds with some intersite authentication. But that never took off.

          • P.S. Facebook is brilliant in the last regard. Personal posts from all over the world are centralized in one place for easy analysis. The value of that for intelligence agencies is beyond measure.

      • Re: (Score:2)

        by shanen ( 462549 )

        Amazon will gladly sell the data, ANY data or ANYTHING they can sell.

        But why "three" and why exclude Apple? I certainly think Apple qualifies as one of today's most EVIL companies. It's just that their flavor of EVIL is slightly different from the google and Facebook.

        And we shouldn't forget Microsoft, even though their EVIL has largely gone stale. Also the secretive EVIL of Oracle with database-level power over much of our personal data. Oh yeah, and Goldman Sachs. There are others. Forget capitalism. In th

  • They already compromise their users.. (Score:3)

    by Rick Schumann ( 4662797 ) on Thursday June 29, 2017 @04:20PM (#54715455) Journal
    ..so how is it really any worse if they compromise the 'user experience', too?

  • Fuck the shareholders (Score:3)

    by DontBeAMoran ( 4843879 ) on Thursday June 29, 2017 @04:34PM (#54715555)

    If Facebook wishes to grow its Western revenue at the rate its shareholders demand

    The shareholders seem to think we live in an infinite world with an infinite number of people with internet access. However, reality doesn't fit their growth models based on unicorn farts and pixie dust.

  • I suspect there isn't one. The market is saturated, and the service is mature. When people are your only product, and there are no more people signing on to become your products, you're fucked. Earlier on they should have tried out a subscription service model to see if it would fly. It's probably too late for that now - nobody is going to pay for Facebook, because the company has already added pretty well all the features that they might have had a chance of charging subscribers for.

    After the Internet itse

    • no, their product is most certainly people; but new prod...people are constantly being born, while others die. The value this particular parisi...company offers is the ability to accurately track trends.

      What's going to kill facebook in the long run is not a lack of marketshare, it's going to be due to a failure to capture the extremely fickle, hard to reach, yet ultra coveted pre-adult market (basically today's 13-15 year old kids that are on the cusp of becoming actual consumers.)

      This is already starting

  • Grow, grow, grow (Score:3)

    by tylersoze ( 789256 ) on Thursday June 29, 2017 @05:11PM (#54715775)

    I love how the basis of our entire economic system is built around unending growth. That's all you ever hear about, the company has to grow, our economy has to grow, grow, grow, grow. Yep I can't see any long term problem with unlimited exponential growth, no siree.

  • ... what do the non-Western countries want?

    Most have their own "Facebook," and it's going to be difficult to pry those consumer's minds from their current form of online drug.

    • Well what they DON"T want is US culture and cultural values forced onto them.

      And Trump is slowly making the USA and its culture a laughing stock around the world, that is when he's not just being repugnant.

      • It's not Trump.

        It's Americans.

        They are pressing their state and federal representatives to do the People's bidding.

  • All that energy and processing power being wasted as people numbly gaze into their screen scrolling through an endless feed of garbage. What Facebook need to do is make their own Facebook clients which exploit that processing power and turn it into something valuable. A browser or app, that uses some of the power of their users devices to do some processing of data. Facebook could then sell processing time to companies. All this would happen in the background and the user would barely notice. Think amazon
  • The USA is a saturated market for most things, the growth potential in the USA is low and the population of the USA is about 4% of the worlds population.

    Asia is where the real growth is and Asia contains about 60% of the worlds population.

    If Trump goes down the trade war route, he is going to find US companies get locked out of Asia as well as other parts of the world.

    US companies if the wish to grow are going to have to abandon "USA culture", the rest of the world wants their culture and cultural val

  • Facebook are already bringing in billions. Just fucking sit back and enjoy it, and don't mess with the cash cow.

  • When did Facebook ever have a good user experience?

    • Where in the summary does the word "good" appear?

      An already bad experience can usually be made even worse without too much effort...

  • Despite all efforts and despite pretending that it might be possible, it isn't. At some point you can sustain what you got, but you cannot expand anymore. At least not without bursting.

    Ask any bubble.

  • I thought Facebooks user experience always sucked. It's just that the real lives of Facebook users suck even more, so they stick around every day gobbling the poop because at least it tastes better than pile of shit that serves as a miserable excuse for a life. Oh, and can you please tell me what your pet ate for dinner tonight?

    • I thought Facebooks user experience always sucked. It's just that the real lives of Facebook users suck even more, so they stick around every day gobbling the poop because at least it tastes better than pile of shit that serves as a miserable excuse for a life. Oh, and can you please tell me what your pet ate for dinner tonight?

      Modded down by someone who really wants to believe that the reason they spend all their free time and much of their employer's time on Facebook has nothing to do with having a shitty real life.

      • Modded down by someone who really wants to believe that the reason they spend all their free time and much of their employer's time on Facebook has nothing to do with having a shitty real life.

        In my experience it's mostly women with kids who spend a lot of time on facebook.

  • Non sequitor (Score:3)

    by bluegutang ( 2814641 ) on Friday June 30, 2017 @03:53AM (#54718197)

    This combination of slowing user growth and News Feed saturation has led Facebook to warn of a rapid deceleration in revenue growth over the next six months. For the first time in years, Facebook needs a new lever to pull.

    "A rapid deceleration in revenue growth". So they are still going to make money? They are still going to make more money than they ever did in the past? Only the RATE of revenue growth is going to drop, and this is a cause for panic? Here's what is wrong with the US economic system.

  • Let us move to Mastodon
  • Let's not forget that Facebook is an advertising company. They don't produce any consumer product or service. Facebook apps serve the same function as Modern Family does for ABC: to get you to watch advertisements. The total spent on advertising world-wide in all media is around $400 billion (USD). Television is still the largest media, but internet (in all its forms) is catching up. (Radio, print, and others are much smaller.) Let's say that the total internet advertising world-wide is around $100-150 B. (

    • Facebook does provide a useful service. FB enables me to keep track of a large number of dispersed family and friends with minimum effort.

  • I was idly flipping through teh Facebook because I had nothing better to do and I passed by a movie trailer (advertisement) that I wanted to watch. Well, halfway through the trailer an ad for a local car dealership was injected. So, now even the advertisements have advertisements!
  • Screw Facebook.

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