Is Zuckerberg crazy… like a fox?
Updated: Apr 22, 2019
On March 6 of this year, Mark Zuckerberg made some pretty shocking statements… well, shocking for him. Coming from the CEO of the biggest social media platform on the planet (they count their monthly active users in multiple billions), a platform that essentially owes its growth and success directly to the model of individuals broadly sharing personal information to a group of (often loosely) connected individuals via a digital platform, the statement “I believe a privacy-focused communications platform will become even more important than today's open platforms” is quite something. Private communication platforms will become more important than open platforms? Facebook is an open platform, Instagram is an open platform – does he realize what he’s saying???
Yeah, chances are, he does. According to some recent research from We Are Social and GlobalWebIndex, a majority of social media users are demonstrating a preference for sharing in private or small-group environments. There was nearly a ten-point spread among surveyed users expressing a preference for sharing content via platforms like Messenger and Instagram DMs vs. open social environments, and all signs point to that trend continuing. Perhaps this means that the days of sharing that photo of your avocado toast with your entire social following are numbered? Maybe soon you’ll have a smaller, more intimate group made up of close friends and avocado toast enthusiasts?
Anyway, it’s probably a case of Zuckerberg seeing the writing on the wall and working to get ahead of the trend. In many ways, they’re already doing that with ongoing investments in WhatsApp and Messenger, so this message isn’t really as off-base as it may first appear. He makes a couple of additional points about information permanence and message encryption that have been a long time coming, so nothing too shocking there. The question all of this raises in my mind is, how will Facebook’s business model need to change in order to align with this new strategy?
As we’ve noted (with no small amount of awe) previously, Facebook seems to make about $1000/second in ad revenue. The majority of those dollars, based on our own observations and usage of the platform, comes from feeds. So, if the future of Facebook looks more like Messenger and WhatsApp, and based on Zuckerberg’s statement “I expect future versions of Messenger and WhatsApp to become the main ways people communicate on the Facebook network,” it certainly does - where are the ad dollars going to come from? It’s possible that Facebook will simply continue to deploy ad products as they already have within Messenger, but that doesn’t seem remotely as scalable as feeds. Further, within a private messaging environment, consumer tolerance for intrusive ads will almost certainly be lower. How then, to monetize those eyeballs?
Regardless of their future product direction, it seems clear that Facebook will continue to have access to a lot of data around its users. Zuckerberg did make some promising comments around encryption, but that could mean many things and probably shouldn’t be taken at face value. What seems far less likely is that Facebook will develop a sudden and overwhelming disinterest in making heaps of money, though, so it will be interesting to see where these lines eventually intersect.
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