Meta’s crisis stems from not telling us the whole truth

In a 2018 book see around the corner by Rita McGrath, one of us predicted that Facebook was overdue for a reckoning. “The business model underlying this huge revenue stream is completely opaque to many who, data brokers argue, are willingly disclosing their information in order to take advantage of the free use of these platforms. However, most of us are unaware of how our most personal data is being used in ways that were not economically or physically feasible prior to the digital revolution.”

Simply registering on the Internet creates a digital footprint that provides interested parties with information about our online behavior. While users are only vaguely aware that websites track them using cookies, many are unaware of what are called third-party cookies. For example, if you logged into a news site and that site has a Facebook Like button, a cookie will be placed on your device that Facebook can access. Even if you’ve never visited Facebook or don’t have an account, the social network still receives information about what you’ve been up to on the web. So much for all the people saying, “I don’t have a Facebook account, why should I worry the network has my data.” From its launch in 2004 to its ability to serve over a third of the world’s population achieve, Meta’s growth has been exponential. However, his attitude towards the use of personal data has not changed significantly. His blind spot was not realizing that the public, regulators, competitors and others would eventually take notice of his game.

The business practices of data traders far exceeded the ability of regulators to understand and deal with the impact. For a while, all social media companies that made profits from ads through targeting benefited from the fact that the general public had no idea how ubiquitous tracking was. Others have also expressed dismay at how big tech companies are manipulating factors such as choice architecture to trick us into giving them permission to use our personal information as they please. These powerful digital giants have subtly influenced the minds of voters even in countries like India.

Former Meta employees have also questioned the platform’s societal impact, often lamenting addiction to what Facebook created and blaming it for “tearing society apart.” The documentary 2020 The social dilemma offers a behind-the-scenes look at how social networks are programmed to hijack human emotions and make them pay attention to what they offer and shut out everything else. Some former techies have gone beyond voicing verbal criticism. The Center for Humane Technology, founded by former Google and Facebook employees, seeks to create a unified institutional response to what they see as the negative social consequences of social media addiction.

Despite calls to stop the ubiquitous and unwanted user tracking, nothing has really changed. That is, until Apple got involved. Since Apple doesn’t make its money from advertising revenue, it has no reason to let others track its users. In 2021, Apple introduced App Tracking Transparency (ATT), a non-optional code that every iOS app developer must use. As it turned out, iOS users didn’t particularly like being monitored. Only 16% gave Meta’s apps permission to track them. Facebook and Instagram ads had a harder time finding receptive eyes, and the ad spend, which businesses need to find customers, skyrocketed even as Meta’s ad revenue growth slowed in the very quarter that Apple ATT implemented.

As reported by Fast company, “Like many capitalist success stories, Meta was built on an uncomfortable truth. Throughout the company’s history, there’s been endless talk about “connecting the world,” and very little has been said about how its ad business, which has always made up almost all of its revenue, really works. Now that people and regulators know, the Wild West data heist that made Meta what it is today appears to be coming to an end.” time shows no signs of maturation. Perhaps Meta needs to address the real pain points and privacy concerns of users. As a concept, the metaverse already exists in many forms. This is even true in India. There are many applications where digital technology and people interact to do things that have never been done before such as in education, surgery, emergency medicine, solar tower maintenance, etc.

What happens next? Research reports on companies experiencing a dramatic cessation of growth, as Meta clearly has, are not very encouraging. What is often required is a change in leadership, a change in business model, or some other type of fundamental transformation. Here’s the problem with meta. As Jeff Pfeffer shows, powerful people often act to consolidate their power. Mark Zuckerberg can’t be fired. From nobody. Internally, he probably won’t devote much time to those who question his Metaverse optimism. Those who try to advise him to change direction are reportedly being ignored.

We would place Facebook somewhere where Blackberry was in 2011; that is, still relevant, still powerful, still incredibly wealthy, but absent a major strategic shift likely to become a shadow of its former self.