How Facebook Made So Much Money Despite Its Reputation

January 29, 2021January 29, 2021 0 Comments Technology

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Come slightly nearer to your display. That’s it. I wish to let you know a secret: Facebook is the perfect cash machine on the web, and it’s not a detailed name.*

Facebook could also be an indefensible firm that normalizes invasive monitoring of individuals for . It’s a spot the place extremists have ricocheted hate all over the world. It could also be melting our brains. And it’s being sued or prodded by so many governments that I’ve misplaced depend. You would possibly hate it. I would hate it? But I nearly can’t imagine how many people depend on Facebook, and the way stupidly profitable it’s.

The firm mentioned on Wednesday that its gross sales — almost all of which come from the adverts it sells on Facebook, on Instagram and its different apps — reached almost $86 billion in 2020 and are rising quickly, as my colleague Mike Isaac detailed right here. Each day, 2.6 billion individuals use a minimum of one in all Facebook’s apps, and the person numbers are nonetheless rising.

This is an organization that’s embroiled in a distinct scandal every week and that individuals say they dislike, but its merchandise are utilized by billions of individuals, and companies spent like loopy on adverts throughout a pandemic to succeed in them.

And the actually wild factor is that Facebook’s merchandise value the corporate nearly nothing to make. The Instagram selfie of you being vaccinated, the submit from Mom a few fund-raiser, and your Facebook parenting group — these are the corporate’s merchandise, and most of us are making them without cost. It implies that Facebook could be very worthwhile.

I’ve been writing about company funds for a very long time. I don’t suppose I’ve ever seen this mix of recognition, fast-growing gross sales, fats earnings — and full revulsion. “The gap between Facebook’s public reputation and its financial success has never been greater,” Kurt Wagner of Bloomberg wrote this week.

Historians, tell me if there’s a comparable company that was so reviled and yet so widely used and successful. (If you say the Gilded Age trusts like Standard Oil, I’d argue they make the point for Facebook’s critics who want the company broken up like the trusts of a century ago.)

Near the beginning of the coronavirus outbreak, my colleagues wrote that strong companies like America’s technology superpowers would most likely become even stronger in this crisis. But as corporations’ 2020 financial returns roll in, it’s clear that we underestimated just how much the rich would get richer.

Apple, Netflix, Microsoft and other tech powers are making products that people and businesses are relying on to make it through a pandemic. And they are raking in money hand over fist.

I’m not sure how to feel about this. Yes, I’m grateful that companies like Facebook, Amazon, Google and others are helping us work, go to school, shop, and stay entertained and connected at a time like this. But it’s also hard to ignore the disconnect between their mountains of money and the shaky condition of most major economies in 2020 and the battered finances of many families.

This is not a novel reflection about the gap between the haves and the have-nots in this pandemic. I’m just left again unsure how to answer an essential question: Is what’s good for Big Tech good for all of us?

*(OK, fine. Google search is perhaps the internet’s very best money machine. Feel free to argue with me!)

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Being informed(-ish) isn’t good enough

Thursday is Data Privacy Day. (Cue the balloons!) This fake holiday has become an opportunity for Facebook to remind people to review their privacy settings. It’s also an opportunity for me to remind you that this is a charade.

These nudges from Facebook, as well as the Apple data privacy labels that my colleague Brian X. Chen wrote about this week and a California privacy law I recently wrote about all reveal a fundamental flaw in how our data is treated in the United States.

The mission is to inform us of what data companies are collecting on us and give us (some) measure of choice. But I don’t want being informed to be the final goal.

The focus on making data collection transparent(-ish) is why we have long privacy policies that give a choice between agreeing to anything a company wants to do and not using the service.

It’s why technology executives tout our ability to delete voice recordings from inside our homes — but don’t stop the data from being collected in the first place. It’s why the app Brian uses to open and close his garage door also collects information to target him with internet ads. (YES, REALLY.)

The Washington Post columnist Geoffrey Fowler has written that we should reframe data privacy around a simple question: Why is so much of our information being collected in the first place?

The answer is because companies can. When every company from Facebook to a maker of garage door openers is racing to collect as much data as possible, we can’t really opt out unless you want to cut yourself off from 21st-century life.

So if Facebook reminds you to look at its 40,000 privacy settings, go for it. But I suggest you also remember Geoff’s question: Why is so much information being collected at all?