Critical Internet Analysis and an Ecosystem Map
Facebook is one of the most popular and profitable social networking sites in the world. The platform offers users the chance to connect and share moments with their friends and family members. Since its inception, the platform has connected billions of users all over the world with long lost friends and family members. Schoolmates have been able to organize reunions because of it, and other groups have been reconnected as well. It is crucial to note that Facebook has also helped people overcome or break the geographical barriers that existed before. Building networks with individuals from other countries was made incredibly easy by Facebook. The connectivity this platform offers is one that will forever make it relevant in the lives of its more than a billion users.
As a company operating in the tech world, Facebook has also helped to greatly contribute to some of the major developments enjoyed by other organizations today. Finley (2019) writes that organizations such as Netflix and Uber have made use of technologies that have been developed by Facebook. One of the ways Facebook changed the tech industry is by coming up with technological capabilities to help deal with the large amounts of data it was collecting. Finley continues to indicate that Facebook was forced to create software and hardware tools for its data centers. However, instead of hoarding these tools, Facebook released them as open source. Many companies have contributed greatly to the tech world through the open-source environment. Because of its approach to technology, many of Facebook’s “technologies have become industry standards.” Finley (2019) writes that Facebook has “played a tremendous role in shifting not only in the way we build our servers but also how we write code for browsers and phones.” Through its open-source efforts, Facebook continues to enhance the tech world and thus becoming a major player in the tech industry and one that will remain relevant for years to come.
The history of Facebook has always been controversial. However, the common denominator has always been Mark Zuckerberg. In spite of the many stories about Facebook and how it started, everyone agrees that it was Zuckerberg behind the idea or who put the idea together. Facebook started as Facebook, which in 2004 was a social media website that sought to connect Harvard students. However, in a matter of days, thousands of students had already registered. Slowly, the website spread to other schools in Boston and eventually to other Ivy League schools. It is not known if the vision or idea was there from the start, but regardless of that, Zuckerberg has managed to grow the company further and beyond what any of the founders could have imagined.
Growth before IPO
Before going public, Facebook had experienced tremendous growth. The company had shown promise, and with more than a billion users already by 2012, the tech giant had showcased a lot of strength. Before it went public, the company was valued at $77 billion. Dembosky (2012) writes that those who knew the company valued it at “between $75 billion and $100 billion.” Before its IPO, its net income was at $205 million, revenue was at $1.06 billion, and “growth slowed from 55 percent…to 45 percent.” All the above happened before the popular IPO of 2012, which was quite a flop, and lost many people a lot of money.
After a rocky start, Facebook has been able to turn things around and made great strides towards becoming one of the largest tech firms in the world. By market capitalization, Facebook is in the top five, trailing Apple, Microsoft, Amazon, and Alphabet. When the company went public, its shares were priced at $38 apiece. However, as of 12th November 2020, its shares are priced at $275.08 apiece. The growth has been immense, with revenue said to be more than $70 billion. The sky appears to be the limit for Mark Zuckerberg, and the company will continue to grow even further.
As it has continued to grow, Facebook has expanded and gone ahead to acquire and merge with other entities to help increase its reach globally. Shead (2019) notes that Facebook acquired Instagram in 2012 and WhatsApp in 2014 for $1 billion and $19 billion, respectively. He continues to write that in App Annie’s list, Facebook owns four of the most downloaded apps in the world. The acquisition of Instagram and WhatsApp propelled Facebook to greater heights as it controlled a significant percentage of the world’s social interactions. People have complained that Facebook has a data monopoly because of these acquisitions, but the company continues to make such moves every other year. While these two may have been some of the most popular, others include CTRL-labs, Oculus VR, Atlas Advertiser Suite, among others. All these have helped push the company to greater heights of development.
When companies reach the growth heights of Facebook, they begin to show interest in startup companies that have the potential for long-term growth. Having had a humble start and been helped by the belief of investors, Facebook is in the process of setting up a multimillion-dollar venture capital fund to invest in startups. Niu (2020) writes that like its counterparts in the tech world, Facebook is setting up a venture capital arm. It is being reported that Facebook has been “scooping up tech investing talent to lead a new fund that will be part of its New Product Experimentation team” (Niu, 2020). It is indeed surprising that it took Facebook this long to get into venture capital. However, much should be expected from this tech giant.
Impact on society
Facebook employs 44,492 people directly (Clement, 2020) and millions more indirectly. Facebook has a team of engineers, developers, managers, etc. In its headquarters. The CEO, Mark Zuckerberg, has become one of the world’s richest men through the company. Facebook also employs more people indirectly as content regulators. These menial jobs are usually through agencies that are contracted by Facebook, and some of them are overseas. Secondly, Facebook created a platform for people to earn income. Today, there is a new career path known as social media marketing. Though social media marketers’ expertise cuts across the social media industry, they indirectly earn from Facebook. There is a new job or career as a social media expert for businesses and corporates to help run their social media accounts. Social media influencers are also indirectly employed by Facebook and the other players in the industry. Social media influencers are the people who have accounts with a big following, and they charge businesses to allow them to post their products on their social media accounts. Facebook has been a key player in developing new career paths, especially for the younger people entering the workforce to become social media influencers, social media marketers, and social media consultants (Buettner, 2017).
Facebook has given small business access to the global market. Traditionally, penetrating the global market was reserved for companies with big marketing budgets (Basri & Siam, 2017). However, many people have taken to social media, and they market their services/products to a global audience. Some businesses operate on social media platforms exclusively. They only have a social media presence and hardly any physical location. These small budding businesses have overcome trade barriers that would otherwise take the business under through Facebook and other social media platforms.
Since its inception, Facebook has had an unprecedented cultural impact on society. First, it has transformed the way people interact with each other and redefined terms like friends, status, among others. Facebook offers a platform for friends and family to connect and communicate with each other irrespective of the physical distance. It enables them to share pictures, stories, and important information about their lives.
Social media giants have changed the media industry. Facebook is the earliest and largest social media platform by users’ base and has played a significant part in changing how the world consumes media. Today’s audiences expect to be able to choose what they read, and most believe they should be able to contribute content and opinions, too (Harper, 2010). The traditional media business model was primarily pegged on broadcasting newsworthy information and screening of media content. However, advertisers have moved to social media platforms where there is better engagement with the consumers and relatively cheaper. Additionally, most newsworthy content goes viral on social media platforms before media outlets set up a camera to air it. This has changed the agenda-setting role of media companies and their business model, especially those in print.
Since it is hardly possible to regulate the content on any social media platform, some people have used them maliciously to spread misinformation. Publishing conspiracy theories and falsehoods on social media has complicated the efforts to find credible information on cyberspace. Most people do not check the authenticity of information on social media platforms, which has disrupted communities.
Social media platforms have exacerbated cyberbullying (Nilan, Burgess, Hobbs, Threadgold, & Alexander, 2015). Revenge porn and other malicious content are shared on social media to shame others. In some cases, innocent people are bullied, and there are adverse effects on cyberbullying. Some people become depressed, and others commit suicide because of social media. Social media platforms have poisoned cyberspace and littered it with trolls and bullies who, by the stroke of a keyboard, hurls insults and falsehoods about other people. Facebook and other social media platforms have also created new societal problems like addiction. Most teens and youth have become addicted to social media, and it has detrimental effects on their academics and social and private lives.
Facebook has had an unprecedented impact on the political landscape, locally and internationally. CEO Mark Zuckerberg and the company CFO Sheryl Sandberg have testified in Congress on different issues that the company has waded into politically. One of the most famous political involvement Facebook has had was in the 2016 US presidential elections. Facebook was used by a foreign government to influence the decision of the American people by spreading misinformation about Hillary Clinton and promoting Donald Trump’s candidacy. Bots and fake Facebook accounts were used to spread Hillary’s conspiracy theories, and some people believe it is why Hillary lost the election. Additionally, since Facebook sells data, some companies acquired the data and weaponized it to influence the victim’s political decisions (BBC, 2018). Data privacy rules on Facebook have long been controversial, and though the company claims that users’ data is not sold, other people have accessed the data and used it mainly to target ads.
In the wake of the 2016 us presidential elections, the US government sought to regulate Facebook. The plan never gathered enough traction to bring any meaningful change primarily because of heavy lobbying, but it exposed the deep connections between Facebook and politics. Facebook spent $11.5 million on lobbying in 2017 (Steinmetz, 2018). Today, the company has not changed in any meaningful way because it handles users’ data, and the government is not actively pursuing strict regulation. The fines the company pays as damages for any wrongdoing is usually a slap in the wrist as they are too small to impact the company or compel it to create any meaningful change.
Internationally, Facebook has found itself in complicated politics. First, the company has been blamed for influencing electoral results either by being used as a propaganda tool or suppressing the voice of the people. In 2018, a whistleblower who worked with Cambridge Analytica, a UK-based company that was largely used by different political candidates for social media campaigns, came forward and explained how the company swayed the will of the people in other countries. According to (BBC, 2018), the whistleblower detailed how they influenced Brexit, Kenyan presidential elections, 2016, US presidential elections, etc. However, in Europe, Facebook paid $1 million to the UK government for the Cambridge Analytica scandal (Reuters, 2019). Concisely, Facebook has been involved in many political issues though the company has tried to distance itself from some of the controversial issues, it is evident that the company cannot dissociate itself from politics in every territory it has a presence in.
Concisely, since Facebook’s humble beginning in a university dormitory, the company has changed the world and left a trail of billionaires, including the founders. The impact has gone beyond the tech industry and waded into cultural, political, and economic. Facebook has had an unprecedented impact on the world. The company’s ecosystem map is a testament to today’s world’s interconnectedness and shows how companies in the tech sector relate to society, culturally, politically, and economically. Since social media technology is relatively new, the pioneer companies will continue to change the world, and efforts to tame their growth or societal impact will be playing catch up.
Basri, W., & Siam, M. (2017). Maximizing the Social Media Potential for Small Businesses and Startups: A Conceptual Study. International Journal of Economic Perspectives, 11, 241-245.
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Steinmetz, K. (2018, April 12). Congress Never Wanted to Regulate Facebook. Until Now. Retrieved from https://time.com/5237432/congress-never-wanted-to-regulate-facebook-until-now/