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.