PowerPoint Presentation
The Elusive Success of Facebooks Internet.orgAnd how easily the
social media leader might achieve it with a simple return to its
core principles, acknowledgement of consumer preferences, adherence
to open access, and dedication to its vows to users, investors and
regulatorsSunday February 7, 2016
Section I: Conclusions & Recommendations
Section II: Insights & Documentation1. Rhythm of the
Business2. Historical Context3. Future Growth
Section III: AppendicesTable of Contents
Conclusions&Recommendations
Conclusions & Recommendations
Conclusion: A less insular view helps Facebook align initiatives
to target audience needs
Facebooks actions suggest a willful and reckless abandon for
factual representations of its businessNews FeedMobile vs web
alignmentExplicit content (Porn)Child exploitation: zero attempt to
mitigate their exposure on Facebook (i.e.,
Scrapbook)Recommendation: Employ strategies that balance social
good and revenue and acknowledge for-profit status
Mark Zuckerbergs actions portend a willfulness to engage in
self-serving, hypocritical and unethical tacticsQuotes about
relevance, integrity and user preferencesMobile vs web
alignmentExplicit content (Porn)Child exploitation: Zero attempt to
mitigate their exposure on Facebook (i.e.,
Scrapbook)Recommendation: Accelerate good
Unsubstantiated ROI leaves investors and advertisers partly
complicit in those outcomesViewability (auto-roll video)Undesirable
placementsOut of geo/out of targetRecommendation: Adopt extant
industry metrics or persuade the industry on the merit of internal
metrics to compel its adoption of heretofore proprietary metrics
(without attempt to benefit from their use)
Conclusions & Recommendations
Historical ContextRhythm of the BusinessFuture & Growth
Insights & Documentation
Promises to bring the Internet to every mobile phone
(Seattle Times) First company with a trillion dollar
valuationLofty goals, praise and prospectingThat companyHistorical
Context
And it is nothing newInfoSpace(circa 2001)
Rhythm of the Business
Rhythm of the Business
At least 80 percent of humanity lives on less than $10 a day
26%1.925 Billion kids underage 13135 million of them orphans
40 million illiterate
60% of those are girls
KIDS UNDER AGE 13
MINMAX
26%1.925 Billion135 million of them orphans
40 million illiterate
60% are girls
50%3.10 Billion earn < $2.50 per day1-in-6 (18%) live on less
than $1.25 per day
1-in-6 Americans will go hungry today
MINMAX
MINMAX
21%60% of illiterates are women93 million Americans have basic
or no illiteracy
KIDS UNDER AGE 13
Facebook prioritizes profits over food & water, the ability
to read and personal dignity for billions of women & childrenWW
POPULATION < $2.50 / DAYGLOBAL ILLITERACY RATE
Junior marketers assigned initiallyMost companies have the same
personnel
Budgets ramp, same personnel running programsMobile vs web
alignmentExplicit content (Porn)Child exploitation: Zero attempt to
mitigate their exposure on Facebook (i.e., Scrapbook)
Return on investmentViewability (auto-roll video)Undesirable
placementsOut of geo/out of target
Social Media 2.0 results in market response to social hype
106 billion people ever lived on earth7.4 billion now
1.5 billion people ever used Facebook1.5 billion now
Therefore, Facebook population will exceed:Global
populationInvestors and other stakeholders must question the
veracity of claims by marketers, including Facebook
NABill Gates
NAWarren Buffett
NABezosTo end poverty (not including utilities)UN Estimate
True altruism could eradicate global poverty rather than
attaining a higher rank on the global wealth
rankingsNAZuckerberg
Half the 4 billion people offline are under age 14; Scrapbook
attempts to circumvent US law and capitalize on insufficient
international laws
The Artifice of Like: Zuckerberg credits coding for Facebook
success (InfoSpace failed to bring the Internet to every phone or
achieve $1T valuation)
Market objectivity lists Facebook as philanthropy despite
revenues, strategies and CEO personal wealth
Billionaires challenge: reallocate 0.1% of your keep 99% of your
wealth and devote 0.1Total global wealth (personal) = $250
trillionTop 1% own $125 trillion1998 United Nations Estimate = $40
billionTo lift 3 billion people out of severe poverty ($2.50/day)
including:EducateSanitized waterNutritionHealth care
2015 Adjustment = $58 billion
Billionaires challenge: reallocate 0.1% of your keep 99% of your
wealth and devote 0.1
[Domestic growth is declining but in developing countries] weve
achieved promising results made it easier for people to register
for data plans and get a loan for their plan.Nigerias population
will explode from 183M to 800M of the worlds poorest in the next
three decades.
(Facebook Q2 10Q: Some of our metrics [are] affected by
applications on mobile devices that automatically contact our
servers for regular updates with no user actions involved, and this
activity can cause system to count the user associated with such a
device as an active user on the day such contact occurs. The impact
of this automatic activity on our metrics varies by geography
because mobile usage varies in different regions of the world. In
addition, our data regarding the geographic location of our users
is estimated based on a number of factors, such as the user's IP
address and self-disclosed location.
$780 Billion (2009) McKinsey & Company estimate of value of
search - to $1 Trillion in 2017
David Goldberg Business Insider article from April 17, 2015 two
weeks before he met his untimely demise
Facebook has no incentive to be forthcoming on quarterly
calls
Facebooks Global Economic Impact (Deloitte LLP, February
2015
Facebook growth primarily in India & developing world
Africa and India are principle Facebook growth targets through
2050
India represents significant accretive revenue potential and
near-zero political pushback
Longer term, Nigeria and other central-African markets embody
Facebooks growth strategy
[Domestic growth is declining but in developing countries] weve
achieved promising results made it easier for people to register
for data plans and get a loan for their plan.
Nigerias population will explode from 183M to 800M of the worlds
poorest in the next three decades.
(Facebook Q2 10Q: Some of our metrics [are] affected by
applications on mobile devices that automatically contact our
servers for regular updates with no user actions involved, and this
activity can cause system to count the user associated with such a
device as an active user on the day such contact occurs. The impact
of this automatic activity on our metrics varies by geography
because mobile usage varies in different regions of the world. In
addition, our data regarding the geographic location of our users
is estimated based on a number of factors, such as the user's IP
address and self-disclosed location.
Facebooks active user accounts (30 day sample randomized for
seasonality, day-of-the-week, and day-parted)
Maslows Hierarchy provides the foundation for prioritizing
initiatives and ensuring ethical outcomes, meeting real needs and
upholding basic human truths
Self-worth and ability to project beliefs to othersConnectedness
and social inclusion, commitment from others(External) personal
safety, financial, health & wellnessMetabolic (air, food,
water) & personal protection (clothing & shelter).
Realizing ones personal potential and extending it to others
through learning and mentorshipPHYSIOLOGICAL
(SAFETY)SECURITYLOVE/BELONGINGSELF-ACTUALIZATIONSELF-ESTEEM
26
Free basics can be very costly to a family previously surviving
on $2.50/day
In the Philippines, [we] made it easier [for poor people] to
register for a data plan and get a loan [to pay for] their
plan.
https://www.youtube.com/watch?v=kZTvbCj5U-4&feature=youtu.beWe
can do without the Facebook and the smartphones. We cannot live
without relieving ourselves
Water and sanitation are Indias two greatest needs
In 2013, conditions worsened as Indias 30+ ultra-wealthy drowned
30,000 & sank Indias hydropower infrastructure
SANDPR video Flood Ravage and the Dams of Uttarakhand, narrated
by Valli Biranda
Subjecting those earning $2.50/day, the price of
29
First-world fixes create empathy in Silicon Valley and outrage
those surviving in the developing world
SANDPR video Flood Ravage and the Dams of Uttarakhand, narrated
by Valli BirandaSubjecting those earning $2.50/day, the price
of
30
Needs worsened by Indias 30+ ultra-wealthy, as floods drown
30,000 & destroy Indias hydropower plans
SANDPR video Flood Ravage and the Dams of Uttarakhand, narrated
by Valli Biranda
In my last paper, I outlineda plan to deliver basic internet
servicesto everyone... ~ Mark Zuckerberg Internet.org Whitepaper:
Connecting the World from the Sky
Scrapbook is a growth toolCircumvents MZ position about two
identities showing lack of integrityCreating a public persona or
profile that person cannot erase or deleteWhen user grows up, they
create a new profileScrapbook, innovative way to get around
COPPA/CIPA especially internationally (no US laws)
Relevance is the hallmark of search results must reflect it
Advertisers brand is not covetedSearch exceptions not applied on
FacebookExample: PornDeceased users profiles
Video ad pre-rollNo metrics can be tied to itDeceased users
profilesClick bait = SMBs used to get tier-1 advertisers on
boardRelevance is the hallmark of search results must reflect
it
Facebook often beats predictions - using proprietary
dataCatholic priests said they didnt molest children
Police say they can police themselves
Facebook changes terms of service after reaching critical
massConsumersPublisher partners (Instant Articles)Advertisers Phase
1 advertisers = click bait the site vowed to rid the site of in
2012-2013
Historical Context
Historical Context
Facebook often beats predictions - using proprietary data2
Trillion video views: Every active user must view 3 videos every
single day of the year.
Nielsen (partner in 2016) just thrown under bus by Facebook
Reach of 40 million peopleHype: not targeting effectivenessPorn
pages?What are benchmarks?
Facebook no longer the global leader in audience reach
General QuestionsFacebook For Every Phone = 520 Million fans?Who
would do that and why?
Search for Jeff Weiner (CEO of LinkedIn) on Facebook
Search for Porn on FacebookPretty Easy to cull a sample and
estimate number of fraudulent sites etc.
The Confidence Huckster & General observationsFacebook
growth strategies:Like Button DuplicityChange agent
Trojan Horse: the Like button was implanted web-wide and
innocuously
Once traffic reaches critical mass, change the termsPublishing
partners: Instant articles
Consumers: change privacy policy but assert ownership
Advertisers: use click bait to dupe consumers until Tier-1
advertisers come on boardThen divorce them again
Porn and other policed content are rampant on Facebook, despite
the companys publicized policing of issues such as real names (note
drag queen controversy does not translate to movie stars)
Examples:Thomas Mopather (Tom Cruise)
Lou Alcinder (Kareem-Abdul Jabbar)
Leslie Townes (Bob Hope)
Revenue and not authenticity are principle determinants of
Facebook policy and decision makingFact: drag queens represent more
accretive revenue potential than their non-celebrity
counterparts
Hollywood celebrity personalities and names never questioned
Thomas Mopather (Tom Cruise)
Lou Alcinder (Kareem-Abdul Jabbar)
Leslie Townes (Bob Hope)
(Facebook Q2 10Q: Some of our metrics [are] affected by
applications on mobile devices that automatically contact our
servers for regular updates with no user actions involved, and this
activity can causesystem to count the user associated with such a
device as an active user on the day such contact occurs. The impact
of this automatic activity on our metrics varies by geography
because mobile usage varies in different regions of the world. In
addition, our data regarding the geographic location of our users
is estimated based on a number of factors, such as the user's IP
address and self-disclosed location.
Facebook focuses much energy on hyperbolic claims,
misrepresentation of facts and gamification
rather than focusing on
Facebook spending millions to trumpet value and misrepresent
facts
StudyTopic AreaSponsor (method)DateThe State of Global
Connectivity
https://fbnewsroomus.files.wordpress.com/2015/02/state-of-connectivity_3.pdfGlobal
Internet accessFacebook (synthesized sources & metrics)Feb,
2015Offline and Falling
Behindhttp://www.mckinsey.com/insights/high_tech_telecoms_internet/offline_and_falling_behind_barriers_to_internet_adoptionThe
offline populationMcKinsey & Company (sponsor,
Facebook)2013Connecting the World From The Sky
(https://fbcdn-dragon-a.akamaihd.net/hphotos-ak-ash3/t39.2365-6/851574_611544752265540_1262758947_n.pdf)Future
technologies & global Internet accessFacebook2014The Global
Economic Impact of Facebook
(http://bit.ly/deloitte_Facebook_economic_impact)Facebook intrinsic
value to the global economyDeloitte (sponsor, Facebook)2014The
Evolving Role of News on Twitter and Facebook
(http://bit.ly/Pew_News_on_TWIT_FB)News & Media, Internet Pew
Research Center, Journalism & Media (sponsor, Facebook)June,
2015Cisco Visual Networking Index 2015
(http://bit.ly/cisco_visual_networking_index_2015)Global Internet
accessCisco SystemsMay, 2015
Having two identities for yourself is arkan example of a lack of
integrity. ~ Mark Zuckerberg
(
It openly dispells misinformation: - In reality, 45% of people
age ALL PEOPLE ARE online, not 33% as claimed on Internet.org- 59%
of those age 14+ - and legally marketed to are onlineMark linked
his fathers dental patient records and networked computers (without
permission):Unethical: judged other peoples looks with an knock-off
of Hot or Not app (without consent for photos used)Attempted to
exclude other founders from Facebook windfallDuplicitous: testing
Top Stories/Most Recent & new ad types without user consentDoes
Mark Zuckerbergs prophetic statement portend disingenuous and
duplicitous initiatives for selfish gains?
In the Philippines, we
register for a data plan,
for their plan.~ Mark Zuckerberg Regardless the impact to the
welfare of others, which it vociferously pretends to protectand to
make it easier for people to get a loan
Facebook is not relevant to people who cannot eat, have no
electricity and cannot afford the phone
Two identities of Facebook: one misleads with proprietary (and
unsubstantiated) metrics, the other (Internet.org) misleads with a
barrage of 3-5 year old
statisticshttps://fbcdn-dragon-a.akamaihd.net/hphotos-ak-ash3/t39.2365-6/851574_611544752265540_1262758947_n.pdf
Half the worlds population (3.7 billion) lives in APAC/ SE
AsiaWomen are 40% more likely to be offline in developing
countriesCulture prevents access: more phones/apps will not change
dynamicCreating public access is the only way to ensure women can
getMax Fishers heat map of global income aligns perfectly with
network speeds globallyChildren: represent 26% of the global
populationFastest growth among developing countries up to
45%Reportedly 20% of kids age 0-9
Consistent with Ciscos Annual Study
http://www.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip-next-generation-network/white_paper_c11-481360.html
Facebooks growth depends on creating it in areas where people
earn under $2.50 per
dayhttps://fbcdn-dragon-a.akamaihd.net/hphotos-ak-ash3/t39.2365-6/851574_611544752265540_1262758947_n.pdfLocation,
income, gender and desire are primary barriers to Internet access
and children ages 0-9 (~20%)
Eight years of Facebook user requests, Stop asking our
preferences then superseding them with profit-maximizing
outcomes
RATIONALE: it is easier to control the algorithm for top
stories. There is no context or time to alter it if the user
selects Most Recent which they do do keep it relevant. For many
consumers youve just rendered their news feed uselessThe 8-seconds
it takes for a page to load a web page loading on a mobile device
in Rwanda.. That 8 seconds was just used to wow your advertising
team on the sites stickinessSub-saharan Africa constitutes the
greatest growth and the greatest barriersContent scraping without
context results in advertising products just bought (i.e.,
Nordstrom and AG Jeans (Papaya)
0
9
1
5
2
3
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CONTEXT IS KING: Without it, we MUST ask questions, not just
assume the provider is objective
Publisher traffic free-fall May 1, 2015Was it accidental or was
it a warning
Example: National Geographic has 900k subscribers yet 37 Million
fans on Facebook
Clicking link within the article affected status on Facebook
Liking one photograph online by NatGeo or otherwise is not being
a fan
Need clear rules/laws on what the like button does
Damage may already be done: Facebook has its claims
CONTEXT IS KING: What is the net ROI on advertising on profiles
of deceased users?Advertising on the profiles of deceased users is
akin to tagging their headstones in a cemeteryDavid Goldbergs
profile page has been removedAll content too?June 4, contacted
Sheryl Sandberg June 4, 2015 the day after her tribute to her late
husband, who died May 1, 2015Business Insider article April 17,
2015 suggests he did not agree with Facebooks taking advantage of
every Late partner could not have liked NatGeo pic
General Questions & ObservationsFacebookForEveryPhone app
amassed 520 Million legitimate fans?Who would do that and why?
Search for Porn on FacebookPretty Easy to cull a sample and
estimate number of fraudulent sites etc.
How do glaring infractions of Facebooks lauded single profile
policy continue unaddressed? See Jeff Weiners dual Facebook
profiles
General Questions & ObservationsSearch for Buy Facebook
Likes on Facebook or on LinkedIn
Facebook:Unwilling to listen to people desires, needs or
preferencesAmbivalent toward broader social issues, particularly
those with global implicationsSteadfast in its strategic
development of initiatives that exploit young, female and
impoverished populationsArrogant in dealings with users and
regulators
Appendix
General Questions & ObservationsSearch for Buy Facebook
Likes on Facebook or on LinkedIn
Facebook:Unwilling to listen to people desires, needs or
preferencesAmbivalent toward broader social issues, particularly
those with global implicationsSteadfast in its strategic
development of initiatives that exploit young, female and
impoverished populationsArrogant in dealings with users and
regulators
For considerably less than the cost of:
McKinsey & Co Report
Deloitte Facebooks Economic Impact report
Pew Family Trust News research study, sponsored by Facebook
Ciscos 2014 NetworkingMethodology to discover user-base
insights: random sample, long timeframe, hand query several subsets
of the data
The ultimate self-fulfilling prophecyInfoSpace (1996
2012)Facebook (2004 - ???)Market Perceptionpromise to bring the
Internet to everyones mobile phone Seattle
TimesFacebookonEveryPhone campaign (#1 Social Influencer with 513
Million Fans(on Fanpagelist.com)Promise/Market Conjecture[first
company with a] trillion dollar value (CEO Naveen Jain)Attempting
to supplant Google as the global search leader and aggregator or
access point to the worlds contentPrimary strategiesBlatant lies
DeceptionDuplicityTwo platforms driving different claimsGlobal
leader, users/revenueAltruistic do-gooderPrimary
TargetSEC/FTC/FCCAdvertisers/ Publishers/Consumers/
GovernmentOutcomeWent from Internet darling with $31B market cap
(bigger than Boeing) to penny stock in less than 1 year (2002)Based
on Q3 and softballs from investors, clear blue skies
aheadObservationsInfoSpace, AOL/Time Warner/ MCIWorldcomm and Henry
Blodgett (Business Insider) inspired a new round of leadersFacebook
seems nervous - spaghetti on wall
Given other verified data, Facebook claims of global reach
appear inflated and discount/dismiss known facts
Cost of phone and plan mean prepaid rule globally
Facebook & Internet.org do not ameliorate these issuesIt
raises awareness to provide a self-serving solution
Other local companies are solving these issuesFacebook
acknowledges it doesnt create the solutions it leverages them
Gaming the system and Internet.org live chat with a team member
never seen on Facebook
Misleading claims and investors is painful reminder of 2001, for
anyone who was invested in other duplicitous playersGaming the
system and Internet.org live chat with a team member never seen on
FacebookMotive and accessibility
eComm/m-Comm: Facebook does not provide the same solutions users
need in those cultures
Older segments grow as birth rates slow
Africa and India are principle growth areas through 2050
Working age people are 1:1 with dependents in developed
countries better in developing countries
In 2050, USA near equilibrium, balancing older and younger
dependents
Developed countries lead in global aged populations
CONTEXT IS KING BUT IS DIFFICULT
Context, misrepresented by publishers
Facebook willfully misrepresents many facts across its
storylines
What if we coordinate technology and physical manpower to help
people half a world away?
Each device offers discreet value propositions (size of images,
audio)
Facebook routinely accusatory of others for attempting to game
the system yet who stands to gain most by gaming of its
unprecedented Internet.org hosted chat feature?
Correctly anticipated Google+ surpassing of Facebook in global
reach
Facebooks Q4 2015 10-K SEC Filing
Facebook and Internet.org properties use different metrics
concurrently to affect different storylines
LinkedIn represents a breeding ground for known Facebook fraud
schemes
Sponsored ads appearing on profile of deceased user, 5 years
after his death
Notifications sent to inactive and deactivated accounts,
received 3 years after requests to close
Correctly anticipated Google+ surpassing of Facebook for global
reach
Each device offers discreet value propositions (size of images,
audio)
Thefacebook is an online directory that connects people through
social networks at colleges [Harvard only][2004]Thefacebook is an
online directory that connects people through social networks at
colleges [Limited to your own College or University][2004]The
Facebook is an online directory that connects people through social
networks at schools [Now there are two Facebooks: one for people in
college and one for people in high school] [2005]Facebook is an
online directory that connects people through social networks at
schools [2006]Facebook is a social utility that connects you with
the people around you [Facebook is made up of lots of separate
networks things like schools, companies, and regions]
[2006]Facebook is a social utility that connects you with the
people around you. [upload photos or publish notes get the latest
news from your friends post videos on your profile tag your friends
use privacy settings to control who sees your info join a network
to see people who live, study, or work around you] [2007]Facebook
is a social utility that connects you with the people around you.
[Use Facebook to keep up with friends and family, share photos and
videos, control privacy online , reconnect with old classmates]
[2008]Facebook helps you connect and share with the people in your
life. [2008]Facebook gives people the power to share and make the
world more open and connected.[2009]Facebook Timeline: Overview
2004 - 20015
Facebook Timeline: Overview 2004 -
20015200420052006200720082009201020112012201320142015- 1 MM MAU
Launch100 MM MAU
GrowthSeed acquisition interest
PR StartsCapture your audiences attention.
Text HereConjecture about value
Financial News LeakTrojan Horse
Like ButtonRequisite leaks to media, etc.
IPOCapture your audiences attention.
Text HereShows how anemic FCC is in stemming consumer privacy
abuse and generally
WhatsAppInvestors continue to fall for fairy tales
Hyperbole OverdriveSource: WikipediaKey: *MAU = monthly average
users
