Note, the author of this piece has a long-standing grudge against Mark Zuckerberg.
Namely he thinks he co-founded Facebook, and filed lawsuits about it. Back in 2009 they were settled, and he has been a public critic of Zuckerberg since.
The big one is that he claims that Zuckerberg just ripped off his original code. He lost that one in court.
His opinions on Zuckerberg's personality are heavily flavored by that personal conflict.
Second, Facebook does not have a monopoly. Unfortunately for them, social networks are not that sticky. And they can only continue buying every up and coming social network for so long before they miss the critical one. (Perhaps Tik Tok will turn out to have been the one...)
And finally Facebook is not a Ponzi scheme. I think that they are overvalued. But not Ponzi.
I guess I'll be the contrarian here. The real customers of FB (aka advertisers) that I've asked all claim to get their money's worth from their ad spends and obviously they keep going back to the well rather than switching to somewhere else. Fake users and bots can't be spending fake money. So even if the claims about the raw number of users are grossly exaggerated, the performance metrics which actually matter (eg conversions per ad dollar) can't be fake. Therefore the company can't just be an elaborate scam.
Many Madoff investors praised Madoff for many years for the amazing returns they received. Many of them more than doubled their investments many times over. So Madoff cannot have been a scammer.
I don't think this analogy holds. In the Madoff example, returns were quite literally only on paper, as they were fabricated out of thin air.
As someone who runs ads on Facebook, I can tell you that we saw an immediate lift in revenue and profitability as soon as we started. Internally we actually believe Facebook is misattributing Facebook driven purchases to the low side, as various ad blocking tools like uBlock may be interfering with this attribution matching.
For the Madoff analogy to hold, Facebook would have be going to our site and making just enough purchases to convince us to continue to run ads on Facebook.
From the view of the business, I couldn't care less of how many fake accounts are on Facebook. As long as money in < money out, we're going to keep running ads on Facebook.
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Namely he thinks he co-founded Facebook, and filed lawsuits about it. Back in 2009 they were settled, and he has been a public critic of Zuckerberg since.
See https://www.adweek.com/digital/facebook-announces-settlement... for verification that there was a lawsuit that got settled. And see the end of the article for the fact that he still maintains that he was the original founder of Facebook.
His opinions on Zuckerberg's personality are heavily flavored by that personal conflict.
Second, Facebook does not have a monopoly. Unfortunately for them, social networks are not that sticky. And they can only continue buying every up and coming social network for so long before they miss the critical one. (Perhaps Tik Tok will turn out to have been the one...)
And finally Facebook is not a Ponzi scheme. I think that they are overvalued. But not Ponzi.
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As someone who runs ads on Facebook, I can tell you that we saw an immediate lift in revenue and profitability as soon as we started. Internally we actually believe Facebook is misattributing Facebook driven purchases to the low side, as various ad blocking tools like uBlock may be interfering with this attribution matching.
For the Madoff analogy to hold, Facebook would have be going to our site and making just enough purchases to convince us to continue to run ads on Facebook.
From the view of the business, I couldn't care less of how many fake accounts are on Facebook. As long as money in < money out, we're going to keep running ads on Facebook.
facebook's aggressive expansion into developing-nation markets is no accident:
https://www.theatlantic.com/technology/archive/2016/01/the-f...
Previously on HN: https://news.ycombinator.com/item?id=20507251
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