Facebook's New Focus on Connections Neglects How It Makes Money
(Bloomberg) -- I spent the last couple of days at F8, Facebook's annual tent revival for developers. I've consistently found F8 to be the place where Facebook gives the clearest elucidation of how the company sees itself and what it wants to be. This year, Facebook set its renewed mission of connecting people, but this goal comes with a conundrum.
CEO Mark Zuckerberg and the rest of the leadership ranks stressed a refinement of Facebook's original mandate: to help people communicate and connect with family, friends, acquaintances, those with shared interests and other personal connections close and less so. "We have built and grown service after service that put people and our connections and our relationships at the center of the experience," Zuckerberg said in his kickoff speech on Tuesday.
At F8, all of Facebook's products were framed to highlight their part in this mission. Executives explained that the messaging apps WhatsApp and Messenger are for staying close to the handful of people users stay in touch with constantly. The main Facebook social network and Instagram have the goal of enabling communications with a wider circle of contacts. Facebook Groups is for uniting people with common interests, and the Oculus virtual reality headset was discussed as a technology to share experiences with people who are separated geographically. Zuckerberg even stressed Facebook's new dating service as a way for the company to help people find meaningful relationships.
I had two takeaways from Zuckerberg's honed mission statement. First, the Facebook co-founder sounded more confident and impassioned than I've ever heard him about Facebook's and technology's role in forging connections among people. And second, however inspiring it was, Zuckerberg's vision is in inherent conflict with Facebook's business.
Imagine in 1984 if AT&T enabled communications that helped friends, family, co-workers and acquaintances stay in touch as often as they liked but made money by interrupting those conversations with commercial messages for Nike shoes or the local coffee shop and helped those businesses find customers on the end of its phone lines. It sounds weird, but that's how Facebook makes money.
If Facebook is doubling down on its mission of forging and strengthening relationships among people who matter, where does that leave commercial entities like Nike, the local coffee shop or news outlets? They're part of Facebook, too, and ads from those types of organizations provide more than 98 percent of Facebook's revenue.
Some business interactions can certainly be part of meaningful personal relationships. David Marcus, the head of Messenger, gave an example this week of a Nike feature that lets sneaker fans view an augmented reality image of a newly released shoe, chat about it with friends and order it without leaving the Messenger app. A Facebook virtual reality executive talked about a way to order a kitchen mixer for a friend's housewarming gift, join her in VR to see how the appliance would look in her new home and catch up in (virtual) person.
But for the most part, commercial relationships don't seem to fit with Facebook's refined mission to bring people closer. That's also why Facebook changed the news feed to prioritize posts that generate rich interactions among people and to circulate fewer from commercial entities. Facebook is about people, and despite what Mitt Romney said, corporations are not people nor do they tend to forge meaningful personal relationships.
Chatting on Messenger with a retailer to help pick out the right blouse doesn't seem like a meaningful personal relationship. Seeing Facebook ads for oddball Wish products interspersed with baby photos from your co-worker doesn't seem as if it cements a personal connection. Watching Instagram videos from the "Good Morning America" anchors doesn't naturally forge stronger bonds among people.
And yet Facebook and its family of digital hangouts depend on a mix of people and commercial organizations commingling in these sometimes not-so-meaningful ways. That is the bedrock of Facebook's business. We've already seen this year, from controversies about Facebook's data-reliant ad-targeting system, that the foundations of Facebook are being questioned. The contrast between a Facebook built for people and the reality of business activity on Facebook introduces a direct conflict into the company's fundamental mission.
A version of this column originally appeared in Bloomberg's Fully Charged technology newsletter. You can sign up here.
To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net.
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