The “social networking”, its platforms and companies, have taken over the field of social relations from the outset; primarily in the developed world, but not exclusively there. Customs and traditions that were evolving—albeit at a “slow pace” by today’s standards—have been overturned. Yet, while “users” appear enthusiastic, they ignore the levers and real benefits of this upheaval: capitalism is absent or invisible here. This is willful ignorance: the result of the allure of new forms of the commodity—communication and/or sociability.
We must study the consequences of the mechanization of social relations in all their breadth and depth as soon as possible, if anything is to be saved. The following text consists of extensive excerpts from an article by the English author John Lanchester, published in the magazine London Review of Books (August 17, 2017 issue). From our perspective, what we found useful in this reference is that it offers a realistic approach, which may provide insights for future use.
At the end of June, Mark Zuckerberg announced that Facebook had reached a new level: two billion active users per month. This number, which is the way the company prefers to measure its size, means that two billion different people used Facebook in the past month. It’s not easy to realize how unusual something like this is. Just remember that thefacebook – as it was originally named – started in 2004 addressed exclusively to Harvard students. There is no other human endeavor, new technology or service that has been adopted so widely and with such speed. The rate of expansion of its usage even surpasses that of the internet itself, not to mention ancient technologies such as television, cinema and radio.
Equally impressive: as Facebook grows, so does users’ dependence on it. Contrary to what one might expect, the increase in numbers does not mean a lower degree of engagement. “More” does not necessarily mean “worse” – or worse, at least from Facebook’s perspective. On the contrary. Back in the distant past, when Facebook reached one billion users in October 2012, 55% of them used it on a daily basis. Now, with two billion users, the corresponding percentage is 66%. Its user base is growing at a rate of 18% per year – something that seems impossible for a company that is already of enormous size. Facebook’s biggest competitor in terms of registered users is YouTube, which is owned by its mortal rival, Alphabet (the company formerly known as Google), holding second place with 1.5 billion active monthly users. WhatsApp, Messenger, and Instagram are three of the next four apps (or services, or however one chooses to call them) in line, with 1.2 billion, 1.2 billion, and 700 million users respectively (the Chinese WeChat is fourth, with 889 million users). These three companies have something in common: all of them belong to Facebook. It therefore comes as no surprise that the company is the fifth most valuable in the world, with a market capitalization reaching $445 billion.
Along with the news about Facebook’s size, Zuckerberg also made another announcement that may prove significant, or perhaps not. He said the company would change its “mission statement” 1, that is, those pious corporate mottos so beloved in American corporate culture. Until now, Facebook’s mission was “to make the world more open and connected.” A possible question from someone not on Facebook might be: why? Connectivity is presented as a self-purpose, as something automatically and inherently good. But is it really? Flaubert was skeptical about trains, believing that (paraphrasing Julian Barnes) “the railway would only succeed in giving more people the opportunity to move around, meet each other, and be foolish.” One doesn’t need to be as misanthropic as Flaubert to wonder whether the same applies to human connectivity through Facebook. For example, it is widely accepted that Facebook played a major, or even crucial, role in Donald Trump’s election. The benefit for humanity is not clear. Thoughts of this kind seem to have crossed Zuckerberg’s mind, since the new mission statement also gives a reason for all this connectivity. It says that Facebook’s new mission is “to give people the power to build communities and bring the world closer together.”
Hmm. Google’s parent company Alphabet’s mission statement, “to organize the world’s information and make it universally accessible and useful,” was accompanied by the motto “Don’t be evil,” and has often been the target of many sarcastic comments: Steve Jobs once said it was “bullshit.” Which it indeed is, but that’s not all. Many companies, or even entire industry sectors, base their business model precisely on the fact that they are evil. For example, the insurance industry is based on the fact that insurers charge their customers more than the actual value of the insurance; something considered quite fair, since, if they didn’t do this, then they wouldn’t be viable as businesses. What isn’t fair, however, concerns all the cynical tactics that many insurance companies follow in order to avoid paying out claims whenever the dreaded event finally occurs. Ask any homeowner who’s had a claim denied. It’s worth saying “Don’t be evil,” precisely because many businesses are evil. This is a key issue, especially in the world of the internet. Internet companies operate in a space that their customers and regulators understand very little (or not at all). By definition, what a good company does is innovative. In an area dominated by innovation, ignorance, and lack of regulation, it’s worth reminding employees not to be evil, since, if the company proves successful and grows, then many opportunities will arise in the future for someone to actually be evil.
Google and Facebook have been following this path from the beginning, albeit in different ways. I happen to know an entrepreneur who operates in these spaces and has had dealings with both companies. “YouTube knows it has quite a bit of filth under its hood and is willing to do something about it”, he told me. I asked him what he meant by “filth”. “Terrorist and extremist content, stolen content, intellectual property violations. Things like that. But, based on my own experience, Google knows there are ambiguities and moral doubts about some of the things it does, and at least makes an effort to think about the issue. Facebook doesn’t even care. You can tell when you’re in a room with them. They are – he searched a bit for the right word – dirty bastards”.
This may sound harsh. However, moral issues and ambiguities regarding Facebook have existed since its creation, something we know because its creator was active on his blog at that time. The scene is as depicted in Aaron Sorkin’s film about the birth of Facebook, The Social Network. During his first year at Harvard, Zuckerberg experienced romantic rejection. And who wouldn’t react to such a thing by creating a website where students’ photographs would be placed side by side so users could vote for the most attractive one? (In the film, it appears that only women’s photographs were uploaded, but in reality, it included both genders). The website was called Facemash. In the words of the man himself:
“I won’t lie, I’m feeling a little drunk. So what if it’s Tuesday night and it’s not even 10? And? The dining hall’s egg whites are open on my desk and some of these people here have really awful photos. I’m almost tempted to put some faces next to animal pictures and then open a poll for who’s more attractive. Let the hacking begin.”
As Tim Wu explains in his new original book The Attention Merchants (The Attention Merchants), a “yearbook”, in the sense that Zuckerberg uses the word here, “traditionally refers to a kind of natural book that came out in American universities with the purpose of helping in socialization, like those stickers in various social gatherings that write” Hello, my name is… “. Each page was full of photographs accompanied by names.” Harvard already had in the works an electronic version of student yearbooks. The then leading social network, Friendster, already had three million users. The idea of combining these two into a common platform was not something new, but, as Zuckerberg said then, “it seemed a bit silly to me that the university would need almost two years to set it up. I can do better than them and have it finished within a week.”
Wu argues that attracting and reselling people’s attention has been the basic operating model for a large number of businesses, from posters in 19th-century Paris, to the invention of mass-circulation newspapers that made money more from advertising than from their circulation volume, and up to modern advertising and television industries funded by advertisements. Facebook simply sits at the end of a long line of such businesses, although one could say it represents the clearest example of a company whose business is attracting and selling attention. It required minimal innovative thinking to create it. As Wu puts it, Facebook “is a company with an extremely low ratio of inventiveness to success.” What Zuckerberg lacked in terms of originality in thinking, he compensated for with his ability to execute whatever he undertook and to see the bigger picture of things. For emerging companies, it is crucial to stay on track and adapt to changing circumstances. It is this ability of Zuck’s—hiring talented engineers and navigating broader technological trends—that allowed his company to reach where it is today. The two sister companies of Facebook that he brought under its vast wings, Instagram and WhatsApp, were acquired for $1 billion and $19 billion respectively, at a time when they had no revenue at all. No wise analyst or banker would have been able to tell Zuckerberg what the value of these acquisitions was. Nobody knew better than him. He could see where things were heading and give them a push in that direction. This talent of his ultimately proved to be worth hundreds of billions of dollars.
The portrait of Zuckerberg masterfully portrayed by actor Jesse Eisenberg in the movie The Social Network is however misleading, according to Garcia Martinez, a former Facebook manager, in his entertainingly scathing book “Chaos Monkeys” about his experiences at the company. The movie’s Zuckerberg is a rather credible character, a computer genius, almost autistic, with minimal to non-existent social skills. But that’s not how it is in reality. In real life, Zuckerberg had chosen a dual major, both in computer science and – something often forgotten – psychology. Those who are autistic have limited abilities to understand how other people’s minds work; it is assumed they lack a “theory of mind.” But not Zuckerberg. He knows very well how other people’s minds work, especially the social dynamics related to popularity and social status. Facebook initially catered exclusively to those who had an email account from Harvard. His intention was to give the impression that access to the site was a privilege for a few but desired by everyone (as well as to have control over the traffic the site received so that the servers wouldn’t crash. Psychology and computer science hand in hand). Later it expanded to other top American universities. When it opened in Britain, access was initially limited to the universities of Oxbridge 2 and LSE 3. The basic idea was that people wanted to see what other people like them were doing, to see their social networks, to compare themselves with each other, to boast and show off, to fully indulge in every predisposition and feeling of envy, to constantly have their nose pressed against the window of other people’s lives.
This was something that caught the attention of the man who first invested in Facebook, the now-famous Silicon Valley billionaire, Peter Thiel. His initial investment of $500,000 on behalf of Thiel was crucial for the company’s success. However, there is a more specific reason why Facebook caught Thiel’s attention, a reason that lies in a byway of the history of ideas. During his studies at Stanford – where he studied philosophy – Thiel began to become interested in the ideas of the French philosopher René Girard, such as those found in his most influential book, “Things Hidden Since the Foundation of the World.” Girard’s big idea is what he called “mimetic desire.” Human beings are born with a need for food and shelter. Once these basic needs are met, we look around to see what other people are doing and what they want; and we copy them. Thiel summarized it as follows: “mimesis is the basis of all behavior.”
As a Christian, Girard believed that man is fallen within the world. We do not know what we want or who we are; we have no values or beliefs that are truly our own. Instead, we have an instinct to copy others and compare ourselves to them. We are homo mimeticus. “Man is the creature who does not know what he desires and turns to others in order to decide. We desire what others desire and we imitate their desires.” Oh, you little and insignificant ones, look around you and compare yourselves. The reason Thiel latched onto Facebook with such zeal was because there he saw for the first time a company that was mimetic at its core: built upon the deep human need to copy. “Facebook initially spread by word of mouth and furthermore, what it does is deal with what others are saying: and so it is doubly mimetic,” according to Thiel. “Social networks ultimately proved to be more significant than we thought, because they have to do with our very nature itself.” We desire to be seen by others and Facebook is the most popular tool humanity has ever had for this purpose.
…
A neutral observer might wonder how sustainable Facebook’s stance toward content creators is. Facebook needs content, because obviously, that’s what it consists of: content that other people have created. It’s just not very eager to let anyone other than itself make money from that content. In the long run, such a stance could have devastating consequences for the entertainment and media industries. Access to a large audience – such as the unprecedented two billion users – is a wonderful thing, but Facebook isn’t exactly rushing to help you make money from it. If all traditional content providers eventually go bankrupt, perhaps it won’t be such a big problem after all. At least for now, there are plenty of willing providers: all Facebook users, in a sense, work for Facebook, adding value to the company. In 2014, the New York Times did the math and calculated that humanity spent a total of 39,757 years on Facebook per day. As Jonathan Taplin points out, this amounts to “almost 15 million years of free labor per year”4. And these numbers refer to a time when users numbered only 1.23 billion.
Taplin has worked in both the academic and film industry sectors. The reason he reacts so strongly to these issues is that he took his first steps in the music industry as manager of The Band and witnessed up close how this industry was devastated by the internet. What was a $20 billion industry in 1999 had become a $7 billion industry just 15 years later. He saw musicians who had lived comfortably become destitute. This didn’t happen because people stopped listening to music—in fact, more people than ever are listening to music—but because music became something people learned should be free. YouTube is the largest source of music in the world, with billions of tracks played every year; yet in 2015, musicians earned less money from YouTube and other ad-based competitors than they did from vinyl record sales. Not from CD sales or other recorded media in general: only from vinyl record sales.
Something similar has happened with journalism. Essentially, Facebook is an advertising company, indifferent to the content it hosts unless that content allows it to sell targeted ads. Here, a version of Gresham’s law 5 is at work, where fake news that gets more clicks and is produced for free drives out real news, which often tells people things they don’t want to hear and whose production has a high cost. Moreover, Facebook uses an extensive range of tricks to increase its traffic and revenue from targeted ads, at the expense of the news organizations whose content it hosts. It does not curate the news feed it sends to a user based on their interests, but based on how it can extract the maximum possible revenue from them. In September 2016, Alan Rusbridger, former editor-in-chief of The Guardian, told a Financial Times conference that Facebook “sucks out 27 million dollars” from the newspaper’s projected advertising revenue for that year. “They can take all the money because they have algorithms we don’t understand, which act as a filter between what we produce and how people perceive it.”
Here the central question is touched upon regarding what Facebook is and exactly what it does. Despite the rhetoric about connecting people, building communities and faith in people, Facebook is an advertising company. Martinez describes in the clearest way how Facebook ended up there and how its advertisements work. In the initial phase of Facebook, Zuckerberg’s interest was much more focused on the growth aspect and less on profitability. Something that changed when the time came for Facebook to make its money during its first public opening (IPO: initial public offering), that wonderful day for every company when its shares become available to the general public for the first time. It is a very important turning point for every emerging business: for many employees in the technology sector, it is the hopes and expectations regarding this “public opening” that attract them to go and work for a company, but also to remain attached to it. It is the point where money, from the ideal form it had during the early stages of the business, finally takes real form as liquid money at the disposal of a public company 6.
Martinez was there at the moment when Zuck gathered them all to announce that they would go public; it was the moment when all Facebook employees knew they would become rich: “I chose a spot behind two others, who I eventually realized, upon closer inspection, were Chris Cox, Facebook’s product director, and Naomi Gleit, a Harvard graduate who was hired as employee number 297 and who had the reputation of being the longest-serving employee at the company, aside from Mark himself. Naomi was having a quiet chat with Cox when she simultaneously clicked something on her laptop without paying much attention to Zuck’s speech. I peeked over her shoulder. She was looking at an email containing a list of links, clicking them one by one and opening them in separate tabs in her browser. After finishing her clicking spree, she sat examining the tabs with a scrutinizing eye. They were real estate listings, all from the San Francisco area.”
Martinez noted one of the properties and searched it later. Price: $4.2 million. He is captivating and captivatingly bitter when referring to issues of class and social stratification in Silicon Valley and specifically an issue that is never openly discussed: that of the enormous gap between those hired in the early stages of a company, who often end up with mythical wealth, and the wage slaves who staff it in subsequent stages. “The unwritten rule dictates that this subject should not be discussed at all publicly.” As Bonnie Brown wrote in her memoirs, who worked as a masseuse at Google during the company’s early years, “a strong contrast developed between Googlers8 who worked side by side. At the same time you saw one searching his screen for movie showtimes at local theaters, another next to him booking airline tickets for the weekend, for a two-day escape to Belize. What exactly do you expect these people could discuss on Monday morning?”
When the time for the IPO came, it was imperative for Facebook to transform from a company with incredible growth rates into a company with incredible profitability. It was already making some money, simply due to its size—as Martinez observes, “if you multiply any number by a billion, you still end up with a huge figure”—but not enough to ensure an impressive valuation at the time of going public. That was when Zuckerberg focused all his attention on the issue of how Facebook could make money. It is interesting, and to his credit, that until then he had not paid much attention to this matter—perhaps because he is not particularly interested in money for its own sake. But he does like to win.
The solution was to concentrate the enormous volume of information Facebook possesses about its “community” and make it available to advertisers so they could set up advertisements with unprecedented targeting accuracy for any medium. In Martinez’s words: “These advertisements can be demographic (e.g., women aged 30 to 40), geographic (e.g., within 5 miles of Sarasota, Florida), or even based on Facebook profile data (e.g., do you have children, meaning are you part of the moms group?).” Taplin says the same: “If I want to reach women between 25 and 30, with zip code 37206, who like country music and drink bourbon, Facebook has the ability to do it. And not only that, but Facebook can also have friends of these women post a ‘sponsored story’ in the customer’s news feed—so it doesn’t even feel like an advertisement.” As Zuckerberg said at the launch of Facebook Ads: “What influences people more than anything else is being presented with something by a friend they trust. A trusted recommendation is the Holy Grail of advertising.” This was the first step in the process of introducing Facebook to the world of money, when it used its massive size to become a profit-generating machine. It offered advertisers a targeting advertising tool of unprecedented accuracy. (Specific voter groups can also be targeted with absolute precision. One such example is an anti-Clinton ad from 2016 that replayed a notorious 1996 speech of hers on the topic of “super-predators.” The ad was sent to African-American voters living in areas where Republicans were trying to reduce Democratic influence; successfully, as it turned out in the end. No one else saw these ads.).
The second major change regarding Facebook’s profitability occurred in 2012, when internet traffic began shifting from personal computers to portable devices. If most of your online reading is done via a computer, then you belong to a minority. This shift could potentially prove catastrophic for businesses that relied on online advertising, since most people have an intolerance for ads on portable devices and are far less likely to click on them compared to personal computers. In other words, even though internet traffic in general was increasing rapidly, since this increase was primarily due to portable devices, it had proportionally less value. If this trend continued, all online businesses that depended on people eventually clicking some advertisement—virtually all of them, but especially giants like Google and Facebook—would end up having significantly less value.
The way Facebook found to solve this problem was a technique called onboarding. As Martinez explains, the best way to understand it is to think about how many different names and addresses we have. For example, if Bed, Bath and Beyond wants to get my attention by offering me one of its fantastic discount coupons, then it can find me at the address:
Antonio García Martinez
1 Clarence Place #13
San Francisco, CA 94107
If it wants to call me on my mobile, my name there is:
38400000-8cfo-11bd-b23e-10b96e40000d
This is the (approximately) fixed device identifier code, which the device itself transmits hundreds of times every day. On my laptop, my name is:
07J6yJPMB9juTowar.AWXGQnGPA1MCmThgb9wN4vLoUpg.BUUtWg.rg.FTN.0.AWUxZtUf
This is Facebook’s retargeting cookie9, used by targeted ads personalized based on browsing history.
Although it might not be so obvious, each of these keys is associated with a wealth of personal information about our behavior: every page we have visited, things we have bought in regular (non-electronic) stores, every application we have used as well as what we did with it… The biggest buzz right now in the marketing world, what attracts billions of dollars in investments and is the source of endless conspiracies in the minds of Facebook, Google, Amazon and Apple, is the problem of how all these names can be correlated with each other; and who will have control of the connections. Nothing more.
Facebook already had in its possession a huge volume of information about its users, their social networks, their likes and dislikes. However, once it realized the importance of profitability, it added another massive layer of data regarding users’ offline behavior in the real world, through collaborations with large companies such as Experian, which have been monitoring consumer choices for decades, working with marketing companies, credit card companies and retail companies. There does not seem to be a monolithic description of these companies. Perhaps they could be described as “consumer creditworthiness assessment organizations.” However, they have a much broader scope than might appear at first glance. Experian states that it has over 850 million records and claims to have information on 49.7 million British adults and 25.2 million households in 1.73 million postal codes. These companies know everything about your name and address, your income and education level, your romantic status, as well as all the places where you have paid by card. And now Facebook can combine your identity with your mobile device’s identification code.
This was crucial for Facebook’s new profitability. Mobile users tend to prefer the internet over apps, which hoard the information they collect and don’t share it with other companies. A mobile game at most – knows the level you’ve reached within the game and nothing more. But since everyone is on Facebook, it knows the passwords from everyone’s mobile devices. And so it was now able to set up a server with the ability to create much better targeted advertisements than anyone else; and it did this in a much more sophisticated and imperceptible way than all the previous ones.
We have and say therefore: Facebook knows your mobile password and your Facebook password. It combines these with all your other online activity: not only with all the pages you have visited, but with every click you have made – the Facebook button tracks every Facebook user, whether they click it or not. Since this button is present everywhere on the internet, this means that Facebook sees you wherever you are. Now, due to its collaboration with old credit reporting firms, Facebook knows who everyone is, where they live, as well as whatever they may have purchased with plastic money in the real world. All this information is ultimately used for a purpose which, in the final analysis, amounts to something very mundane. To sell you things through online advertisements.
There are two models of how advertising works. Under the first model, advertisers ask Facebook to target consumers with specific demographic characteristics – country music fans in their thirties who drink bourbon or African Americans in Philadelphia who were lukewarm toward Hillary. But Facebook also serves ads through an online auction process that takes place in real time every time you click on a page. Since (almost) every page you have ever visited has planted a cookie in your browser, when you go to a new page, a real-time auction begins, concluding within millionths of a second, to decide how much your eyeballs are worth and which ads should be served to them, based on your interests, your income, and a host of other information. That’s why ads have that annoying tendency to follow you wherever you go, resulting in the same television, the same shoes, and the same travel destination appearing on every page, even if you revisit it weeks later. This is how Facebook, by dedicating resources and talent to solving the problem, managed to turn mobile from a potential disaster into a hot, massive profit bonanza.
Something which means that Facebook does not only operate in the field of advertising, but also in the field of surveillance. In fact, Facebook constitutes the largest surveillance undertaking in the history of humanity. It knows far, far more about you than even the most intrusive government ever knew about its citizens. It’s striking that people still haven’t grasped this. I’ve spent considerable time thinking about Facebook and I keep coming back to the fact that its users don’t realize exactly what this company does. What Facebook does is track you and then use what it knows about you and your behavior to sell advertisements. I have the sense that here we’re dealing with a complete mismatch between what a company says it does—”connecting,” “building communities”—and the commercial reality. It should be noted that the knowledge the company has about its users is not only used for targeted advertising but also to shape the flow of news reaching them. Since there’s so much content available, what you ultimately see is determined by the algorithms used to filter this content: users believe that the news feed they see in their account has mainly to do with their friends and their interests, and indeed this is true to some extent, provided we remember that it concerns their friends and interests as these are mediated by Facebook’s commercial interests. Your gaze is directed where it will have the greatest value for Facebook.
translation: Separatrix
cyborg #10 – 10/2017
- Mission statement: how the company itself perceives itself and what it states is its mission in the world… ↩︎
- Oxford and Cambridge. ↩︎
- London School of Economics. ↩︎
- We disagree with the reference to “work”; it leads to theoretical errors. However, here a time scale class is proposed for “user engagement”. ↩︎
- “Economic law” that says bad money drives out good money. ↩︎
- In the U.S.A., the term “public company” does not mean state-owned, but rather a company whose shares are tradable on the stock exchange, i.e., theoretically available to anyone (hence “public”) and not only to the original owners, so it is considered private. ↩︎
- In the up-and-coming companies of Silicon Valley, there is a tradition of recording the hiring sequence of employees, on the logic that the lower the employee’s serial number, the more senior they are considered to be and the closer to the company’s founder. Usually, a lower number also entails more privileges, e.g., more stock options when the company goes public. ↩︎
- “Affectionate” (sometimes ironic) term for Google employees. ↩︎
- Cookies are small files that various websites install on users’ devices. In the best case, they are used for automatic user identification, e.g., so that the user does not have to enter usernames and passwords every time they visit a page. But they can easily be used to “track” user behavior. That’s why Firefox add-ons that automatically destroy cookies have become popular. ↩︎