Reporting six months ago on the announcement of an initial public offering by Facebook, this paper sounded a warning to the social networking site. “An increasing number [of users] are likely to feel bruised as they are confronted with the bitter truth that they are mere fodder for a machine that means business,” wrote our consumer correspondent. A marketing expert added: “It takes clever leadership and in-depth understanding of where you can introduce business elements without destroying your value for users.”
Last week, stock in the company slumped to a new low. Many investors jumped at the first opportunity to offload their shares, reducing the value of the company to £34bn, from £104bn at its debut. To some who use Facebook, it was just desserts.
In many ways, the rise and potential fall of Facebook can be seen as a metaphor for the internet. It was invented in 2004 by a team of college students to fulfil a need that nobody knew they had, and quickly became one of the biggest companies in the world. It went “cash flow positive” in September 2009 with an annual advertising revenue of hundreds of millions of dollars. But although the internet has been around for longer than Facebook’s founder, Mark Zuckerberg, still nobody really knows how to use it. Or to “monetise” it, as the reports in the past week’s business pages put it.
Well, I think the major premise that Facebook does not seem to understand is that “the customer is always right.” I know you have stockholders and all wanting to see a profit, but the first rule of making a profit is to make customers and make them happy.
Zuckerberg has consistently followed the top down Henry Ford pattern of “You can have your Model T in any color, provided the color you want is black,” or in this case, “You can have your individualized Facebook page and experience in any configuration you want, provided you use the Facebook Timeline.” Zuckerberg has just, time and again, changed the user features of Facebook without consulting the customers and often against outcries by people who don’t like the way he’s changed the format or whatever. He thinks he can get away it because there is no other alternative because he thinks he’s cornered the market.
Zuckerberg follows the model of “the customer is always wrong because I know better.” We are watching that model blow up in his face with the Facebook stock fiasco because no one wants to buy stock in a company that treats the customers like mindless minions who will either be assimilated to his way or the highway. If he would actually listen to his hoards of disgruntled users, he’d get a whole lot farther with selling stock.
Facebook helps me to keep up with family and friends who do not live nearby. And by “friends” I mean people I actually know face-to-face. I am actually rather picky about who I “friend” on Facebook, and even then I don’t always choose to have everything they post appear in my newsfeed. There are a lot of people who post every little “cute” photo and saying on their wall just because they can. And, now that it’s the political silly season, there are lots of posts about someone’s favorite candidate or cause or whatever they are railing against. So it’s a mixed bag.
#1: Ah, but here’s the thing: you, the user of Facebook, are not the customer. You’re the product. Zuckerberg is not selling anything to you. He’s selling you to other people.