WorldFacebook, from the 'start-up' that fascinated the world to the empire that...

Facebook, from the ‘start-up’ that fascinated the world to the empire that everyone wants to overthrow

There was a time when Facebook was synonymous with innovation, success, cutting edge and even social purpose. It was the sensation of Silicon Valley, a naturally fertile territory for the hype. It had all the elements to attract attention: it introduced cutting-edge technology, it grew at an exaggerated rate and its mission was to connect people. It was captained by a young man under the age of 30, always dressed in jeans and a T-shirt. It even had an original institutional history: while Apple and Microsoft were born in garages, Facebook emerged on the Harvard University campus as a diversion from a young computer genius.

This company, which was an example of success in the past, suffered on Monday the biggest network crash in its history, affecting for six hours its three main products: Facebook, Instagram and WhatsApp. It was the culmination of disastrous weeks for the company, which was subjected to a journalistic investigation that revealed that its bosses were aware of the toxic capacity of some of its products. Shares in the company, which until then had managed to keep its bad reputation from tainting its economic results, have trailed a 13 percent drop since mid-September, following new revelations about how it puts its profits above the general interest.

At what point did things start to go wrong? How did Facebook go from being the place every engineer aspired to work to becoming an empire with a shattered reputation? Analysts often place the beginning of the end in the same element that allowed it to become one of the five biggest companies in the world: the leap into advertising.

Born in 2004, Facebook was not the first social network, but it soon became the most popular, the one that led the way. Everyone used it. And since the phenomenon was new, no one minded dumping every detail of their life on their murals. Investors were scrambling to inject money into the company, even though it wasn’t clear how they were going to get it back.

Zuckerberg focused during the first few years on capturing users and improving the product, on making Facebook a “cool place”. He didn’t pay much attention to how to generate revenue. That was what his right-hand man, Sheryl Sandberg, the company’s chief operating officer, was dedicated to. She joined Facebook in 2008 from Google, where she had launched the search engine ad monetization engine. Soon ads began to appear on Facebook and, within a few years, the social network dominated the world advertising market along with Google.

Zuckerberg’s Three Fears

A former Facebook top executive once said Zuckerberg has three big fears: having his systems hacked, his employees suffering physical harm, and lawmakers slashing his social network, as journalists at Facebook recount. The New York Times Sheera Frenkel and Cecilia Kang in her book an uncomfortable truth behind the scenes of Facebook and its battle for hegemony (Company of Letters).

Zuckerberg can rest assured: his employees are safe. But the other two fronts are not so clean. The systems of Facebook and its WhatsApp and Instagram affiliates failed this week, and it wasn’t the first time. But, at least from the outside, the reason wasn’t an attack, although even if it was, they probably wouldn’t admit it: most companies tend to keep information of this sort under wraps.

The threat that is taking shape is that of the company’s shredding. In December 2020, the FTC, the US regulatory agency for the industry, and nearly every state in the US filed suit against Facebook for harming its users and competitors. “By using a huge amount of data and money, Facebook has crushed and rendered useless everything the company perceived as a potential threat,” said New York State Attorney General Letitia James, who served as spokesperson for his colleagues from 48 other states, at a press conference in which he presented the suit. “It has reduced the chances of consumer choice, hampered innovation and degraded the privacy protection measures of millions of Americans,” she added at the time.

Zuckerberg’s motto, “move fast and break things” (“Move quickly and break things”), turned against him. In 2012, Facebook bought Instagram for a billion dollars. In 2014, it acquired WhatsApp for 16 billion. By 2019, Facebook had already acquired 70 companies, all of them for less than 100 million, a limit beyond which the regulatory agency automatically intervenes to investigate whether the purchase represents any threat to free competition.

As early as 2019, the FTC announced that it was investigating Facebook. The following year came the action brought to the press by Attorney General James. And a few months ago the European Commission opened a monopoly investigation against Facebook to determine whether the company violated continental competition rules by using data it collected from its advertisers to compete against them.

This year’s appointment of Lina Khan as FTC president does not bode well for the company’s interests. Known in academic circles for an article advocating ways to apply antitrust laws to Amazon, she is a firm supporter of breaking up the big tech companies.

The goal of Facebook, according to several employees of the social network anonymously cited by the The Washington Post, is to move away from the problems generated by its social networks and focus on virtual reality, which it considers decisive for its future strategy, thus becoming a manufacturer of hardware. And, there is an intention to improve the company’s image and claim its role in society. One example is the hiring of Nick Clegg, the liberal British politician who became Facebook’s vice president of communications. In an internal document to which the The New York Times had access, released on Friday and signed by him, Clegg insinuated that political polarization had grown in the US in part due to internal reasons. “In mature democracies, where social networks are widely used, there are elections without this presence of violence”, he stated.

Despite the scandals, the company’s profits did not stop growing, especially during the pandemic, with a 58% increase last year, reaching 29.15 billion dollars, thanks to the impulse of the sale of advertising space on the internet and all the services related to that activity. And while Zuckerberg’s personal fortune dwindled by $6 billion on Monday during the six hours of the blackout, his wealth has risen by 18 billion since the start of the year, reaching $121.6 billion, just behind. by Elon Musk, Jeff Bezos, Bernard Arnault and Bill Gates. During Monday’s technical issues, millions of users downloaded WhatsApp-like messaging services such as Signal and Telegram. But Facebook remains the undisputed leader, with around 3.5 billion users worldwide.

From Cambridge Analytica to Instagram Teens

Facebook already had its reputation damaged before the opening of the lawsuits. The Cambridge Analytica scandal, revealed in 2018, fell like a nuclear bomb. A journalistic investigation showed that political consultancy Cambridge Analytica had access to the profiles of 50 million Facebook users and used this in favor of Donald Trump during the 2016 election campaign that brought him to the White House.

It was also known that Russian agents used the most used social network in the world to interfere in these same elections. Facebook has indeed received much criticism for its ambiguous policy of controlling content that incites hatred or provokes disinformation. With the radical defense of freedom of expression as its flag, the company allowed Trump to say what he wanted during the two elections he disputed. His account was only suspended after the failed invasion of the Capitol by his supporters.

Two days ago, before the blackout that kept the systems suspended for six hours, the former Facebook employee who fed the latest exclusive reports from Wall Street Journal —according to which Instagram executives knew that the social photo network was toxic to teens, but still struggled to get their attention— showed his face in a top-rated television interview. So far, it was the worst thing that had happened to Facebook this week.

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