Facebook at 20
This week, as Facebook turns 20, I’m in the US, working in Washington DC and New York between celebrating a wedding in San Francisco and an MIT reunion in Boston.
It’s funny to reflect on 20 years of Facebook while at a college reunion. Over the years, my usage of Facebook has ebbed and flowed, but my ties today with the college friends who I meet up with this weekend are, in part, thanks to Facebook. If you’re from my generation, I’d bet a significant portion of your social life has revolved around it, to varying degrees, since you joined. It’s an indelible part of all of our social histories – but what does the future hold?
Old friends
It was called “Thefacebook” when Mark Zuckerberg, a 19-year-old psychology and computer science student, launched a website on February 4, 2004, exclusively for Harvard students. Within months, it opened to other Ivy League schools and MIT, where I was studying.
I think it was in spring 2004, whilst in my freshman year, that I joined and, in typical Millennial fashion, my usage probably peaked in the years immediately before and after graduating college. It has since slowly declined to the point now where I’m, mostly, a passive consumer who adds to the network via a post or photo no more than once or twice a year.
That level of engagement sounds like bad news for a social network, but Meta’s results last week beat expectations. They also announced a dividend (like “mature” tech companies MSFT and Apple) and were rewarded with a huge bump in their stock price. But, given how early adopters like me aren’t really using the platform anymore, why does the market still have such confidence?
Innovations and acquisitions
A big reason for Facebook’s success to date, and why many believe its growth shows no signs of slowing, is its central role in shaping social media. The “gamification” of content, including the invention of the “Like” button, was such a seminal moment in the evolution of the internet that it’s hard to bet against the company that created it. Like Apple with hardware, many investors still think it would be foolish to bet against what Facebook will do next.
And Facebook isn’t just world-beating in its approach to tech. It’s also commercially and strategically savvy, with a lot of its growth coming from timely acquisitions. Instagram and WhatsApp were bargains, but, since 2004, Facebook has acquired a mix of 100 companies, often not just for data or tech, but for talent. This has ensured that as new social networks emerged (e.g. TikTok), they kept pace. The fact that so many of the smartest people in tech are in the Meta family is another reason why people believe it will be Facebook – or a new version of it – who shape the next phase of the internet’s development.
All about the algo
As the Economist highlighted this week, a lesser-discussed reason for Facebook’s ongoing social media dominance and why it has been able to stay ahead of competitors is the tweak it made to its newsfeed algorithm, largely in response to the arrival of TikTok.
Previously, newsfeeds were comprised of posts by a user’s friends or friends of friends. But, as a result of the switch-up, newsfeeds were suddenly filled with anything the algorithm thought the user might like, based on their browsing history. As a consequence, the influencer economy was born, with brands and power users creating endless content for the platform, which also started to nudge “regular” users (like me) towards being passive consumers of this content. Scrolling Facebook today is more like watching ADHD TV than reconnecting with old college friends.
Facebook isn’t really a “social network” anymore, but it remains an attention-capturing machine. Thus, a user’s time – the most precious commodity – is still being monetised and profited from.
The evolution of the user
As I was writing this piece, I checked my phone’s screen-time feature and found that I spend roughly one hour every day on social media apps. This surprised me considering my busy work schedule (I promise!) and how I’m a father of a 1-year-old. Proof (if more proof were needed) of how addictive these apps are.
Then, I got thinking about how so little of this time is spent being social and how the content I consume every day is rarely created by my friends or even contacts. The significant majority of what is capturing my attention, and that of billions of others, is a mix of topics created by third parties, power users and influencers (which, for me, of late, is heavy on toddler eating and sleeping tips!).
Facebook isn’t alone in moving away from social. LinkedIn feeds were dominated by user connections, with friends posting job updates etc. Today, they’re full of corporates advertising their services and influencers peddling self-help tips (most of which are of dubious quality!). These networks are larger than ever – and they’re evolving to maintain growth.
Facebook at 40?
So, the negative assumptions many made about Facebook, based on how college classmates are no longer adding, chatting and poking (remember that?), seem to have been premature.
Throughout history, the “attention economy” has been extraordinarily lucrative, even more so in today’s digital world. As social media giants continue to evolve, acquire and grow, it’s hard to see what will ever replace them.
And whilst it continues to make big money for Meta, who’s to say Facebook won’t still be the world’s biggest and most addictive social network come 2044? It will almost certainly look different. Perhaps the ‘social’ element will have been removed entirely. But whatever it is, investors still believe it will be printing returns.