Reality Check Facebook, Inc : Fake accounts likely exceed 50%
Reality Check Facebook,
Inc FB
By
Aaron Greenspan January 24, 2019
Executive Summary
On paper, Facebook, Inc. (NASDAQ:
FB) is one of the most successful companies in history. With a market
capitalization that peaked at over $600 billion, Facebook has been the envy of
blue chip executives, entrepreneurs, and venture capitalists since it exploded
onto the global stage.
Facebook claims to
have over 2 billion Monthly Active Users (MAUs), to a large extent determines
which media outlets live and die, connects friends and family members across
continents, and is nearly its own sovereign nation.
What seems too good to
be true often is. The zeitgeist has changed markedly since 2007, when the
company was the obsession of virtually every Silicon Valley investor, having
built its Platform to make the world "more open and connected." Yet
as bad as things have been of late for Facebook, with endless privacy breaches
and Russian interference in the 2016 presidential election hanging over Menlo
Park like a spectre, we believe that the situation is far worse than investors
realize. Facebook has been lying to the public about the scale of its problem
with fake accounts, which likely exceed 50% of its network. Its official
metrics—many of which it has stopped reporting quarterly—are self-contradictory
and even farcical. The company has lost control of its own product.
Fake accounts affect
Facebook at its core in numerous ways:
·
Its customers purchase advertising on Facebook based on the fact
that it can supposedly target advertisements at more than 2 billion real human
beings. To the extent that users aren’t real, companies are throwing their
money down the drain.
·
·
Fake accounts click on advertising at random, or "like"
pages, to throw off anti-fraud algorithms. Fake accounts look real if they do
not follow a clear pattern. This kind of activity defrauds advertisers, but
rewards Facebook with revenue.
·
·
Fake accounts often defraud other users on Facebook, through
scams, fake news, extortion, and other forms of deception. Often, they can
involve governments.
Preaching that
programmers should "move fast and break things," CEO Mark Zuckerberg has clarified over time that
growth at any cost is his only priority. But documents recently revealed show
that since 2012, management has worried about where it can find more warm bodies
to sign on.
Fake accounts have
been keeping the company that Columbia professor Tim Wu has called an
"attention merchant" afloat. The cost of Zuckerberg’s dissembling,
dating all the way back to 2004, has accrued, and is finally coming due.
Accordingly, it is increasingly likely that Facebook will go the way of AOL,
CompuServe, and Prodigy—if legal liability doesn’t bankrupt it first.
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