Back in 2017, before the grisly tale of Cambridge Analytica shocked the world into taking private data more seriously, Facebook was facing up to a quite different problem.
Although it had enjoyed more than a decade of year-on-year growth, the California-based social-media giant was experiencing its first decline in its most profitable market. Fewer people from the United States and Canada were actively using the service. Even more worrying were the increasing numbers of young users migrating to other platforms. Facebook, it seems, had attained the one reputation that high-tech companies dread the most. It had somehow become the social media of choice for (gulp) the middle-aged.
How this happened is the story of how modern technology giants fight to remain relevant. It’s about adapting to the ever-changing marketplace, while it also says something about the next evolutionary step of social media. This might not mark the beginning of the end for Facebook, but we can be pretty sure that the success story cannot continue unless it moves with the times.
Facebook's problem is that cool becomes uncool with remarkable speed in the modern world. Corporate collapses might still be a relatively rare phenomenon, especially when we're talking about mega companies, but many of those that have declined or disappeared did so because there was some fundamental flaw in their business model. Napster failed once it tried to make its hugely popular (but completely illegal) file-sharing service legitimate. Yahoo's slump in the face of Google's success started the moment it stopped providing a rival search engine and became merely a one-among-many media platform. MySpace fell victim to its naive belief that users would design their own websites, a task that a young Mark Zuckerberg realised he could make much easier for people on his new Facebook platform.
The rule is that companies will be left behind if they don’t adapt, but those that are nimble hold on to their customer base. Apple has been mercenary when it comes to moving forward. It rarely looks back and, arguably, abandons hardware too quickly. Yet this has also ensured that their products have remained popular. In the modern marketplace, bold innovation and willingness to adapt is key. Even that old fogey Microsoft managed to reinvent itself with class-leading products such as the XBox One and Surface tablets that appeal to younger generations.
Fourteen years after its founding, Facebook is beginning to show signs of a strategic lethargy that runs counter to its continued success. Zuckerberg described 2017 as a "hard year", yet the company still generated US$4.3 billion (Dh15.79bn) in profits. This discrepancy cannot last. Facebook faces an existential crisis that cannot be fixed by money alone. That "middle-aged" problem needs more than a tweak of image or corporate branding. It's a problem with the very structure that underpins its business.
That business is what’s called “Big Data”. Facebook’s success comes from the huge amount of data it has amassed on more than two billion users. That data allows the company to do the kinds of things that are now under government scrutiny: user profiling, targeted advertising, and other dark arts of the data technician’s trade. Amassing data is the reason for Facebook’s success, but it is also the reason why it appears to be having so much difficulty adapting to the changing audience.
One of the principles of software engineering is that data is modelled after the world the engineers wish to copy. J H ter Bekke wrote in his seminal book on data modelling: “A model represents a certain view of the real world.” In the case of Facebook, that model is based on individual lives reconstructed inside a virtual space. If that sounds complicated, the reality is simpler to explain. Facebook repeats the formal structures of our lives. It forces us to register with our real-world names, and even has that prohibition written into its rules: “Pretending to be anything or anyone isn’t allowed.” Most of all, it works around the assumption that data is persistent, leading to the absurd situation by which Facebook profiles have often outlived the user.
The result is that behind the facade of Facebook’s clean front end sits an astronomically huge set of data that makes it very hard for Facebook to change with speed. It was slow to respond when Generation Z moved to Snapchat, Secret, and Whisper: services that can more acutely target the needs of the younger generation. And that, really, is key. We think that social media shapes who we are but, just as importantly, we shape our social media. Companies that succeed are those that recognise the generational change.
Young people brought up in the hyperconnected celebrity age, where individuality is celebrated unlike any other time in our history, seek to escape the limitations of their ordinary lives. They want to self-create themselves online, living behind an avatar that might be bolder, braver, less judged, or simply more “out there”. That freedom to be who they want to be is very different to the limitations offered by Facebook, which demands that they remain the person they are.
Needless to say: that freedom is hugely attractive. It also means that the next generation of social media is being modelled on a very different kind of user. It makes for a different kind of social experience. Facebook’s business model requires it to retain its data, but that puts it at a competitive disadvantage compared with, say, Snapchat, where posts are deleted from servers after a short length of time. Whisper and Secret even allow users to post material anonymously, effectively removing the “face” from Facebook.
Whatever social media becomes, we can be sure it will be very different to what Facebook offered in the past. It will more closely reflect the interests, ambitions and lifestyles of each generation as they come to form the all-important 18-25-year demographic. That evolution will require entirely new platforms, as we saw when Twitter emerged, proving a more liberal experience than the almost authoritarian Facebook. We should therefore look for four trends to emerge.
The first trend will undoubtedly be around privacy. The Facebook scandal has pushed data security back into the headlines, but it has long been an issue, with government concern about the private use of strong encryption matched by new companies offering military-grade encryption. Social media of the future will certainly make use of stronger encryption, and the days of centralised data might even be behind us. As hacks of private photographs of celebrities have proved, even the "cloud" has its limitations. With this will be a more liberal attitude to identity. The popularity of the current anonymous services will continue to grow, although whether this will become mainstream is yet to be determined. Strong anonymity encourages more aggressive behaviour, although, of course, anonymity also protects you from the worst of the trolls.
The second trend will be towards disposable data. A message that self-deletes after a short time requires no long-term storage. It means that these companies will require less expensive hardware, and therefore be more profitable, compact, and adroit. This is not as trivial as it sounds. As we produce more data, we face the problem of what to do with it. When Facebook began, it would never have considered the position in which it would eventually find itself, requiring huge data centres around the globe. This trend surely cannot continue. Economically and environmentally it makes no sense to store data that might never be accessed again beyond the moment it was produced.
The third trend will be transparency of our social media. The distinction between social media and real life will continue to break down. This is already happening in some areas. Google is pushing ahead with this kind of work, tapping into the power of phones to track your position to produce a social-media experience of your journeys. Many gamers are already locked into a social-media lifestyle without having to do much. Consoles from Microsoft, Sony and Nintendo link to social networks to automatically produce content. Wearable technology will integrate into our media lifestyle and, in the not-so-distant future, become more closely integrated with the body. Already you can have RFID chips implanted under your skin, enabling you to interact with technology in a way that means you no longer need to carry a key card or wallet. Expect this to increase, but in ways we cannot possibly imagine.
The last trend is as philosophical as it is practical. Human history has always been recorded in our written documents, yet when those documents and the written record are missing, so our history is missing. The European Dark Ages are dark for precisely this reason. The move to electronic storage has led many to wonder if we are entering into a similar period of history when our written records could be lost. Who, after all, is going to pay for the electronic storage of your great-grandmother's cat videos, this morning's Facebook update about your breakfast, or the Tweets your smartwatch made about your last run? Yet with every problem comes a new opportunity. As social media becomes more temporal, and we learn to disregard the trivial, the automated, and the white noise of everyday life, there will be businesses ready to exploit our need to store our really important information for posterity. Given where we stand right now, that might be a blessing. Our modern belief in storing everything cannot continue. Nor should it. Once we accept that some data is ephemeral, we might begin to take the rest a little more seriously.
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Read more:
After the Facebook scandal, questions of privacy and consent still aboundZuckerberg agrees with European privacy law but does not commit
After years of ridicule, my Facebook-free status is now a source of envy – like it or not
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ONCE UPON A TIME IN GAZA
Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi
Directors: Tarzan and Arab Nasser
Rating: 4.5/5
KILLING OF QASSEM SULEIMANI
Killing of Qassem Suleimani
Rajasthan Royals 153-5 (17.5 ov)
Delhi Daredevils 60-4 (6 ov)
Rajasthan won by 10 runs (D/L method)
COMPANY PROFILE
Name: Xpanceo
Started: 2018
Founders: Roman Axelrod, Valentyn Volkov
Based: Dubai, UAE
Industry: Smart contact lenses, augmented/virtual reality
Funding: $40 million
Investor: Opportunity Venture (Asia)
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
UAE jiu-jitsu squad
Men: Hamad Nawad and Khalid Al Balushi (56kg), Omar Al Fadhli and Saeed Al Mazroui (62kg), Taleb Al Kirbi and Humaid Al Kaabi (69kg), Mohammed Al Qubaisi and Saud Al Hammadi (70kg), Khalfan Belhol and Mohammad Haitham Radhi (85kg), Faisal Al Ketbi and Zayed Al Kaabi (94kg)
Women: Wadima Al Yafei and Mahra Al Hanaei (49kg), Bashayer Al Matrooshi and Hessa Al Shamsi (62kg)
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
COMPANY%20PROFILE
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More coverage from the Future Forum
How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
THE SPECS
Engine: Four-cylinder 2.5-litre
Transmission: Seven-speed auto
Power: 165hp
Torque: 241Nm
Price: Dh99,900 to Dh134,000
On sale: now
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
Who has been sanctioned?
Daniella Weiss and Nachala
Described as 'the grandmother of the settler movement', she has encouraged the expansion of settlements for decades. The 79 year old leads radical settler movement Nachala, whose aim is for Israel to annex Gaza and the occupied West Bank, where it helps settlers built outposts.
Harel Libi & Libi Construction and Infrastructure
Libi has been involved in threatening and perpetuating acts of aggression and violence against Palestinians. His firm has provided logistical and financial support for the establishment of illegal outposts.
Zohar Sabah
Runs a settler outpost named Zohar’s Farm and has previously faced charges of violence against Palestinians. He was indicted by Israel’s State Attorney’s Office in September for allegedly participating in a violent attack against Palestinians and activists in the West Bank village of Muarrajat.
Coco’s Farm and Neria’s Farm
These are illegal outposts in the West Bank, which are at the vanguard of the settler movement. According to the UK, they are associated with people who have been involved in enabling, inciting, promoting or providing support for activities that amount to “serious abuse”.
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
Killing of Qassem Suleimani
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
UAE currency: the story behind the money in your pockets
ICC Women's T20 World Cup Asia Qualifier 2025, Thailand
UAE fixtures
May 9, v Malaysia
May 10, v Qatar
May 13, v Malaysia
May 15, v Qatar
May 18 and 19, semi-finals
May 20, final
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
What is safeguarding?
“Safeguarding, not just in sport, but in all walks of life, is making sure that policies are put in place that make sure your child is safe; when they attend a football club, a tennis club, that there are welfare officers at clubs who are qualified to a standard to make sure your child is safe in that environment,” Derek Bell explains.
MISSION: IMPOSSIBLE – FINAL RECKONING
Director: Christopher McQuarrie
Starring: Tom Cruise, Hayley Atwell, Simon Pegg
Rating: 4/5