What is the future of Facebook?

Since the Cambridge Analytica scandal last year when Facebook gave direct access to a client list to Cambridge Analytica for political purpose, the demise of the platform has been announced every other day. Meanwhile the numbers did not support the assertion. (see Social Media trends in 2019 )

That was until last week when suddenly data from the UK showed a stark inflection. There has been an impact indeed! (see exodus-britons-abandon-facebook-usage-plummets )

How much? Difficult to say yet. The data is limited to the UK which for obvious reasons is the country where you expect the impact to be maximum since Cambridge Analytica was in the news for months. But the earlier example of MySpace shows that the Internet is fickle and the fall from grace can be swift.

At this stage, we should expect Facebook usage numbers to plateau over the coming months. Most developed markets are mature and unlikely to grow much. The company confirmed this point when they said that from now on they would focus on markets like India where the potential is in the hundreds of millions. (But the unit is people which means that the income will be in Rupiahs, not dollars or pounds!)

The scandal may be behind and it is likely that Facebook will be more careful now but the underlying principle of the "free" Internet remains the same: "When it's free, "you" are the product." and this is starting to be understood by more and more people.

This should not be a "problem" as such. The information that Facebook extracts from us is anonymized and provided to clients as cluster data so that companies can target "35 to 45 years old employees" for example, improving their targeting and hopefully the quality and relevance of the advertising we see on the platform.   
But targeting itself is a moving target which "more" data helps refine. How much more data do they need to do the job right? In reality, there is of course no limit to the amount of data you want to analyze and this is where new concerns about privacy arise. (see The end of privacy - How AI will destroy our privacy )



The exercise is fraught with risks as eventually you necessarily kill privacy. It is unavoidable as explained in the article above. When you are dealing with millions of information "points" about people, patterns start to emerge and these patterns can easily be analyzed with AI (Artificial Intelligence) and big data tools to give unique insight about individuals.... killing privacy.

This is what Steve Wozniak is telling us in a stark and direct way when advising people to close their Facebook accounts now! (see Apple Cofounder Steve Wozniak's Dire Warning: Delete Your Facebook Account Now )

Will people listen? Should they? It depends. For most people it doesn't matter. This is not an assessment but the lesson of 20 years of social media on the Internet. Short of a major scandal, most people simply do not care, and even then it is quickly forgotten. But as discussed above, big data is a moving target and its growth is not only relentless but exponential. So the question becomes, "When will people stop acquiescing quietly?"

Well, the answer from the UK is in and it seems to be, "Now, but slowly" As Facebook answered, it may not matter much since the company can easily outgrow in India (for example) whatever market share is lost in developed countries. But this presupposes that everyone is worth the same. This may be true of human beings as such but certainly not as ROI (return on investment)!

Could this be what we are starting to see now: Static numbers but lower profits? This is quite possible and in that case the future of Facebook may indeed be much less bright than the shares of the companies on NASDAQ indicate. We will see what comes out of the US market in the coming months.