Is it too late to save Facebook? Setting the stage.

Jerry Bowles Profile picture for user jbowles November 19, 2018
A fresh round of embarrassing revelations and bad press has rocked Facebook. Can it survive? Should it? Your thoughts?

Mark Zuckerberg’s annus horribilis got much worse last week when the New York Times published a devastating investigative report on how Facebook’s two top executives--Zuckerberg and Sheryl Sandberg—first ignored and then tried to hide early warning signs that Russia was using the social network to attempt to disrupt the 2016 American election. Headlined Delay, Deny and Deflect: How Facebook’s Leaders Fought Through Crisis, the key (but, by no means, only) incriminating accusation from the article read:

…as evidence accumulated that Facebook’s power could also be exploited to disrupt elections, broadcast viral propaganda and inspire deadly campaigns of hate around the globe, Mr. Zuckerberg and Ms. Sandberg stumbled. Bent on growth, the pair ignored warning signs and then sought to conceal them from public view. At critical moments over the last three years, they were distracted by personal projects, and passed off security and policy decisions to subordinates, according to current and former executives.

The situation came to a head, according to the report, when—more than a year after Facebook’s top executives first learned about the Russian activity--Alex Stamos, the company’s then security chief, told the company’s Board of Directors that the social media giant had yet to contain the Russian attack and that Congressional and federal investigators were closing in on evidence that would implicate the company.

His heads-up led to a difficult appearance before the Board by COO Sandberg who sought to explain why a serious matter they thought had been taken care hadn’t been. She emerged from the meeting, summoned Stamos, and angrily accused him of “throwing us under the bus.”

Stamos, who is now a Hoover Fellow and adjunct professor at Stanford, confirmed the incident in his own op-ed piece in the Washington Post on November 17:

I told the board the difficult truth: I had no confidence that we’d found out everything the Russians were up to, and it was quite possible that things would get worse before we built the teams and invented the technology necessary to stop it. Sandberg — as reported in this past week’s New York Times investigation — felt blindsided by this. (She later apologized.)

Stamos added:

At the time, technology companies were so enamored with the utility of our own products and so focused on sophisticated attacks from U.S. adversaries such as Russia and China that we overlooked less advanced but still effective propaganda operations. After the election, and having provided our detailed findings to the FBI and special counsel Robert S. Mueller III, Facebook stuck to a public-communications strategy of minimization and denial. It was finally jettisoned in early 2018, but the damage to trust has been massive and will take years to repair.

Facebook responded to the Times article by denying that it was slow to investigate it at every turn:

We’ve acknowledged publicly on many occasions – including before Congress – that we were too slow to spot Russian interference on Facebook, as well as other misuse. But in the two years since the 2016 Presidential election, we’ve invested heavily in more people and better technology to improve safety and security on our services. While we still have a long way to go, we’re proud of the progress we have made in fighting misinformation, removing bad content and preventing foreign actors from manipulating our platform.

The statement seems disingenuous at best. The Times reported that not only did the company fail to adequately address the Russian crisis, it hired a particularly unsavory far-right opposition research firm called Definers to attack Facebook critics and gather dirt on senators in advance of Sheryl Sandburg’s appearance before the Senate Intelligence Committees. Said Senator Mark Warner, soon to be chairman of the panel, in a statement:

At the same time that Facebook was publicly professing their desire to work with the committee to address these issues, they were paying a political opposition research firm to privately attempt to undermine that same committee’s credibility. It’s very concerning.

Dealing with the fallout

The new round of negative publicity is certain to worsen the massive damage the company’s business and reputation have already suffered from its clumsy, tardy and totally inadequate response to the Russian disinformation campaign and the Cambridge Analytica scandal, as well withholding from oversight vital information on how the company was collecting and using information.

The number of Facebook subscribers fell for the first time in 2017 and 2018 is looking worse. Barely half of the company’s employees are optimistic about its prospects, down 32% from last year. The stock price hit a new low on Monday prompting CNBC stock analyst Jim Kramer to contend that Sandberg should resign or be ousted.

There have even been calls for ousting Zuckerberg. The state treasurers of Illinois, Rhode Island, Pennsylvania, and the comptroller of New York City joined a shareholder proposal previously filed by Trillium Asset Management in June to remove Zuckerberg as chairman of the company he co-founded.

That’s not going to happen because Zuckerberg’s share of the voting power totals 59.9%. Sandberg, on the other hand, looks like the fall gal designate.

The Intelligencer reported on Monday that Zuckerberg has told his top managers that he believes the company is now “at war” with regulators, angry users and investors. It was also reported that in a question-and-answer session with employees at Facebook’s headquarters in Palo Alto on Friday, he blasted the fresh round of critical news coverage as “bullshit.” Nice.

My take

The probability that Mark Zuckerberg is a sneaky slimeball will surprise few people. They made a movie about it: nerdy kid at Harvard “borrows” an idea from a couple of obnoxious wealthy twin brothers, agrees to build a website for them, stalls them long enough to hack into Harvard’s student files and download all the girls pictures and bios, and create for himself what is now the biggest social network in the world--while trying to screw over his best friend and co-founder in the process.

Borrowing a few tricks from Google, he then builds the most irresistible, addictive, voracious, lucrative, privacy-gobbling database monster on the planet luring billions of us into telling his company our deepest material desires which he sells for outsized profits to companies that want to know what we most want to buy. He assures us that he just wants to “connect the world” but, don’t be fooled, we are the product he’s selling.

When the regulators hit the fan, his company adopts a strategy of “deny, delay and deflect,” which is where we are today. Right now, Facebook looks like it is continuing to propose a continuation of its proposal that 'issues' be managed in a quasi self-regulating manner. The so-called Supreme Court of Facebook.

The impending weight of potential regulation has implications for all large-scale networks both commercial in the enterprise sense and social in the general sense. But it is getting dangerously late in the day for Facebook to get fixed either voluntarily or through state action.

This Tweet nicely sums up the status quo:

And yet…

I, along with billions of others, like Facebook. I get a lot of pleasure from reconnecting with people I know that I never see in real life. It is the most efficient way of staying in touch with old friends and interesting new people and reminding me in my dotage of the names of my neighbors and their kids. I enjoy having people like my charming photos and pithy remarks. In short, I am a Facebook addict of the kind that epitomizes Zuckerberg's mantra of connecting the world.

So, let’s do this. I’ll write another piece in a few days called something like “X ways to save Facebook.” Give me your thoughts and if they're safe for an informed audience then I’ll use them. Jerry[DOT]bowles [AT]gmail[DOT]com or leave a comment below.

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