Discover more from Margins by Ranjan Roy and Can Duruk
Facebook, The PR Firm
What happens when PR eats the world?
Hi! Can here. Today we talk about Facebook’s never-ending PR nightmare.
A couple weeks ago, I talked about the dual reality I seemed to be living in. In one, there's an America that's in shambles, with her back broken from unemployment and poverty and tiny virus, and another that seems to be awash in cash, with investors who are dying to pour millions of dollars to yet another tool for thought or a future of work idea.
I have received a couple of pieces of feedback on that piece. Obviously, having it called a miserablist diatribe was my crowning achievement. I mean, I enjoyed the not-so-subtle "Let them eat stocks!" vibe from telling people who are unemployed and can't put food on the table that they should be happy $SHOP is doing well, but you know, it is what it is. Haters gonna hate, and stonks will…stonk? Remember: This newsletter is not financial advice. For that, you have to go to Dave Portnoy's Twitter feed (again, which also is not financial advice).
Anyway, speaking of dual realities, let's dive into one of my favorite companies ever. Yep, Facebook.
How is Facebook doing?
The answer, again, depends on where you are looking at. On the one hand, they are doing better than ever. Alongside its frenemies, Microsoft, Google (never Alphabet!!), Amazon and Apple, the blue-app company's stock is one of the precious few that are not just going up and up, but almost carrying the entire stock market on its back. Seriously, it's doing great! SO GREAT! Rocketship emoji! Fire!
Yet, if you divert your gaze away from your Bloomberg terminal (or Robinhood app) for a second and look at the headlines surrounding the company, you'd think they are running with their hair on fire. I mean, this is just an assortment of headlines about Facebook from the last couple of weeks:
That is not great!
Pretty Crazy Idea
Look, at this point, it's not even worth mentioning that we owe to Facebook for Trump. People have made this point, the day after the election, Zuckerberg called it a "pretty crazy idea", but then even the Facebook executives had to come to terms with the reality their engagement-bolstering machine powered by (and for) ads is so powerful that it can infect millions of brains so effectively that it can hand over the nuclear codes to a reality TV-show star.
The other day, I saw on Twitter a leak from Facebook where the comms people were pleading to their coworkers to stop leaking to the press. The comms folks, in a weird form of irony, were so inundated with their moderation work that they had to ask people whose main task is to create more moderation work for the poorly paid and mentally traumatized people to please creating less work for them. In my view, Facebook should keep things on brand and promise to replace the comms people with AI tools to relieve them of their pain, but also keep things on even more brand and never actually do that and instead subject them to grueling work conditions!
My co-host Ranjan once talked about how Facebook's PR feels broken, and I think there was a bit of truth to that, at least at that point in time. However, I personally am thoroughly amused by how good at this company is coming up with buzzwords and cute phrases and have them not just absorb the energy from the news cycle but also inject them into popular culture, let alone Silicon Valley nomenclature.
Type Fast and Commit Typos
The Move Fast and Break Things was the first entrant, which obviously is a too-on-the-nose and extremely tired metaphor for the company's overall impact on the world, but that soon made its way to Move Fast with Stable Infra. There was the extremely-obnoxious Building Global Community phase, which really was a sequel to Making the World More Open and Connected and also is somewhat related to A Privacy-Focused Vision for Social Networking. I’m so tired. But then, during the great Cambridge Analytica Happening, we had the Not a Breach of Data, but Breach of Trust, a phrase actually coined by yours truly¹.
When Zuckerberg et al. started getting weary of its impact on journalism, it invented the term The Fifth Estate, and placed itself at the core of it to much critical acclaim. And more recently, the company declared itself the ever-so-righteous Not an Arbiter of Truth, so as not to hurt its oligarchic relationship, and also recently brushed over its endemic inability to moderate (as usual) as An Operational Mistake. We are done?
I am unclear what the explanation for having an Islamaphobic executive in its ranks in India will be, but a Zuckian mixture of "Lapse in Judgement" and "Diversity of Thought" seems likely. We’ll have to wait and see.
The Joke is on Us
One of the jokes² at Uber was that if things ever did not work out as a ridesharing app, we could just pivot to becoming a law or a consulting firm since we were so good at introducing ridesharing to many cities and finding creative ways to increase awareness and gain market share. The darker way to read the joke is that Uber is less of a tech company, but a financial entity composed to find regulatory arbitrage opportunities and suck the profits dry until it can find other sources of revenue. The joke is funny because it is true.
So, in that way, I read Facebook less as a tech company, but instead a communications one. Not a telecom communications, but more like a PR / marketing consultancy. There's nothing original about Facebook. It's a company that hires people to build others' ideas, and, more often than not, it does that better and faster than them too. And when it can't do that, it just buys them outright. There is a lot of building, but the ideas are outsourced. But what Facebook is really good at is actually doing all this while fighting what seems to be a never-ending, at least since 2016 or so, PR battle while not giving an inch.
With all the negative press around, you might think they are not doing a good job at avoiding criticism, but consider the alternative that they've been able to weather all this because they've been able to deflect the criticism and avoid scrutiny and accountability. I know this all sounds pretty unhinged right now, but, stay with me. This is a company who hires conservative politicians to its highest ranks in multiple countries, while maintaining a veneer of political neutrality. The same company pretends its not the arbiter of truth while employing tens of thousands of people to do exactly that. Ask yourselves: What has changed at Facebook?
Of course, there’s another way to reconcile the constant deluge of bad PR with a skyrocketing stock price. Maybe none of it really matters. Maybe it is that while the critics might have a point here and there, things are actually fine. That seems sort of plausible: if you have billions of users, a good chunk of them will be bad people, and they’ll do bad things. And, sure, obviously, Facebook also does a lot of good things for a lot of people too, like giving billions of people the ability to communicate freely, or providing marketing tools to especially small businesses all around the world. And sure, you can even have the tired, bad-faith "The media is just mad at Facebook because Facebook (and Google) ate their lunch" argument if you will.
At some point, though, the chickens do come home to roost and the seed of truth in that joke, that Uber is a law firm in disguise, reared its ugly head. When Uber’s preferred method of innovation, that is business model innovation (or regulatory innovation, fine!), proved more profitable than one of technological innovation, and the firm put that into hyperdrive by valorizing a culture of aggressiveness both externally and internally, things got really ugly really fast. So much so that even the CEO could not survive the blast coming from the collapsing of the two sides of the joke into one.
*in my most John Oliver voice* Cool
And, in that sense, Facebook's ability to receive this much bad press and its ability to still avoid any real accountability feel like a long running liability that will at some point come to a head. Something’s gotta give. Just like you can't merely look at a few charts on FT and say things are going better than ever in the US economy, you also can't look at Facebook's ARPU and P/E ratio and decide to stay the course while ignoring the headlines of real people suffering real damages. I get angry when people say “You are mad at Facebook because of Trump” as if that’s not a good enough reason.
And maybe some if it is on us. By now, we should know better than using a single metric to flatten the impact of one company, let alone that’s as big and wide as Facebook. Just like no high watermark on S&P 500 will bring back the hundreds of thousands killed by Covid-19, no amount of dividends paid by $FB will bring lessen the impact of Trump, or Q, or a genocide. The reality is not a two-dimensional spectrum from light to dark; the good in one axis does not make up for the bad in another.
At some point, the multi-dimensional reality will clash with the supposed two-dimensional narrative. The cute catchphrases and the sober speeches will no longer be able to act as the glue between what the company thinks it is, and what it really is. You can also wrap together so much PR ganache over what is a pile of turd. And who knows, maybe they are not even that good at that either. This, after all, is a company that once thought comparing itself to a chair was a good idea.
1: As the Cambridge Analytica crisis was unfolding, I was bothered by some reporting that called it a “data breach”. To me, it was clear what transpired happened with Facebooks’s knowledge, so it wasn’t a data breach, but Facebook breaching the trust of its users. A Facebook executive saw my tweet, and said he agreed and took the term to Zuck and co, who also liked it and decided to adopt it for the news cycle. And that was my contribution to The Discourse!
2: The executive who made this joke deeply regretted it later, I’ve been told.