Facebook stock drops more than 20% after revenue forecast misses

https://www.marketwatch.com/story/facebook-stock-crushed-after-revenue-user-growth-miss-2018-07-25

by noncoml • 8 years ago

618 388 8 years ago

utopcell• 8 years ago

From the article: ``The company reported 1.47 billion daily active users, while Wall Street expected 1.49 billion; it logged 2.23 billion monthly active users, as analysts expected 2.25 billion.''

It doesn't feel like the results justify the 20% drop.

cm21872• 8 years ago

I presume the dollar value of a US or European user to advertisers is greater than that of an Indian or African user. European user count going down is problematic.

But the problem with these after hours sessions is that they don't have much liquidity and that you can easily have a market squeeze due to people covering their position. This is what happened with the VIX ETNs.

zeusk2• 8 years ago

Everyone but most retail investors can trade during AH, while the liquidity may be lower - I'd say the participating agents are more logical and have enough capital to drive big moves.

jfim• 8 years ago

From their last quarterly report, quarterly ARPU is 25.91 for US/Canada users, 8.76 for European users, 2.62 for APAC users, and 1.91 for the rest of the world.

It's likely that European and US/Canada user count growth is flat or nearly so, and their gains recently have been out of getting more dollars per user through increasing advertising revenue as opposed to getting more users. It could be (or not) that they can grow those revenues even more.

samfisher83• 8 years ago

There have been 34 million shares traded after hours. Avg volume during the day is 19 mil.

kbyatnal• 8 years ago

You missed this from their earnings.

“Our total revenue growth rates will continue to decelerate in the second half of 2018, and we expect our revenue growth rates to decline by high single-digit percentages from prior quarters sequentially in both Q3 and Q4."

jessedhillon• 8 years ago

The numbers have been growing continuously since the beginning, until this quarter[1]. Traders are reacting to the idea of "peak Facebook" -- that is, an end to growth -- and not just a 1.4% drop in DAU.

[1] https://www.statista.com/statistics/346167/facebook-global-d...

matthewaveryusa• 8 years ago

And even more so -- their guidance was pretty terrible for the next couple quarters.

everdev3• 8 years ago

I think it's more about their revenue miss and some concern about their scandals impacting revenue.

The company’s top line was $13.04 billion, weaker than $13.34 billion analysts expected, suggesting that the world’s largest social network has begun to feel some of the effects of the controversies that have battered it during the quarter.

uptown• 8 years ago

Facebook MAU was flat in the U.S. and Canada.

It declined in Europe.

Expect total expense growth to exceed revenue growth in 2019.

Also expect revenue growth rates to decline by high single digit percentages from prior quarters sequentially in Q3 and Q4.

They painted a rough road ahead compared to how the stock had been valued in many people’s models.

aylmao9• 8 years ago

I can see the decline in Europe being unsettling, but I'm not really surprised about US/Canada. ~185 million is about 52% of the population of US/Canada [3]. If we assume 35% of the population is simply too young to use it (20% under 14 [2]) or too old to be drawn to it (15% is over 65 [1]), that leaves only 13% of US/Canada's population which are feasible MAUs no being MAU, which is crazy.

[1] https://www.census.gov/newsroom/facts-for-features/2017/cb17...

[2] https://data.worldbank.org/indicator/SP.POP.0014.TO.ZS

[3] https://www.wolframalpha.com/input/?i=185+million+people+%2F...

not_that_noob• 8 years ago

I wonder how much of the European decline was driven by GDPR rules, especially opt-in requirements. GDPR-like laws are being debated on and passed here in the US by individual states. Probably a tough environment to expand on MAU right now.

lostmsu• 8 years ago

What about time spent by active users? They can still be active, all right, but not so much.

refurb• 8 years ago

It doesn't feel like the results justify the 20% drop.

You have to remember one main way analysts estimate what a share is worth today - they model out time-discounted earnings in perpetuity. A company that is expected to grow in the future is worth much more today than a company that isn't expected to grow at all.

The stock didn't drop because they missed this quarter alone, it's because all the analysts models are now assuming future earnings will grow much more slowly into the foreseeable future.

mtgx2• 8 years ago

Markets tend to over-optimize. That's why I warned caution when many were saying the Cambridge Analytica scandal didn't harm Facebook, even though it was obvious FB was being quite misleading about what was actually impacted at the time and about the fact that their good results were actually given by the stuff that had happened before Cambridge Analytica.

Over-optimization means that even when a string of bad news hit, the stock may not change much because of the previous string of good news still having inertia and the market "not really believing" the new bad stories. But eventually the market sentiment changes, and then it all comes crashing down, and now the bad news are over-optimized, and the good news become irrelevant. And the cycle repeats itself.

This is harder to see with stock because it tends to happen over a multi-year span, but it's much easier to see with cryptocurrencies where this happens over a several months period.

jmknoll• 8 years ago

Can that statistic be interpreted as 65% of people who use Facebook at all use it every day? That’s some pretty impressive stickiness

mrweasel• 8 years ago

The issue isn't that Facebook isn't doing fine, it's that they missed their forecasts. Wall Street wants predictability and if you can't predictably forecast your next quarter/fiscal year, then you become a liability.

You could have a bad quarter and not get punished (too much) for it, assuming that your forecast was correct.

westpfelia• 8 years ago

well when you have a PE ratio of 33 anything but forward progress is bad.

woodpanel• 8 years ago

It doesn't feel like the results justify the 20% drop.

Neither does it for me.

FB is still the only real GOOGL competitor in the ad market. It's revenue and market share is growing. All it has to do is extracting more money from its huge user base, which at least with instagram it hasn't really tried for now.

Employing content reviewers won't come cheap, but that investment is going to be faced by all social media platforms and in turn will be sector neutral. Facing regulatory burdens with measures like this helps the big ones manifest their oligopol.

While I can echo most HNers sentiment (I too decreased my FB usage before and after the CA scandal) I think we are not precisely the best socio-economic group to serve as indicator for what drives people or doesn't: Most people are happy to share on social media platforms (no matter how repugnant I feel about it) and there is no social media real estate like FB or IG around.

Fundamentally it's still cheaper than GOOGL in terms of P/E and just costs half of what GOOGL costs for every $ of FCF.

everdev3• 8 years ago

Wehner also said Facebook still expects expenses to grow 50% to 60% from last year
“But as I’ve said on past calls, we’re investing so much in security that it will significantly impact our profitability,” Zuckerberg said. “We’re starting to see that this quarter.”

That sounds like a big 1-year jump. From what I can tell, the big Facebook scandals (fake news, Cambridge Analytica) came from faults in company policies rather than security glitches.

I wonder if labeling it "security" is a PR thing as their web ads all focus on FB taking active steps to make sure those types of scandals don't happen again.

Bucephalus355• 8 years ago

To be fair, security is an amazing amount of policy. I took and passed the CISSP, and that exam must be at least 30%, maybe 40% policy. Things like knowing how does the Commerce Department’s rule of Safe Harbor apply to US companies doing business in EU. Stuff like that.

That being said, it made me way better at my job. No matter how many technical justifications I have for why we should implement X, the second I brought up a small to medium legal thing everyone would fix it immediately.

paxy• 8 years ago

But how do policy changes result in a 50% increase in total expenses? They can't be hiring that many lawyers.

notveryrational2• 8 years ago

Real security is almost all technical and implementation. There's a very significant danger to security that policies be some kind of front line of defense, or be implemented over sound engineering practices.

In almost every work environment, I've seen the policies working directly against security: if not by contradicting it, ignoring the details where the real security decisions live, or by striking the wrong balances between prescriptiveness and generality - then by out-prioritizing security decision making. (I've worked at mostly 100,000+ person companies).

It's much better to have technical security controls >80-90% of the actual security. It's just expensive and harder to teach/learn/implement.

That said, there's some real security gained by policy. It comes from: - Ability to communicate expectations ("adopt technical solution X") - Ability to exercise legitimized (instanciated/codified) authority

Most of the rest of the value of policy comes in as business enablement value (policies are easier to communicate to auditors than security control implementations are).

Policy can also be a useful placeholder for real security in the sense it will satisfy many external parties who might otherwise reprioritize/randomize security investments.

smileysteve• 8 years ago

There's some truth that lack of "security" is what makes money (ads) and gets views (fake news stories), and users (fake users).

ggg99904• 8 years ago

A lot of their security/policy work is hiring tons of humans to fix things. For example they are hiring an additional 10,000 content moderators. That will obviously impact profitability.

coliveira• 8 years ago

Just like Google, they are learning that AI is not up to the task of dealing with humans that try to game the system by all means possible.

narrator2• 8 years ago

China has a huge staff of these people too. I think at last count they had 20,000 people employed doing content moderation for the country.

sonnyblarney2• 8 years ago

I was directly involved in one of those 'incidents' several years back where FB gave our app a special API that others did not have. This was because it was easier for us to build the 'FB experience' for their users, than it was for FB themselves. It was clean, legit, above board and secure.

It's astonishing how different the 'media narrative' is from reality, and it confirms my belief that the press runs on such narratives (i.e. building up, crashing down) because in both directions the truth is inflated for dramatic, i.e. click-bait reasons.

Our large company built a very good FB app that effectively was 'FB' on our platform. It was FB branded - for users, it was effectively the 'real' (and only) FB. Obviously that app had to have special APIs.

Everyone involved from top to bottom was pro. We didn't store data, nor did we want or need to. The way the tech was setup (data goes to app), we didn't really have the option. Users logged into their own accounts and retrieved their data, it's not like we could just access data arbitrarily.

Everything was pro and above bar - and nobody in the equation - a lot of us regular, conscientious people - thought for a second that anything was wrong or irregular in any context.

In fact - the whole situation could be described as: "FB hired 3rd parties to develop some code", which surely they do in some circumstances.

Nobody was harmed in any way, and there really wasn't risk of anyone being harmed.

I understand that with 2018 hindsight, we might look at things a little differently, but in reality, I think we'd have still done it. Perhaps there would have been more checks and assurances (i.e. FB takes ownership of code and actually publishes the app), but in reality it was (and would still be) fine.

As far as the Cambridge story - this is also misleading because the API's that were used there were available to the entire world and everyone knew exactly what they were. Were there tech people screaming foul? The press? Not really, they seemed reasonable, until it seemed that some bad agents were getting a little unscrupulous, and so FB did the right thing and altered the APIs to make them more secure. Security polices change all the time, in this case they tightened up given some field data. That's it.

It's really a story about Cambridge's scammy behaviour, and possibly lies to FB on where that data was, not about FB.

I don't like Facebook, I don't use it, I don't like being 'productized' etc. etc. - but I don't feel that the information in these scenarios has been properly handled by the media.

Because there are legitimate issues with privacy in the new world order in 2018 that are finally coming to bear, and we definitely want to re-evaluate our situation with FB, basically, we go and dig up 'something that happened 10 years ago in which nobody was harmed' to build a 'kind of misleading narrative' around the the 'legitimate issue'.

NikolaNovak• 8 years ago

FWIW - Every time I have has personal knowledge of IT issue that made news, it made me lose faith in news. I'm not talking the minor, regular and downright stereotypical "Journalists don't understand technology", but major spins of context, impact, background and history. I'm currently on a system that's been making front pages in my country, and while the factual details of impact are largely accurate, what causes them, background, what can and should be done about it are wildly inaccurate (and not in the "reasonable people can disagree / many technical solutions have merit" sense; in the "what are you smoking / why does anybody think or believe that" sense :P )

orf• 8 years ago

I get your point, but most of your post could be reduced to "we didn't do it, so it doesn't happen".

Facebook giving out privileged API's willy-nilly without verifying who the people operating them really are is the issue. If a bank gave the keys to their vault to some shady people then you blame the bank.

sp332• 8 years ago

the API's that were used there were available to the entire world and everyone knew exactly what they were. Were there tech people screaming foul? The press? Not really,

Yeah they were, and that's why the APIs were eventually shuttered. FB even secured a promise from CA that they retroactively deleted the data.

ggg99904• 8 years ago

The overfocus on Facebook hides the much more important and sobering point — if you tell someone exactly what they want to hear, they can be induced to vote for you, which calls into question the real long-term value of democracy as a politics architecture.

bogomipz3• 8 years ago

How about the fact that Zuckerberg was summoned to Washington to testify before Congress and failed to disclose the ongoing data-sharing agreements FB has with 60 or so device manufacturers?[1]

In addition to willfully misleading Congress it also likely violates their 2011 FTC consent decree[2]. Is this also just part of the 'media narrative' you claim is different from reality? I think these revelations amount to pretty "scammy behavior" as well, to borrow your terminology.

[1] https://www.wsj.com/articles/facebook-gave-some-companies-ac...

[2] https://www.ftc.gov/news-events/press-releases/2011/11/faceb...

throwaway5752• 8 years ago

You're basically saying, "nobody cared about their material security weakness until someone did something bad with it"

How is that not true of every single security/privacy incident, ever? If the situation was, "everyone knew 23andMe was storing non-deidentified genomic data on an unsecured S3 bucket, and this was fine until [insert villian] took it" it would be the same, and people would be justifiably pissed off. This feels like a completely correctly handled story in the media, your personal anecdote about working with Facebook notwithstanding.

madeofpalk2• 8 years ago

As far as the Cambridge story - this is also misleading because the API's that were used there were available to the entire world and everyone knew exactly what they were

That was actually the entire point. That Facebook had these overly... generous APIs for anyone to use. That's not a good thing.

GeekyBear• 8 years ago

Were there tech people screaming foul? Not really

Yes. Really.

Sandy Parakilas, the platform operations manager at Facebook responsible for policing data breaches by third-party software developers between 2011 and 2012, told the Guardian he warned senior executives at the company that its lax approach to data protection risked a major breach.

Parakilas, whose job was to investigate data breaches by developers similar to the one later suspected of Global Science Research, which harvested tens of millions of Facebook profiles and provided the data to Cambridge Analytica, said the slew of recent disclosures had left him disappointed with his superiors for not heeding his warnings.

“It has been painful watching,” he said, “because I know that they could have prevented it.”

Parakilas said he “always assumed there was something of a black market” for Facebook data that had been passed to external developers. However, he said that when he told other executives the company should proactively “audit developers directly and see what’s going on with the data” he was discouraged from the approach.

He said one Facebook executive advised him against looking too deeply at how the data was being used, warning him: “Do you really want to see what you’ll find?”

https://www.theguardian.com/news/2018/mar/20/facebook-data-c...

eropple• 8 years ago

Your description of writing an app for your platform sounds fine...but in that same era they were throwing Instant Personalization out there. Which was profoundly fucked up; I was involved with the deployment of it at a large site, hated it the entire time, and the creepy behavior of it was a fairly big reason why I left that company.

https://www.zdnet.com/article/facebook-instant-personalizati...

cm21872• 8 years ago

I don’t disagree with your view on the media, but as a banker I say to tech people: welcome to the club. Welcome to a world where the media will pick a fraud somewhere in a large organisation and generalise it to all employees or to the whole industry, will twist facts to the limit of honesty to make a point, will call outrageous some technical and inocuous business practices, and will run months long campaigns on a single incident. Welcome to a world where the media hate you.

beagle36• 8 years ago

Were there tech people screaming foul? The press? Not really, they seemed reasonable, until it seemed that some bad agents were getting a little unscrupulous, and so FB did the right thing and altered the APIs to make them more secure. Security polices change all the time, in this case they tightened up given some field data. That's it.

Others quoted about screaming foul from within facebook. I was involved with RTB ad exchanges at the time, and everyone knew that the data is available to whomever wants it, with facebook's tacit approval.

Gabriel Weinberg (yegg) founder of duck duck go had a story on his blog about how he targeted his own wife with a facebook ad, and about how easy it is profile/get everyone's FB data, and he wasn't the only one.

Your experience may have been different; it looks to me like you'd rather look at the world through rose tinted glasses and give FB an undeserved benefit of the doubt -- but I'll accept that this was your experience. However, I have about 20:1 anecdata about "improper FB" than "proper FB", so I tend to believe the latter.

If there was one story of patents done right, does that indicate there are no patent trolls and it's all blown out of proportion?

Wheaties466• 8 years ago

Thanks for commenting and sharing your insight but I don't think the average person knows or cares what that meant. The problem with CA was that an app developer was allowed to sell user data without the users knowledge.

nojvek• 8 years ago

Great you had a legitimate issue, can you trust each and everyone of such api users to behave in good faith?

That’s the problem. It only takes one bad actor.

pdpi• 8 years ago

Security isn't just "people can't get inside our servers", it's a much broader topic than that — anything that looks like "people didn't something that, in hindsight, we'd rather they couldn't have" falls under that purview, really. I'd certainly qualify working on preventing the next Cambridge Analytica, or preventing the next micro-targeted political propaganda campaign, as "security work" without even blinking.

casefields• 8 years ago

Security is gobbledygook. It’s why politicians love using national security with legislation.

ebikelaw3• 8 years ago

Well, the stock dropped a bit after the report, but then it fell off a cliff during the call. It must be the forecast and not the results that is really spooking people.

geetfun• 8 years ago

The guidance is nice. It resets expectation, especially amongst the analyst community. Makes it easier for FB to beat expectations the next time around.

gnopgnip• 8 years ago

How are stock price drops reported when the market is closed?

ebikelaw3• 8 years ago

The same way they are reported when it's open: approximately, with the cooperation of the various market makers.

mortehu• 8 years ago

The closing auction signifies the end of regular trading hours (where more rules are in effect) but not the end of all trading. US stocks now trade 24/5 on at least one market, and well beyond 4pm ET on many more.

yalph• 8 years ago

Its mostly because of the guidance, not the miss.

drewmol• 8 years ago

"and at the same time, it was encouraging to see the vast majority of people affirm that though want us to use context, including from web sites this they visit, to make our ads more relevant and improve their overall product experience.”

I assume the vast majority clicked 'Agree' or similar on prompts about updated policies, but it's funny to phrase it this way. Obviously if asked directly, the vast majority would't actually affirm that.

Animats• 8 years ago

The market has expected this for years. Look at Facebook's declining P/E ratio.[1] 81 in 2005. 22 now. Successful established companies have P/E ratios in the 10-20 range. Facebook is coming in for a landing as an established company, ending its growth company phase. This is a normal part of the corporate life cycle.

[1] https://www.nasdaq.com/symbol/fb/pe-ratio

dawhizkid• 8 years ago

You cannot say a 20% drop AH is "expected" by investors. If this was truly "expected" then the slowing growth would've been long accounted for in the price.

perl4ever4• 8 years ago

I think you* have unreasonable expectations for precision in valuation. 20% is not a large fluctuation in the context of the unlimited future of a company. Something truly unexpected would make an order of magnitude difference.

*but you're not alone.

matte_black2• 8 years ago

Don’t bother stressing over after hours drops like this. Right now FB is still a buy and when the market opens in the morning it could quickly rise up several percent again, and probably be back in the 200s soon to enough.

robryan• 8 years ago

Market would be expecting the direction, but underestimated how fast it would be. Or the revenue growth numbers are about on expectation but the size of the margin decline is unexpected.

this_user• 8 years ago

The P/E ratio is backward-looking, because it considers past earnings, not future earnings. AMZN has a P/E of 293. AAPL has 18. TWTR has 90. This is not a terribly meaningful metric for tech names with huge growth potential.

what_ever4• 8 years ago

Overall what they say make sense. It's coming down indicating that the growth is slowing down? I think 20% correction is huge and just unexpected.

qubax4• 8 years ago

This is not a terribly meaningful metric for tech names with huge growth potential.

Think that was OP's point. That facebook has matured and is no longer a growth company.

tonyedgecombe• 8 years ago

It means the market doesn't think there is any "huge growth potential".

bigtones• 8 years ago

Yhis was all after the bell as was the earnings announcement, and the quoted stock drop was in the after hours trading market, so it could be less tomorrow in the standard market.

ebikelaw3• 8 years ago

It's funny to suggest that after hours trading means less. The people trading during the regular session were literally just gambling, whereas the people trading in the after are trading on new fundamental information.

What I'd really like to know about today's regular session is why seven billion dollars worth of shares changed hands on the last tick.

zeusk2• 8 years ago

What I'd really like to know about today's regular session is why seven billion dollars worth of shares changed hands on the last tick.

Not all trades are reported real-time; Dark pool executions are often bulk reported prior to end of day settlement.

jonknee• 8 years ago

What happened before they whiffed on earnings doesn't matter, new information came out and the market ran away from Facebook like it was contagious. 32,725,304 FB shares have traded after the bell, that is a "real market". The 10-day average daily volume is ~17.5m so this is hugely significant.

ceohockey60• 8 years ago

The pessimistic guidance dovetails well with Zuckerberg's recent, wide-ranging interview with Kara Swisher[1]. FB has been the darling of tech and general media, until the last 2 years--turning a great brand to an increasingly toxic one. By Zuckerberg's own estimation, FB's "retooling" needs 3 years, and they are about 1 1/2 years in, so the guidance reflects that timeline. If they deliver on that timeline, a rough 2nd half of 2018 and all of 2019 is to be expected.

[1] https://www.recode.net/2018/7/18/17575156/mark-zuckerberg-in...

bradenb• 8 years ago

I think the stock price is finally catching up to reality and public perception. I've noticed a huge resistance to using Facebook in recent years within my social sphere. Professionally, I'm one of the few that I know that still use the service; I think it's FOMO keeping me on, but I find it extremely difficult to add content to my profile and find myself mostly acting as a passive consumer of others' content.

mattbeckman• 8 years ago

Install Newsfeed eradicator and then remove the app from your phone. Brought me down to maybe check the site once every couple weeks for notifications.

rajataghi• 8 years ago

But the thing is that the same people resisting Facebook are spending more and more time on Instagram....which is owned by facebook.

astronautjones• 8 years ago

but ig is so much harder to advertise / convert on

mrep11• 8 years ago

They have over a billion daily active users. That is more than the EU and the US COMBINED! Any personal opinions about a product are practically useless when your customer base is that freaking large and diverse.

Edit: I avoid facebook like what seems like most other people here on hacker news but my point is that hacker news is in no way shape or form representative of the global population.

GranPC• 8 years ago

That is more than the EU and the US COMBINED

Source? From two quick Google searches it seems like the EU and the US Z combined make more than 1bn users.

randomsearch3• 8 years ago

DAU != people.

cs7023• 8 years ago

User growth is slowing down to a crawl:

* There are 4.16 billion Internet users worldwide.[a]

* 26.3% of the world's population is under 14 years old, close to Facebook's minimum age of 13.[b] This means 73.7% of the world's population is at least 14 years old.

* If we assume the population of Internet users has a similar age distribution as the world's population, that means there are around 4.16 * 73.7% = 3.07 billion Internet users who are at least 14 years old. This is a rough estimate of the maximum possible number of people who can have an account with Facebook today, i.e., the size of the company's addressable market (in users, not dollars).

* The true size of Facebook's addressable market could be higher (for example, if the age distribution of Internet users is different)... but it could also be significantly lower (for example, if a substantial number of Internet users cannot or will not join Facebook due to religious, cultural, or governmental restrictions, or due to the availability of established regional alternatives).

* Facebook just reported monthly active users of 2.23 billion, up only 11% from 2.01 billion a year ago.[c] This isn't exactly stellar user growth. The company now has around 73% penetration of every person in the planet who can join Facebook today. Again, this is a rough estimate.

* The company's CFO disclosed in today's quarterly earnings call that the company expects a "deceleration" in growth.[d]

[a] https://en.wikipedia.org/wiki/Global_Internet_usage#Internet...

[b] https://en.wikipedia.org/wiki/Demographics_of_the_world#Age_...

[c] https://investor.fb.com/investor-news/press-release-details/...

[d] https://www.cnbc.com/2018/07/25/facebook-warns-investors-of-...

EDITS: I updated the global Internet usage figures based on dooglius's comment below (the Wikipedia page is outdated). I also expanded significantly on my original post to make my facts and reasoning as clear as possible to others here.

dooglius• 8 years ago

The first citation on that Wikipedia page [0] has been updated to an estimate of 4.16 billion internet users as of Dec 31, 2017.

[0] https://www.internetworldstats.com/stats.htm

cs7023• 8 years ago

Thanks. I'll update my figures right away.

mrep11• 8 years ago

From what I can tell (those sources are pretty vague), they include china where American tech companies are effectively banned and thus there population is not really relevant.

some_random• 8 years ago

If we assume the population of Internet users has a similar age distribution as the world's population

Well, this certainly isn't true.

And in any case, the people making these predictions are factoring in things like this, they didn't just slap down a linear regression line and call it a day.

cs7023• 8 years ago

Well, this certainly isn't true.

It depends on how those estimates of the world's Internet population are calculated -- e.g., from census and other household data. Is an African village of 47 with a dial-up connection counted as part of the world's Internet population? I don't know. Do you?

And in any case, the people making these predictions are factoring in things like this, they didn't just slap down a linear regression line and call it a day.

One would hope so, yet many are acting... surprised. As a headline put it, "Facebook’s forecast for the future looks suddenly bleak."[a]

[a] https://www.theverge.com/2018/7/26/17615330/facebook-earning...

noncoml3• 8 years ago

Your calculation doesn't make sense. You assume that the percentage of people below 14 that use the internet is the same as the percentage of people above 14 that do so

sytse• 8 years ago

A 1 year old is unlikely to be included in the internet user count.

thaumasiotes2• 8 years ago

Why would we assume that just because Facebook has a minimum age of 13, there are no 12-year-olds on Facebook? I, personally, would go pretty much the opposite way and assume that if a kid wants to be on Facebook, they will be, completely without regard to an official minimum age, and that therefore the minimum age is absolutely irrelevant to theoretical user count.

rdlecler1• 8 years ago

This is an estimate.

bobsil1• 8 years ago

i.e. market saturation.

aylmao9• 8 years ago

This is interesting. I would consider the number of maximum possible people who can have a Facebook account is probably closer to 3.07 billion - 772 million internet users in China [1], which means closer to 2.3 billion.

I doubt Facebook, at 2.23 billion users is that close to making all possible users MAUs (96.95% penetration? Yikes!), which makes me believe the age distribution of Internet users is different.

Counting bots, this moves to (2.23 billion - 270 million [2]) / 2.3 billion = ~85.22%. This is still very high, but interestingly closer to the number at which Facebook users maybe have stabilized in the US/Canada region. I wrote a comment on another thread about this (sources referenced are on the original comment):

"I can see the decline in Europe being unsettling, but I'm not really surprised about US/Canada. ~185 million is about 52% of the population of US/Canada. If we assume 35% of the population is simply too young to use it (20% under 14) or too old to be drawn to it (15% is over 65), that leaves only 13% of US/Canada's population which are feasible MAUs no being MAU, which is crazy." [3]

I'm guessing here that Facebook has reached 87% of possible users in the region, based on age as an approximation for internet/Facebook use. I wonder how far off these quick calculations are ¯\_(ツ)_/¯.

[1] https://www.statista.com/statistics/265140/number-of-interne... [2]: https://mashable.com/2017/11/02/facebook-phony-accounts-admi... [3]: https://news.ycombinator.com/item?id=17614830

randomsearch3• 8 years ago

You’re assuming each MAU is a unique person, which is obviously incorrect.

MAU is a bad stat anyway. DAU broken down into precise categories, with compensation for duplicate accounts, would be a great stat.

I don’t use Facebook for any serious time but there will probably be at least one time per month when I log in to look something up. I’m on the site for a few minutes at most.

If I did one google search per month would you care about it as a google investor?

The day my Mum told me that she had “decided to use Facebook less” due to their shitty behaviour was the day I decided Facebook were screwed.

What I’m fascinated by is what the endgame is for Facebook. It’s still useful in some sense, the world probably needs a Facebook. If it died it would be replaced by something else. So I think the most likely outcome is it will sit at some level where it’s hard for a competitor to dislodge it, but it doesn’t get used much and it doesn’t make much money.

untog4• 8 years ago

Interesting to note that this is currently #2 on HN, while a discussion about fake news/free speech on Facebook was immediately flagged off the home page as soon as it arrived:

https://news.ycombinator.com/item?id=17613810

I'd be curious to hear from those who flagged that Facebook story and not this one: why is that one inappropriate for HN and this one fine?

jmspring• 8 years ago

"Verified users should be able to post what ever they want" quoting someone from FB was a headline I recall flying by on multiple news sites today.

ageek123• 8 years ago

Because the thread you mentioned is about politics. Political discussion may be allowed on HN, but most people don't like them, as they're completely non-productive and just get everyone angry at each other.

untog4• 8 years ago

Seems silly to think that politics goes away if you just don't talk about it. Facebook recently had an entire ad campaign around reducing the toxicity on the platform - surely a discussion of that has a place when talking about earnings or lack thereof.

qubax4• 8 years ago

I'm guessing because the one about fake news/free speech is political activism/propaganda?

We've had nearly an entire year of that nonsense and I think most of us have grown tired of it already. Go to reddit if you enjoy propaganda.

I hope we don't go back to the time where half of HN is facebook nonsense pushed by god knows whom.

untog4• 8 years ago

What an absurd perspective. Talking about the toxicity that exists on Facebook's platform is "poltical activism", now? Or wait, sorry, "propaganda".

If you haven't heard anyone you know complaining about the crap they see on Facebook then you're living in a bubble. FB even launched an entire ad campaign trying to apologize to users for it. Any conversation about Facebook's performance is incomplete without discussing it, whether or not you wish to shut it down by labelling it "propaganda".

noncoml3• 8 years ago

IMHO it's big news signifying a possible end of an era. We reached peak FB. What's next? Is it going to implode as fast as it exploded, or is it going to be another tech dinosaur dying slowly?

The financial consequences will also be big. A lot of people have invested in FB, probably you too, through your 401k. Also imagine what will mean for the SF Bay Area a FB that is laying off or cutting down on expenses/compensation.

mrep11• 8 years ago

What's next?

Reddit maybe since they have been exploding in growth.

To me, it seems as though network effects are not as important as they seem as the businesses that rely most on them where fellow users provide all the content (myspace, facebook, twitter, snapchat, reddit...) rise and fall faster than any other company.

jsonne• 8 years ago

What's App, Instagram, Messenger, and VR all of which Facebook either own outright or are significantly invested in to win. IGTV is a shot across the bow at Youtube. Frankly I spoke with a VP at Facebook 3 years ago and he said they were looking away from "Big Blue" as the future then. This is a temporary at best setback. IMHO they're still the most dynamic tech company and they'll easily bounce back. I'm happy to buy some Facebook stock right now.

AzzieElbab• 8 years ago

Bots to the rescue?

hemantv4• 8 years ago

This company is the drug dealer of Silicon Valley. They have consciously destroyed a generation attention span using psychological tricks.

Hoping they start losing some of the good talent + the US implement something similar to GDPR.

Tloewald• 8 years ago

You should look into the career of B.J. Fogg.

https://www.bjfogg.com/

He literally teaches his students how to make psychologically addictive products and is proud of it (and rich). His disciples are the priests of "engagement".

giantsloth• 8 years ago

Reading his website makes him seem less like a master of anything serious and more a master at self aggrandizing douche baggery.

B=MAP reads much like any self helpy gimmick, something so obvious and so useless you somehow feel smart for having had your obvious thoughts on a topic reworded and handed back to you in corny new configuration you can share with your vapid fake friend group.

mancerayder3• 8 years ago

But surely they're not the only villains. It began with pop-up ads in the old days, evolving to that interstitial nightmare. Mobile notifications of almost anything, combined with a snaring in of people's attention using human weaknesses: need for attention and validation, frailty with regards to gossip, need to find a way to procrastinate during difficult times (work) and much more that I'm missing. It's time for some serious scholarship in the psychological arena in this direction.

hemantv4• 8 years ago

There is difference between passively consuming media for everyone.

Or I can create a special dose for you based upon your data that get you most high.

qubax4• 8 years ago

They have consciously destroyed a generation attention span using psychological tricks.

They did the same thing CNN, MTV and all media does. They do the same thing movies, music, tv, news, etc does. They do the same thing Google does, Twitter does, reddit does, snapchat does, like everyone does. What's with the organized and targeted hate towards facebook?

I'll make a bet with anyone here. Once FB gives in to the mob like google did, like twitter did or reddit did, I guarantee you the outrage will magically disappear like it did for google, twitter and reddit.

the US implement something similar to GDPR.

You want free speech curtailed in the US? You want more regulation of the internet? That's last thing you'd expect in a "hacker" news site. But like most social media, it's less tech people on tech forums and more political people with an axe to grind it seems.

hluska7• 8 years ago

How does GDPR curtail free speech? Please give me citations from the text.

colechristensen7• 8 years ago

Weren't people saying the same thing about MTV a generation ago?

byebyetech• 8 years ago

MTV was not watching you interactively. There was no data "dance" between your usage pattern and what shows MTV showed you. There was no Feedback Loop. This is much more sinister than passive consumption of media.

nashashmi• 8 years ago

MTV did its damage on the youth who are now all adults and totally different from the generation that preceded them. There is no telling in what ways minds have changed. If only someone were to do a research study on this.

But without it, it is difficult to say that damage did or didn't happen.

bogomipz3• 8 years ago

No, people were not saying the same thing about MTV a generation ago.

mrep11• 8 years ago

Drug dealer is way too much of an exageration in my opinion. Nicotine vaping is a better analogy I think.

While there have been some studies on the negatives of social media like nicotine vaping, it is not that bad as what we currently give people the choice to consume and I think we should swing even further towards more freedom of choice even if it negatively effects people long term.

ikeyany3• 8 years ago

They have people who's sole job is to make sure Facebook users are on the platform for as long as humanly possible. The company goes out of its way to subvert your desires to make it hard to leave (such as changing sorting by most recent so that you have no idea what content you've seen before). That's as close as you can get to being a pusher.

zjaffee• 8 years ago

To say that we should leave everything to simple choice is ignoring the realities of what groupthink has on a broader society. I.e. everyone smokes so it's fine and I should do it too.

I'm not saying we should make these sorts of things illegal, but to require the industry to display proper warnings, to actively give money to organizations that work against them (such as how tobacco companies must pay for anti smoking commercials), seems like a logical step forward.

dominotw• 8 years ago

If not Facebook they will go to Reddit, Twitter or watch reality TV .

sergiotapia3• 8 years ago

100%. A whole generation grown on dopamine addiction and fake relationships with people they don't know.

I hope they go down. Social networks were a net negative on the world at the end of the day.

hemantv4• 8 years ago

I think they add some positive value being able to be in touch with distant friends and relative.

But their business models depend upon getting people hooked up like a drug addict.

nostalgeek• 8 years ago

To me that award goes to Twitter, not Facebook. Facebook is actually useful to stay in touch with friends and family in a private fashion. Twitter on the other hand is constant pettiness, aggressiveness and bickering 24/7 from people looking for validation and internet points. The worst internet mobs came out of Twitter and my statement doesn't discriminate between political sides.

marcrosoft2• 8 years ago

I value privacy but GDPR is an overreaching government hand with consequences that you and I can't even imagine.

Edit: We'll pass a law that protects your privacy while we ourselves don't abide by it.

omeid23• 8 years ago

Please stop this fear mongering. The essence of GDPR is transparency and accountability. Is there anything else there that you're afraid of?

_cs2017_2• 8 years ago

Judgmental much? Who are you to speak on behalf of everyone, a whole generation? I personally have enjoyed using FB and Instagram. If you don't like it, don't use it. And don't tell me and other users that we are stupid or drug addicts.

toomuchtodo• 8 years ago

This is not being judgemental, this is factual based on scientific research (Facebook has even admitted as much).

You could Google “Facebook harmful effects research” for several pages of citations.

jnwatson• 8 years ago

Just like the opioid crisis, there is a point at which individual choices collectively impact society. I'm personally fine with someone shooting up in the privacy of their own home, but clearly something must be done when entire communities are affected.

Facebook has shown a willingness to provide my country's adversaries a powerful tool to subvert the foundations of its society. Fomenting racial strife and spreading pernicious rumors is just the start of it.

The country and the world would be a better place without Facebook.

tdb7893• 8 years ago

I think the issue with the "don't like it, don't use it" is that it's specifically designed to be addicting. It's hard to say they aren't complicit in the harm when they designed it to be harmful (being addicted to Facebook isn't the worst thing to be addicted to but it's still harmful).

sergiotapia3• 8 years ago

Here's a comment reply for your dopamine hit.

You are an addict, you just don't realize it.

kowdermeister• 8 years ago

My attention span was already weak before social networks. Could it be that they helped me train it to resist cheap tricks?

patrickg_zill• 8 years ago

As well, Facebook announced that they were going to set up a new incubator in China.

Then today or yesterday their permission to do so was yanked by Chinese authorities.

EDIT: https://www.zerohedge.com/news/2018-07-25/just-hours-after-a... summary of stories from NYT, Reuters, etc. on this matter

hemantv4• 8 years ago

I don't like the Chinese government at all. But at least there is a powerful force against stopping this company from infecting all of the humanity.

I just wish India would take a similar stand and then game over for Facebook.

nadim• 8 years ago

20p discount on FB today

mhh__• 8 years ago

Time to buy discount facebook stock?

le-mark• 8 years ago

I don't have the sense this is a bottom by any means. Certainly there will be a bounce but I expect to see long term decline (imo).

stevehawk2• 8 years ago

Completely anecdotal but I enjoy hating on facebook -

I created an account so I could create ads for my new business.. I have no idea what's going on but the only page it ever serves me is "sorry something went wrong." so clearly they're missing out on my $5/day ad budget.

SmellyGeekBoy6• 8 years ago

Their ad platform doesn't play nicely with ad blockers. Maybe that's the cause of your issues?

SamUK96• 8 years ago

Now that...would be ironic.

stevehawk2• 8 years ago

The ad creation tool is working fine. It's the "Page" I created. Can't view it, modify it, publish it, etc, i just get the error page. And because of that I can't launch an ad campaign.

chrischen• 8 years ago

If only facebook helped me achieve my goals rather than trying to manipulate me to give them attention with the lowest hanging fruit.

mtgx2• 8 years ago

When Facebook posted good returns and stock didn't drop right after Cambridge Analytica many were gloating about how that is "proof" that the privacy scandal didn't affect Facebook and that no privacy scandal will ever affect Facebook.

But they were simply not looking closely enough. And as I said back then, you need to give this sort of things time to see the real effects, like at least until the end of the year. Because I believe the worst is still ahead of Facebook. Facebook is now on a downwards path, and it's irreversible.

Facebook is now officially Blackberry. And just like with Blackberry before, many dismissed the fundamental issues of the company while blindly following the "record quarters" Blackberry kept having until 2009.

If they had just looked closely enough, they would've seen that BB's core North American market was on a steep decline path and it was also obvious that its phones were nowhere near as good as iPhones or Android phones.

Just look at what's happening to Facebook engagement. Ignore Facebook's sugarcoating. Look how the people around you are using Facebook and what they say about it.

aylmao9• 8 years ago

When Facebook posted good returns and stock didn't drop right after Cambridge Analytica many were gloating about how that is "proof" that the privacy scandal didn't affect Facebook and that no privacy scandal will ever affect Facebook.
But they were simply not looking closely enough. And as I said back then, you need to give this sort of things time to see the real effects, like at least until the end of the year.

I agree.

Because I believe the worst is still ahead of Facebook. Facebook is now on a downwards path, and it's irreversible.

I don't think I agree. Facebook still has many opportunities for user and revenue growth in Instagram and WhatsApp. As far as being irreversible, Microsoft was in a very dire position too and now it's having record-breaking quarters. It'll largely depend on leadership and direction.

Facebook is now officially Blackberry. And just like with Blackberry before, many dismissed the fundamental issues of the company while blindly following the "record quarters" Blackberry kept having until 2009.

One bad quarter doesn't make a company "officially Blackberry". IIRC, Blackberry didn't release it first touch-screen phone until 2013 (5 years after the iPhone) and it's first Android phone until 2015 (8 years after the iPhone). It was their stubbornness quarter after quarter, year after year that sank them-- they weren't dead the minute the iPhone was released just like Samsung wasn't. They should've just played smart and embraced Android/touchscreens from the get-go.

Will Facebook remain stubborn or will it gain trust back? I don't know. Calling it dead already is a huge oversimplification though.

Just look at what's happening to Facebook engagement. Ignore Facebook's sugarcoating. Look how the people around you are using Facebook and what they say about it.

The people around me are not an accurate sample of all Facebook users around the world. In my case, I see a lot of people using Facebook for Events and Marketplace. I see everyone on Instagram. The real data is in the numbers. Facebook's website falling behind Reddit is telling, but Instagram and WhatsApp surpassing Snapchat's stories also is ¯\_(ツ)_/¯

pbreit2• 8 years ago

Since GOOG had good earnings, safe to say this isn't reflective of broader market/economy?

noncoml3• 8 years ago

Wehner said a combination of currency headwinds, new privacy controls, and new experiences like Stories will contribute to the deceleration

I remember the day Chambers Saif Cisco hit an air pocket. Since then it has only been layoffs, cuts and austerity for Cisco. Never really recovered. Is it the same day for FB?

Cisco on Wednesday reported healthy profit and sales gains for its fiscal first quarter, in line with Wall Street expectations. But a host of challenges -- including losses in public sector accounts and in specific product areas like set-top boxes -- coupled with a less-than-invigorating sales forecast for the current quarter, were enough to send Cisco's shares tumbling.
Cisco CEO John Chambers, on Cisco's Q1 conference call, described the challenges as hitting an "air pocket," and was bullish on many of the areas in which Cisco excelled. But he set a subdued tone for the call, especially with the forecast that second quarter revenues would increase only about 3 to 5 percent, and a forecast that revenue growth for fiscal 2011 overall would be 9 to 12 percent, well below both the 13 percent for Q2 and the 13.1 percent for FY11 predicted by analysts.
Specifically, said Chambers, orders came in over $500 million below Cisco's initial Q1 sales forecast.

trhway• 8 years ago

that explains recent what looks like layoffs at FB. I was surprised to learn that several people in my extended network have been very recently and unexpectedly kicked out from FB.

ardy423• 8 years ago

Facebook can't be doing well: they're running ads on the New York Times app, trying to convince me to join.

And these aren't flattering ads either: they emphasize that I'd be joining "2 billion users" and that "it's free to sign up." They're bargain basement and have a desperate vibe.

anonytrary3• 8 years ago

I'm a young millennial and I'm sure that I'm suffering from a bias here* -- but I'm actually surprised they would need to take out ads in the NYT, given what their product is. I just find it so hard to believe that a significant number of people in the US haven't heard of Facebook or haven't any close friends who use Facebook. If the number wasn't significant, then I don't know why they would need to take out ads. Unless you've been living under a rock, if you're my age, then you have had more than enough time to figure out whether Facebook is your cup of tea.

*I am probably underestimating how many older folks are completely out-of-the-loop with Facebook.

aggie• 8 years ago

Many universally-recognized brands still advertise, because advertising isn't just about mere awareness of a product. It brings the product to mind and can continue to shape perception. The returns on advertising certainly diminish as you saturate awareness, but some level of maintenance is still worth doing.

orbifold• 8 years ago

They ran a full page ad this week in the FAZ the German equivalent of the NYT basically apologizing and promising to follow a new set of values.

mcbits• 8 years ago

It does make some sense considering the ideal user for an ad-supported business: Has money and either isn't savvy enough to block ads or, even better, ethically opposes blocking ads.

No offense intended to the previous commenter in particular, but statistically speaking, someone who reads stodgy news without an ad blocker in a subscription app on an expensive phone probably fits the profile. They may have heard of the company but haven't tried it, or they tried it in the past and just need the brand occasionally refreshed in their mind until they try it again.

simonswords82• 8 years ago

I get that big brands often advertise for pure brand awareness and associated reasons not necessarily tied directly to growth in new users or their bottom line.

This makes me wonder what it must be like being a marketing executive for Facebook at the moment. In advertising one usually promotes USPs and benefits to sell the product - in this case - a social media platform. The FB marketing execs must sit there thinking, how the fuck do we sell Facebook when everybody knows about Facebook, and most people know it's garbage?

This is especially true when you consider there's 7 billion or so people on the planet, and FB already has 28% of the total population using their app. They surely can't believe that they're one day going to have much more than their current market share?

I guess the 'free to sign' up and 'join 2 billion users' was the best they could manage given the circumstances.

I'd love to hear from a marketing exec at a big corp to understand their take on it. The idea of having to market Facebook at this stage in their lifecycle is very intriguing to me.

larkeith• 8 years ago

I suspect the most important thing for advertising Facebook at this point is ubiquitous visibility - if there is an FB ad, a share button, or a link to a profile on every page a user visits, it ensures that it is in their subconscious whenever they're browsing, making it that much more likely for them to log in to post or message a fleeting thought that would otherwise have passed forgotten. Similarly, non-users might be momentarily tempted by anything that brings to mind that friend they've not spoken with in years, or that interesting fan group that only has an FB profile, and having links to Facebook omnipresent across the web makes joining that much more likely by reducing the barrier to entry.

...most people know it's garbage

This is likely an exaggeration. While it may be true of the majority of HN readers, HN has a very specific demographic of generally tech- and business-aware people, who are much more exposed to damning data and discussion on the costs of FB - for most users, Facebook is a service somewhere on the scale of "useful" to "essential", with no readily apparent drawbacks; The rather negligible effect of the Cambridge Analytica media outcry serves to demonstrate the average valuation many put on privacy versus convenience.

...there's 7 billion or so people on the planet, and FB already has 28% of the total population using their app. They surely can't believe that they're one day going to have much more than their current market share?

At this point, I'm somewhat surprised FB hasn't started investing in Next Billion technologies; there's a limit to the portion of current smartphone users that are willing to join Facebook, so one solution may be to ensure more people have smartphone access.

athenot• 8 years ago

The FB marketing execs must sit there thinking, how the fuck do we sell Facebook when everybody knows about Facebook, and most people know it's garbage?

It's no different than Coca Cola or McDonalds. Everybody knows about them and most know it's garbage. The answer is to sell a feeling, a mental association, a lifestyle... at a subconscious level. That's the real power of advertisement. For well-established brands, it's also branding reinforcement: never let your mind forget about the brand, so that at the right time, you're predisposed to reflexively reach for it. Feeling hungry? Mc Donalds! Feeling thirsty? Coke! Feeling that dopamine need for social validation? Facebook!

beagle36• 8 years ago

I haven't logged into facebook in 6 months or so, and in the last couple of weeks, I've gotten about 5 emails a day about things my facebook "friends" just posted, and reminders to come back; The usual rate is about 2-3/week.

I assumed I wasn't personally targeted, and that it's part of a "increase monthly and daily now!" campaign FB is running. Seems like they had a good reason to try.

ardy423• 8 years ago

I assumed I wasn't personally targeted, and that it's part of a "increase monthly and daily now!" campaign FB is running. Seems like they had a good reason to try.

That kind of manipulative notification behavior has been around a long time. Whenever their algorithm detects you might be drifting off, they send you more and more needy notifications in order to tempt you back. Though, I wouldn't be surprised of they've cranked up the neediness level recently.

puranjay4• 8 years ago

They had TV ads in India. And ads targeted specifically at the rich, English-speaking, Netflix-watching upper-middle class.

Meaning they're losing this all-important audience

jhanschoo• 8 years ago

In my opinion, among all the tech behemoths, it is Amazon that has the best long-term (stock) prospects. Whereas most tech companies build their businesses on ephemeral software-based services, Amazon possesses logistics and infrastructure that are among the best in the world.

lawrenceyan• 8 years ago

JD.com has far better logistics and infrastructure. They also don't send you fake products when you order online as their guarantees seem to actually mean something unlike Amazon.

StudentStuff• 8 years ago

Seriously, a guy I know that works over at Amazon was horrified at the trash that Amazon Fresh delivered to his house both times he tried it. Rusty, leaking canned goods and a mix of average to damaged produce does not make one want to be a repeat customer, even if you want to support your own company.

JD.com with their heavily automated warehouses seems like they've eliminated a major cost center, it'll be curious to see if its just nearly fully automated to the press, or actually significantly better than Amazon/Ingram Micro & the other major human based warehouse wholesalers out there.

yotamoron2• 8 years ago

Faacebook is hugely overvalued. Its actual value for its users is far less then perceived. You can't fool all the people all the time, and the day will come that people will realize it. I'm all for social networks (and making good profit from operating them), they have a key role in democratizing the global society, its just that facebook is abusing our basic psychological needs to make money.

qubex2• 8 years ago

Since the Cambridge Analytica scandal broke I’ve disabled notifications on my phone and find myself pressing it perhaps 30 minutes a week rather than what was probably almost an hour a day. Even giving it half an hour of my time seems like a bit of a bad habit I should cut out. I never relied on it for news, ignored the ads, and generally really tried to use it exclusively to maintain the potential for contact with the diaspora of worldwide friends and acquaintances and their sometimes-shifting contact details.

SmellyGeekBoy6• 8 years ago

I deleted the app and just use the mobile website when I want to occasionally check what friends and family are up to. Much less of a distraction and battery life is much improved. I also started using Messenger Lite now instead of the full-blown Messenger.

That said, it seems very rare my friends or family actually post anything these days. Mostly I use it for a handful of specialist groups which could just as easily be replaced with forums.

samstave• 8 years ago

What I would really like to know, is the correlation between the FB IPO and the rental prices around the valley going up at the time.

Just prior to the FB IPO, I lived about two blocks from the then CIO or CTO of FB (cant recall his name - this was just as Asana was getting a lot of buzz as well) -- and I was looking for a new apartment in Noe Valley.

I recall that a place that I saw going for $3,000 per month took an immediate jump to $7,000 per month days after the IPO and they wanted a $10,000 security deposit...

Other rents went up as well.

My overall point being, that it sucks, but is interesting, to see how tech company IPOs impact overall COL - but when comments such as "FB is hugely overvalued" are made, and instances where FBs value drops - the damage to real COL has an impact radius thats already happened and far more reaching than simply to those who benefit/suffer from their personal stock holdings' value...

Its the reality of the world/market - but lets imagine FB ceasing to exist magically... COL/rents will not adjust accordingly.

So, while I don't personally care about FB's value - I am interested in how much the entirety of COL is affected by any tech success/failure throughout silicon valley...

How are these types of factors evaluated by economists?

collyw2• 8 years ago

Its difficult to give it up completely (without loosing something). I tried, but it is a useful place for contacts that you don't see often and are in different parts of the world. It stays current, which phone numbers and email address don't.

beagle36• 8 years ago

You lose something by using it too, you know -- you let FB track everything about you, and shape your world view if you read the posts they decide to show you. It's a tradeoff.

You don't have to delete it; Just make sure it is perfectly blocked (through uBlock Origin, Disconnect, Ghostery, PiHole, etc) so they can't track you - and login in once a month or so to https://mbasic.facebook.com/ if you need to figure out someone's new phone number.

brandon272• 8 years ago

I haven't deleted my account but I have reduced my Facebook usage by 90%+ by simply deleting the app from my phone.

flycaliguy• 8 years ago

I’m pretty sure Facebook can fool enough people forever.

tempodox• 8 years ago

You can't fool all the people all the time...

I suspect you can, with the equivalent of survivor bias. Those who can't be fooled don't have Facebook accounts.

Jsharm• 8 years ago

In Western society maybe but in emerging markets Facebook is still huge. And for many em small businesses it is their only online presence.

JumpCrisscross5• 8 years ago

In Western society maybe but in emerging markets Facebook is still huge

Americans and Canadians earn Facebook over 4x per user what Europeans do and over 10x what Asia Pacific users do [1]. Facebook's user base shifting overseas implies a massive revenue drop (and corresponding adjustment to value).

[1] https://www.statista.com/statistics/251328/facebooks-average...

puranjay4• 8 years ago

The trouble is that the people who are fooled by Facebook in emerging markets aren't likely to be a big source of profit for Facebook.

In India, for instance, Facebook is especially popular among old people like my parents, or poorer people. The former won't spent much money online because habit. The latter don't have much money to spend.

thinkingemote2• 8 years ago

I'm inclined to agree, but am reminded of the Dropbox Vs rsync post on HN. The value to me from it is okay groups family and friends. I can write a facebook clone which does all the things I like in a month or so, but that's kind of missing the point.

therealdrag0• 8 years ago

The market value is not value to users, it's value to advertisers.

slantaclaus• 8 years ago

P/E is in the thirties. I have to disagree here. Google has had a PE in the thirties since 2006

alismayilov2• 8 years ago

Facebook is very valuable in countries where press freedom is not good (if facebook is not blocked yet). My country (Azerbaijan) is one of the worst countries in terms of press freedom. The only “free press” we have is a facebook. There are many goverment’s trolls, but everybody understands when trolls write something (trolls get average salary). On the other hand, goverment follows oppositions’ discussions on facebook and responds accordingly. That is the only platform we have now goverment and oppositions speak with each other.

scandox• 8 years ago

Well at least your trolls are paid. A lot of our trolls seem to be volunteers.

spdionis• 8 years ago

Probably the volunteer ones are the most realistic and dangerous.

r00fus• 8 years ago

How certain are you that they're actually volunteers?

Astroturf seems to be a lot more lifelike these days.

TomK323• 8 years ago

Facebook is about looking at hot girls from your college, well, that's how it started out. It's a social network where you and your data are the product. It's not about free press.

To prove the point, in Myanmar the social network facebook has helped to spread hat speech that led to riots and violence between Buddhist and Moslims. https://www.wired.com/story/how-facebooks-rise-fueled-chaos-...

If you want free press, change the government, whether it's Azerbaijan or Malta, a better government is necessary.

alismayilov2• 8 years ago

If we act based on this logic, then we should not use internet today, because it started as a military project. Well the telephone was created as a tool to talk each other not to browse on the internet. We can add many examples that initial usage changed significantly.

lagadu2• 8 years ago

Just because it played a part in those events doesn't mean that it's not a tool for free press. One could argue that the fact that that speech wasn't able to be passed through traditional media is a point in favor of free speech, even if it resulted in violence.

onetimemanytime• 8 years ago

suggestion: post under a new username....they can make your life miserable.

2sk212• 8 years ago

One thing I have been wondering - how will they monetize WhatsApp?

jquast2• 8 years ago

Haven't they already monetized on WhatsApp? They've already been able to gather a massive amount of social graph data and personal details, phone number, location information.

If they made any amount of value on WhatsApp data, the users are never informed. I think the only way to really know is to join as an employee and find out what they do/did with it. The only thing we are aware of is advertising when we see it, everything else is nebulous.

2sk212• 8 years ago

Agreed - WhatsApp data is getting added to their social graph for sure. However, they have not yet made any attempt so far to, say, inject ads into chats or on the app itself. Despite their statement of end-to-end security, they still control the end points, so this kind of ad injection could be compatible.

tomaskafka• 8 years ago

They do. It's a data gathering platform for better ad targetting of people who don't know Whatsapp belongs to FB (= everyone minus few nerds)

JumpCrisscross5• 8 years ago

Deletion is too extreme for most people. More reasonable: escalating partial dis-engagement. Here's what my friends and I did, sequentially, over the years:

1. Turn off notifications for the Facebook app on your phone;

2. Turn off notifications for the Facebook Messenger, Instagram, et cetera apps on your phone;

3. Delete the Facebook app from your phone;

4. Delete the Facebook Messenger, Instagram, et cetera apps from your phone; and finally

5. Log out of Facebook on your desktop.

It took me 2 years to go through from step 1 to step 5. It has made me happier and more productive. I still have a Facebook account. But the friction of grabbing my laptop and logging in forces me to consider "is this what I want to do? Or am I thoughtlessly reaching for the crack pipe?"

bariswheel• 8 years ago

Turning off notifications for messenger ("We noticed notifications are off, would you like to turn it on? Yes/No), I kid you not, took at least 30 to 40 times as of a few months ago for it to stop bugging me to turn it back on. Few months before that, 25 times at least. Who knows what that number is now. That kind of engagement should be flat out illegal or regulated.

froindt3• 8 years ago

It has the same persistence if you haven't posted in awhile. I haven't posted a status in over a year, and the first few months I got countless notifications along the lines of "OMG YOU HAVEN'T POSTED IN ___ WEEKS! GET STARTED AGAIN".

Also, there's no reason for a "starter message" and prompt when I add a friend.

puranjay4• 8 years ago

I deleted my account a few weeks back.

I haven't missed a single thing.

I realized Facebook had become the digital equivalent of walking into the kitchen and opening the fridge. You know what's inside, but you still end up looking.

intrasight• 8 years ago

A close but not perfect analogy. Perhaps closer for me since with a spouse I may find something unexpected in the fridge.

secfirstmd2• 8 years ago

Deleting WhatsApp though would be very difficult. It's completely replaced SMS as the primary means of communication for every personal network I am part of.

froindt3• 8 years ago

I've done all the same steps over a number of years. One more item I'd add is that mbasic.facebook.com still allows you to get messages.

For no valid technical reason I'm aware of, they removed the ability to view messages in the standard mobile site. It used to work, and frankly it worked really well. But I'm sure the engagement and quantity of data they sucked up were orders of magnitude better with Facebook Messenger.

deepGem• 8 years ago

For me, it was the mobile interface interlaced with so many video ads that killed my usage. I do open the app sometimes to check what some of my distant friends post, but my usage has drastically gone down. I think 5 years back I spent at least 30 mins on the app every day, now I don't even open it on a few days. To top that, the Cambridge Analytica incident.

That said, I remain invested in FB, since my hypothesis was that 'a majority of people are not like me'. Looks like I am being proven wrong, but let's see the long term impact.

ashelmire3• 8 years ago

Deleted my account nearly a year ago. I don’t miss it at all. For the first few months, I definitely felt like I was missing out on things. But since then I’ve taken a bunch of classes, read a bunch of books, and enjoyed my other hobbies more. It’s hard to do that when wasting time on Facebook. Also I’ve avoided all the bullshit arguments and much of the debates with extremists on all sides of the political spectrum.

I want a social network that encourages human interaction in the real world - not one that turns friends into enemies, feeds narcissism, and provides a platform for corporations and hostile governments to spy on us and manipulate us. Facebook cannot and will not ever be that network.

iknowverylittle2• 8 years ago

I want a social network that encourages human interaction in the real world - not one that turns friends into enemies, feeds narcissism, and provides a platform for corporations and hostile governments to spy on us and manipulate us.

Well this is a site for startups. It seems like you have a good initial idea/problem and/or need. Now the next hard part is concieving and implementing a solution.

There's peer-to-peer networks already though I doubt any of them will be a Facebook replacement. It does provide a solution in part to the spying and data mining (obviously whatever you decide to put out there is free to be harvested).

So how do you encourage human interaction, perhaps meeting, and build constructive discussions?

Unfortunately I'm afraid some of that might just be choosing to predominantly interact with people that are also like that. Although a technologal solution would still be valuable.

izzydata• 8 years ago

Meetup.com is a thing. It worked the couple times I tried it.

magnetic• 8 years ago

Would you be willing to pay for it, and if so, how much per month?

briantmaurer• 8 years ago

For a long time I've wished more apps would focus on getting you to the real world as quickly as possible.

Now, I'm trying to do my part. I'm working on building Mutambo (https://www.mutambo.net) which is focused on helping everyone play recreational sports. To avoid becoming the Facebook for sports, a high priority goal of ours is to minimize the time you spend in app – to get you to your sporting events as efficiently as possible.

dalore• 8 years ago

Does Nextdoor count? It feels like it's trying to connect people in the real world that you know.

st1ck• 8 years ago

Facebook events is probably the best after meetup.com, and unlike meetup.com it's free to use. With Facebook it's more about the way you and your friends using it (except privacy concerns). I just unsubscribe from everyone except people/pages who post always on-topic and rarely. I get maybe 2 new posts a day in my FB feed.

I waste a lot more time and witness a lot more drama on HN than Facebook.

ralusek• 8 years ago

Dockit Calendar is an app I made, best version is on the iOS app store. It's a social calendar application, wouldn't mind your feedback if you're actually looking for a social network that encourages activities.

kulahan• 8 years ago

I decided to drop Facebook because I spent all day arguing with people that I cared about.

I decided I didn't want or need that in my life, so I've dropped it in favor of arguing with people I don't care about on Reddit instead. So much more time for Reddit now!

krtkush• 8 years ago

One single step for me -

1. Unsubscribe everyone's feed. This way when you open FB all you see is a blank feed.

Mvandenbergh• 8 years ago

I did 1 and 3, for 2 I've switched off audible notifications but not visual for the messenger apps. Unlike the others I actually feel that I get real value from those but that's because they're more inherently participatory than FB itself.

I only look at my phone to see if there are new messages a few times a day, usually right after I've done an email check (I don't keep an email client permanently available either unless I'm in a rare window when I have to be quickly reachable).

The few extra steps it takes me to log in on my laptop mean that I check FB two or three times a week - down from two-three times an hour. When I do use it, I usually scroll through invites (the only real reason that I wouldn't delete my account).

The gradual de-escalation works well because social media does have real value but it's a good idea to test what that value is against the attention costs it imposes.

grappler• 8 years ago

I've mostly done this but landed on still keeping a facebook tab on the laptop -- quarantined in its own container using the excellent Firefox Multi-Account Containers extension.

Most "friends" unfollowed except a handful of close people. Some less connected but more interesting people pop up in the feed for a bit but then get put back in 30 day snooze with their first new less-than-interesting post.

I won't interact with posts that are world-viewable, but might like or comment on some that are more restricted.

This brings it down to just one or two posts a day in my facebook tab. Something I can spend one or two minutes on in the morning or evening. I mostly see my sister's new baby, and that's fine :)

mancerayder3• 8 years ago

Easy to do steps 1-3 and 5, but 4 is a pre-requisite for single sign-on for a few popular 'meet other people' type of apps.

lainproliant• 8 years ago

The only regret I have about deleting my FB account is that I forgot it was attached to a mobile game account that my partner plays... when she lost her tablet, she lost the account and could no longer recover or login because the FB account attached to it was long gone. Oops.

lcedp• 8 years ago

Why your advice is only limited to Facebook products?

apexalpha• 8 years ago

Delete the apps. Use website for facebook and Messenger Lite if you must. These apps are the new sigarettes.

edw519• 8 years ago

  2007
  High school acquaintance: Join us on facebook!
  Me: What for? So you can treat me like shit like you did in high school?

  2008
  Cousin: Join us on facebook, so you can stay in touch.
  Me: Why don't you just tell me what's happening like you always have?
 Then we can shoot the shit and laugh and talk and gossip, just us two, like we always have?

  2009
  Neighbor: Why don't you join our community group on facebook so you can see what's going on?
  Me: I'll just pay my dues and spend my time on what's really important to me.

  2010
  Work associate: Why don't you work at facebook? Everywhere else is lame.
  Me: Because lots of other places are doing cool stuff that really matters.

  2011
  Friend: I can't believe you're still not on facebook. Everyone is!
  Me: Your 2 sentences contradict each other.

  2012
  Me: Why didn't you invite me to your wedding?
  Fraternity brother: Because you're not on facebook.
  Me: Lame. And classless.

  2013
  Sister-in-law: Your business cannot succeed unless it has a presence on facebook.
  Me: Really? I just had my best year ever.

  2014
  Local business: See what we're up to on facebook.
  Me: I just go somewhere with their own website.

  2015
  Me: Why didn't you answer my emails?
  Friend: Why didn't you just message me?
  Me: What's that?

  2016
  Work friend: How do you manage to get so damn much work done?
  Me: Because I'm not spending hours every day on facebook on my phone.
  I'm too busy building stuff.

  2017
  Business guru: A following on facebook is not nearly as effective as a good email list.
  There's too much noise for the signal.
  Me: You don't say?

  2018
  Almost everyone: What have we done?!?
  facebook is ruining everything!
  Our privacy is gone! How do we get off?
  Me: I get off every day. The old fashioned way.

deepaksurti• 8 years ago

Now when some one asks me why I am not on FB, I will just redirect to this :-). Thanks and I thank myself for having not wasted even a second on any Social NW site, not that I look down on others who do. To each his own, for me staying away helped and I profited!

fosco• 8 years ago

HN is a social networking site, it is the only one I use. but I am spending time reading these comments... and probably do not want tknow the total time per week I spend on this site, I might cry because my excuse of not having time to exercise could be wrong.

xtrimsky1234• 8 years ago

So you literally missed a wedding and probably lost some friends and you still think it was a good idea?

I mean I don't spend too much time on Facebook (I hate procrastinating so I'm limiting myself a lot). But it has been the most useful website I have used in the past 10 years. Yes more than Gmail or Github. It wasn't useful for work, but I'm still working hard even with facebook. I check it only in the bathroom.

Concerning privacy? Privacy is long gone. And I couldn't care less. And I knew that in 2010, no need for cambridge analytica scandal. I just only communicate as if everything was public. I don't mind if any employer sees my entire Facebook/Twitter history. I don't mind if the presidential candidates know what type of milk I drink. I don't mind the government can track where I am using GPS or cell tower triangulation. I am who I am, and I have nothing to hide.

adarsh_thampy2• 8 years ago

I deleted my Facebook account more than 2 years ago. Installed Instagram to test what the fuss was about. But uninstalled it in a day.

The thing that's still Facebook and major part of my life is WhatsApp. Chit chats, group discussions, and calls with family back home all happen through WhatsApp.

Couldn't transition to other apps because most people in my family and friends circle don't really care about privacy or data security. They prefer convenience.

Without them switching, it's going to be hard for me to switch.

sasper• 8 years ago

I've been happy as a clam to delete my Facebook and Instagram accounts over the last couple of years, and, like you, WhatsApp is a necessity. I spend 10+ months a year abroad, and WhatsApp has taken over as the default mode of communication. You don't ask for someone's phone number any more, you ask for their WhatsApp.

I wonder what it will take for WhatsApp to be dethroned? Perhaps a massive data leak, or proof that their e2e encryption has been knowingly compromised to gather data for Facebook advertising.

tapoxi• 8 years ago

Couldn't transition to other apps because most people in my family and friends circle don't really care about privacy or data security. They prefer convenience.

What's wrong with phone calls and SMS? Granted they're not more secure, but at least they're not Facebook. I don't know any WhatsApp users, so I'm unaware of the advantage.

SamuelAdams• 8 years ago

My social circles use it because it provides a consistent experience. Some have androids, and some have iPhones. When you have an all iPhone group chat, things work rather well. Liking different texts, animations, etc work well. But when you add a non-iPhone to the mix, the texts are sent sms-style, so you get messages that say "Sam liked X's comment!".

It's easier for everyone to use WhatsApp, because that platform provides a consistent experience. Also I can search messages in WhatsApp, I can't find this in iMessage.

adarsh_thampy2• 8 years ago

Phone calls need to be in real time while Whatsapp chat can be read when you are free. Group SMS does not work because I am not aware of such functionality in Android.

During group discussions (like say planning a trip), we often share screenshots/images of hotels and other services for groups to vote on. These things are not possible with SMS or calls.

In India, most people I know have stopped using SMS altogether. Even I have stopped looking at SMS mostly because all the SMS I get is either an OTP (10%), a transactional message (10%), or a marketing message/SPAM (80%).

The last time I sent someone a personal message (or someone sent me one) using SMS was probably 2 years ago.

tchaffee2• 8 years ago

I haven't seen anyone mention that the drop did not carry over into the regular daytime trading. Am I missing something or is this a non-story by now? I was actually looking forward to buying FB at a 20% discount, but it just did not happen at all during regular trading hours.

tchaffee2• 8 years ago

I was totally wrong. Not sure what happened. Maybe I was looking at charts before the market opened?

schnevets• 8 years ago

I'm seeing a lot of "I deleted and I don't even miss it" comments. I haven't deleted my account just yet, but I only check the news feed once a week.

Taking this anecdotal evidence into account, I wonder if it's just Facebook's core audience growing out of social media. Sure, Zuckerberg has a bazillion users, but his site started by selectively inviting college students in the early 00's. Those early adopters are now all in their 30s and have better things to do than gossip and post vanity shots all day. Maybe the older audience who joined the site later are losing interest because that core was less active.

And then there's the younger generation who actively avoid Facebook and stay connected through a massive spread of other apps/games/sites that are not outright social media outlets. Without a major pivot, this could be big trouble for FB.

let_var• 8 years ago

I deleted Facebook before deleting Facebook was cool. I'm sure there are few good benefits but drawbacks and ads dwarf them all.

One more thing - the last time when I met my school buddies back in my hometown, we had more things to share, discuss and appreciate. It really felt good and real. Previously this experience was diluted by constant barrage of FB feed, there was nothing new to share or discuss.

ElijahLynn• 8 years ago

I have kept my account for the reason that I meet people in real life and that is very valuable to me. I try not to use it for much else, but event discovery and human connections are important enough for me to keep the account.

timtas• 8 years ago

The social-media behemoth’s stock lost roughly one-fifth of its value.

That's one way to describe it. Another way is, Facebook's stock fell to where it was two months ago, which is 70% over what it was at the start of 2017.

I'm not saying that a large one-day drop is insignificant or isn't news. But to paint this as the bottom falling out is unwarranted.

Facebook stock drops more than 20% after revenue forecast misses

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