Tags: social media | facebook | stock market | privacy

Unplanned Obsolescence: Is Social Media Dead?

Unplanned Obsolescence: Is Social Media Dead?

Friday, 03 August 2018 12:27 PM Current | Bio | Archive

Love or hate Facebook, its recent misfortunes are wince-worthy. The company’s historic one-day drop in stock price represented a $119 billion loss. As comedian John Oliver noted, the loss was more than the annual revenue of the entire world cheese market.

There’s been no end to the talk about the stock’s crash as a sort of tipping point — the market response to a never-ending parade of Facebook privacy scandals. It had very little to do with the scandals.

That said, were one to connect the dots from headline to panicked headline regarding Facebook’s privacy failures, it would seem like a fairly straightforward story of comeuppance. To review, these failures include but are in no way limited to the slippage of data associated with 87 million users into the possession of Cambridge Analytica (and by proxy the Trump campaign), complicity in an ethnic cleansing campaign in Myanmar, giving mobile phone manufacturers complete and unfettered access to Facebook user data, forcing users to consent to anti-GDPR measures, Mark Zuckerberg’s bafflingly lukewarm response to Holocaust deniers, a privacy loophole allowing marketers access to private Facebook groups… I could go on, but you get the point. Any one of these in a sane and rational world (i.e. not the stock market) might warrant a backlash on par with the single largest drop in the history of publicly traded companies.

But that wasn’t what happened, at least not directly. What seemed to cause the annual world cheese sales-sized drop-off in Facebook’s fortunes wasn’t the cavalier attitude exhibited by founder Mark Zuckerberg with regard to user data, but rather the announcement of a new focus on privacy, and its presumed impact on their profits.

Zombie Companies

What happened is simple: Even before the GDPR became law in May 2018, investors saw a dying business model, and something had to give.

Facebook was the unlucky first victim. Was it overdue for a correction? Who knows. But the market was looking for some way to ease the pressure on the liability of investing in companies that traffic in consumer data. Then the day came when that market sentiment made a move, and all that smart money reacted. It was time to get the hell out of Dodge Facebook.

So to recap: Facebook said they would no longer exploit privacy to sell ads, investors jumped ship, and consumer outrage had nothing to do with it. It was the wisdom of the market.

While this is horribly reductive, for the purpose of this brief post it’ll suffice to say that most people in the business of making money off of big business — i.e. investors — are generally on the same page: Certain kinds of exploitation, including the various types practiced by companies that mine personal information and sell it, are okay.

That is, until now.

The Solution?

Changing to a privacy-first or “privacy positive” model would involve a bit of alchemy for most social media companies, a bit like turning Coca-Cola into herbal tea.

Can building companies around the principle that consumers actually want to protect their privacy be the silver bullet for Facebook and its personal data-devouring? Sure, but only if we are on the same page about silver bullets — specifically that there is no such thing.

All good things come to an end, and it seems even some bad things — and yes, as a consumer advocate interested specifically in privacy, I lump social media together as being collectively a bad thing as far as consumer privacy is concerned.

Can there be a model that doesn’t have the pitfalls of so-called anonymized data and that puts privacy first? I think so, and when it becomes clear which players in that space are doing a good job at it, the market will respond with the sort of rational exuberance with which it abandoned Facebook’s obsolete business model.

Adam K. Levin is a consumer advocate with more than 30 years of experience and is a nationally recognized expert on cybersecurity, privacy, identity theft, fraud, and personal finance. A former Director of the New Jersey Division of Consumer Affairs, Mr. Levin is Chairman and founder of CyberScout and co-founder of Credit.com. Adam Levin is the author of Amazon.com Best Seller "Swiped: How to Protect Yourself in a World Full of Scammers, Phishers, and Identity Thieves." He is the security and credit expert for ABCNews.com and writes a weekly column for The Huffington Post, Inc. Magazine, The Hill, and Newsmax. Mr. Levin is a go-to expert appearing on many national TV programs including "The Today Show," "Good Morning America," "MSNBC Live," "Fox and Friends," "NBC Nightly News," "ABC World News Tonight," "Cavuto Coast to Coast," "Bloomberg Surveillance," as well as radio nationally. Read more of his reports — Go Here Now.

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Love or hate Facebook, its recent misfortunes are wince-worthy. The company’s historic one-day drop in stock price represented a $119 billion loss. As comedian John Oliver noted, the loss was more than the annual revenue of the entire world cheese market.
social media, facebook, stock market, privacy
Friday, 03 August 2018 12:27 PM
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