Facebook, dammit, I wish I could quit you. I need to quit you.
When Facebook played fast and loose with my privacy settings, I stayed. My friends kept track of how to fix them, and I’m pretty good at keeping on top of such things myself.
When it got more and more obvious that Facebook’s news feed algorithm was engineered to make money, not keep me updated on people I cared about, I stayed. The benefit of staying in touch with friends and family outweighed the frustration of sometimes missing words-only messages while the site served me up yet another “inspirational” message forwarded by a business contact I barely knew, because it was a photo, and those grab attention better.
The unprecedented details the company gave to advertisers about our personal preferences didn’t turn me away, even though I’ve always been critical of advertising.(1)
I even applied to work for Facebook, knowing the company had fascinating data about online behavior to work with. Back in January I thought about deleting my profile, too. I felt like I was spending time on meaningless Facebook interactions that I should be spending talking on the phone with my family and friends. But I kept it open, because it wouldn’t do to delete my account while I sent in my resumé, right?
Facebook, you can delete my resumé now. Given how you manipulated your IPO, I won’t work for your company. And I’m going to delete my account.
I know Facebook isn’t the first company to exaggerate about its worth in an IPO. It probably isn’t the first to give privileged information about re-valuations about their stock to big investors and not small ones.
The reading I’ve been doing about the IPO showed Facebook at the moment it was perhaps deepest into the kind of ugly Wall Street culture I’m upset about. Some of it suggests that Facebook may have been engaging in even more practices that favor big corporations and screw small investors than the average company does at IPO.
Barry Ritholtz, a Washington Post columnist and author of Bailout Nation, notes that Facebook’s value has been slowly driven up over the last few years as they let a number of corporate investors in before the public offering. Ritholtz alleges that they’re playing fast and loose with their numbers about users and defections, ginning up more profit for themselves with the kind of machinations which have already caused two separate, destructive economic bubbles, dot com and housing, since I graduated from college.
I know high-frequency trades are endemic to the stock market by now; the out-of-control bot-driven trading that has been adding enough volatility to the stock market to outright crash it in a matter of minutes, and which may give an edge to those who can afford to be in on these pricey computer-driven systems (Financial Times, requires login, sorry), can’t be blamed on Facebook’s IPO, obviously.
But Facebook chose NASDAQ for their IPO, and Ritholtz, drawing on an analysis by market data provider Nanex, alleges that failures specific to NASDAQ made it a particularly bad choice of exchange. I have to admit I don’t fully understand the argument that NASDAQ is worse than NYSE, so I can’t totally buy it. The problem seems to be that when NASDAQ choked on high-frequency trades, its data somehow only ended up going to the high-frequency traders whose servers were co-located with (i.e. in the same physical place as) NASDAQ’s servers. Not entirely sure this can be blamed on Facebook.
Regardless, the fact that Facebook’s IPO was enough to cause some major system outages, exacerbated by robot trading, which had to be hand-fixed by the exchange, is just a reminder of how divorced all of this market crap is from human value and how subject these supposed indicators of economic health are to the whims of those who can afford to play this game.
And Facebook was perfectly happy to play a rigged game with sharks who think nothing of playing with economic instability. Ritholtz sums up his points in his Economonitor piece:
what we see are a series of bad decisions made by Facebook’s executives going back many years. The insiders got greedy, too clever by half, in how they used secondary markets. They picked a bad banker and an awful exchange.
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Reading Ritholtz’s piece set off a mental schism for me which suddenly just seemed intolerable. Just a day or so before I’d been chatting on Facebook with my little sister, who is pregnant, and worried she won’t have a job by the time the baby arrives. Why? Because the government can’t afford to pay biology majors like her to keep pests from killing Michigan’s trees.
And Facebook, which had just given the stock market a mild case of the fantods, was deriving its value from knowing that the link between Ariel and me is labeled “sister,” and that it can sell ads against the conversations we have about her baby.
The government can’t keep paying my sister because rich sociopaths like Facebook’s Wall Street friends and founders leave the country before they pay taxes, and lobby Congress to keep tax breaks for their buddies low.
If your corporate culture’s goal is to enrich only your wealthy friends, I don’t want any part of it. I don’t want to make your friends richer by telling you who my friends are and what we like to talk about. Facebook seems willing to go along with places like Morgan Stanley and NASDAQ which have already demonstrated they’re perfectly willing to make an ugly economy uglier — to lie, outright — to make the people they know richer.
What do we get in return? Slightly easier ways to do what we’d be doing even if the site didn’t exist. Facebook gets value which we generate, and uses that to attract investment money which could go to improving our communities instead. What do we get? A “like” button. “Like” buttons don’t fund afterschool programs.(2)
Facebook, you’ve built a tool to help me reach my friends online. But you are not my social network. You’re a big advertising company. Like most advertising companies, you help sell cheap crap that everyone thinks will make them happy, for a little while, but probably won’t solve any of their problems, while your bigwigs can pay to have all but the most superficial problems of human life taken care of for them.
If I’m going to engage in a social network, I want to do it to support my own family and friends. And other people in my community who need support. Facebook has been instrumental in helping me keep tabs on my former students from the South Bronx, unfortunately. I’ll need to work harder to keep track of when they’re going through depressive spells, or need help with their resumés.
What am I going to do instead? I give up. I honestly don’t know. Make use of my Google+ account for a change? How is that anymuch better? Google is also making money by reporting to advertisers on the links I follow. I’m less unhappy with them(3), but I’m not naïve enough to believe “Don’t be evil” is a business plan instead of a motto.
I still hear the warnings of law professor Eben Moglen echoing in my ears, about trusting the details of my social network to anyone outside that network. About the implications for my free speech, privacy, and liberty (which have also been noted by Steve Coll in the New Yorker).
I’d like to run my own little server for my community out of a little box plugged into the wall of my house, like Moglen said. Connect it to a network of other communities. It appeals to my homesteader instincts, my do-it-yourself instincts. The Internet used to be more like this, with people running servers out of their homes.(4)
I wish Diaspora was a real alternative that could support this (peace to poor Ilya), but one of my friends who codes for a living couldn’t even get it set up. I’m not convinced it can build a network that can support everyone who needs Facebook to make connecting online easy and frustration-free, like my grandmother and her sisters. I did like my community better when we gathered around blogs — I do like the time I spend on MetaFilter – but the barriers to sharing are higher there.
But I can go somewhere else, take my traffic elsewhere. I don’t have to give what power my social network has to the social network of Facebook executives.
If there was a moment to vote with our feet, if there was a moment to call bullshit, it would be now, when critique of Wall Street is in the public consciousness and Facebook has just shown its hand as just another Wall Street dealer. Facebook is not an eternal fact of life just because of its network effects, as fellow Hampshire alumn Mako Hill recently pointed out.
I’ve got 862 contacts on Facebook. I’m hoping some of you all will join me in sending Facebook a message, by deleting your accounts and cutting our social network off from Facebook’s. Because what Facebook gets out of our network, versus what we get out of Facebook, is incredibly unequal.
1. Here’s my guilty secret: ad models based on rich personal data intrigue me. Before I had a puppety political critique of ads, I had a critique of dumb ads, as a kid — ads which clumsily missed their target, or struck the wrong tone. In my naïvest secret heart of hearts I believe ads could really do what they purport to do, namely inform people about new products and services, if they were just able to target the right people. Personal-data-driven ads would be less likely to rely on crude stereotypes, and could keep people from the noise of products which don’t interest them.
3. Full disclosure: I received a Google Academic Research Grant to continue my dissertation in 2010; that grant has since run out. I generally see things differently when wearing my research hat, my end-user hat, and my hacker hat, though, and my feelings about Google in this case have more to do with their “openness” in the sense of engaging with open-source projects and sharing data; less about their own privacy challenges, which I still think they’re mostly handling better than Facebook.
4. My immediate response to Moglen calling for home-based servers was: how do we solve the spam/botnet problem if everyone’s running their own servers? Escalation in the botnet wars has left nothing smaller than an ISP equipped with the aggregative defenses needed to keep a server up and running, as my friends and I discovered some years back. Solutions can surely be developed, but they’re not there yet.
Note: Comments up to May 29th below refer to previous drafts of this piece; many have been considered as I have rewritten it.