Facebook and the Cost of Monopoly
stratechery.com
stratechery.com
"Apple’s iOS at the forefront, the rise of mobile computing has dramatically reduced Microsoft’s decades-long operating system dominance. Before that, IBM’s hardware monopoly of the ’60s and ’70s was overtaken by Microsoft’s software monopoly. AT&T had a monopoly on telephone service for most of the 20th century, but now anyone can get a cheap cell phone plan from any number of providers."
Um, he managed to pick the THREE OF THE MOST FAMOUS EXAMPLES OF GOVERNMENT ANTITRUST ACTIONS, while trying to argue monopolies do not harm innovation.
Doesn't the fact all three of the previously dominant monopolies faced anti-trust decisions against them, before major new competing technologies sprang up, make it clear how important anti-trust actions are for encouraging innovation?
You may disagree, but to refute his argument effectively you'll have to do better than merely reassert conventional wisdom about monopolies.
If you have enough resources, it's often it's cheaper to quash-and-copy the competition than innovate. You may start labs to grab up smart minds, but this practice seems to be as much about suppressing competition as culturing innovation. And it seems to more to support the former than the latter. I would love some good examples of how this isn't the case.
But none of the examples he gives demonstrates that, because they are not examples where the monoplist was displaced independently of antitrust actions.
> Counterproductive because monopolists have scale that allows programs and research that cannot develop in companies engaged in perfect competition.
Antitrust action does not occur against benevolent monopolies in the US system, it only occurs when a monopolist illegally leveraged their monopoly, either to prevent being displaced or to monoplize another market. So, even if benevolent monopolies are eventually displaced and good for the research they can produce, the US antitrust system isn't directed at them.
IBM and Microsoft weren't dethroned until roughly a decade later, so it's a real stretch to claim any kind of causal relationship. Especially because they maintained — to this day — their monopolies in mainframes and PC operating systems. It's just that technological change made their monopolies less relevant.
There was certainly a causal relationship WRT AT&T, but the conclusion to that tale does not go "and then, American telecommunications companies became well-known for their low prices and excellent customer service."
> Antitrust action does not occur against benevolent monopolies in the US system, it only occurs when a monopolist illegally leveraged their monopoly
That's rather begging the question. The DoJ's cases against IBM and Microsoft, in particular, may have been financial bonanzas for the legal industry, but the central legal claims were Kafkaesque: the supposed "unfair competition" was that IBM bundled support services with its computers and Microsoft bundled software with its operating system. Essentially, the DoJ's claim was that their products offered too good a value to consumers, and ought to have been made worse so their competitors' products would have a better chance.
IBM and Microsoft may well have engaged in genuine anti-competitive practices (ironically, MS' sabotage of OS/2 would be a good example), but those weren't. And maybe the DoJ could have brought cases against them that actually served to the benefit of consumers, but again, those didn't.
Microsoft, strictly speaking, still hasn't been dethroned, it's just the market in which it has its monopoly has itself become less important in the grand scheme of things.
OTOH, it became less important because of other markets to which the government action prevented it from extending it's monopoly, which pretty clearly shows the relevance of the government action.
Likewise, the IBM antitrust action is what created the boom in independent comouter software and services businesses, which directly led to IBM being dethroned because software commoditized the computers running it.
> Microsoft, strictly speaking, still hasn't been dethroned, it's just the market in which it has its monopoly has itself become less important in the grand scheme of things.
This is literally my next sentence?
> OTOH, it became less important because of other markets to which the government action prevented it from extending it's monopoly, which pretty clearly shows the relevance of the government action.
Smartphones? Somebody should tell Nokia. The only one whose actions prevented them extending their monopoly to that area was Steve Ballmer. (Or Steve Jobs — six of one Steve, half a dozen of the other).
> Likewise, the IBM antitrust action is what created the boom in independent comouter software and services businesses, which directly led to IBM being dethroned because software commoditized the computers running it.
Patently absurd. IBM's fate was sealed a few months after the start of the suit, when Digital introduced its PDP-11 minicomputer, and over the next 13 years, along with others, e.g. Seymour Cray at the high end, proceeded to disprove the DoJ's case in real time, taking huge amounts of market share away from IBM's mainframes the old-fashioned way, by offering a superior product at a (much) lower price. It was on Digital's machines, not mainframes, that software publishing (such as ...AT&T's Unix) first became a major industry.
Al Gore's representations about the internet weren't really all that bad by politician standards, but to claim John Mitchell[1] invented software development is a new one.
Around the time the DoJ dropped its case against IBM, they committed accidental suicide when they released the PC, with someone else's (Intel 8088) proprietary chips and, even more egregiously, someone else's proprietary operating system (DOS, by you-guessed-it), which enabled everyone and their brother to make their own, cut-price copies, and, adding insult to injury, giving their erstwhile chip and OS vendors gazillion-dollar licensing bonanzas that IBM never saw a penny of.
This was IBM's own dumb idea, not John Mitchell's.
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Anti-trust law doesn't require a total monopoly. It requires evidence of monopolistic practices which adversely affect consumers and customers.
If you're negotiating, it's not a monopoly. If you're negotiating with a gorilla you can't afford to anger, or if you're being told what to buy and when and not negotiating at all, it's a monopoly.
IBM, AT&T, MS all showed clear evidence of anti-trust breaches.
The PDP-11 proves the point. DEC's PDP series was marketed as a Programmed Data Processor and not a Computer because the IBM had a lock on computer sales and rentals. Upper management in most of America would never authorise a computer purchase from anyone other than IBM.
Marketing the series as a PDP meant technicians, scientists, and engineers could buy a computer through a side-channel that bypassed the usual corporate acquisition process.
This wouldn't have been necessary if no lockdown existed.
RCA, Honeywell, and others all tried to break into the computer market directly. Only CDC succeeded, and that was only because Cray gave CDC a lead in HPC that IBM couldn't match.
For bread and butter corporate computing, IBM really did own the market.
You're kidding, right? Long distance calls during weekday hours used to cost like $6/minute, accounting for inflation. This improved rapidly after the breakup, not solely because of better technology, but because before that long distance was where AT&T was making most of its money and it had little reason to reduce costs or compete on pricing; i.e. it couldn't act competitively basically by definition.
This was also the period in which landline started very rapidly losing market share to cell phones (also a Bell Labs invention[1]). Remember when they used to charge you a dollar per text message? Remember when they used to charge you an arm and a leg if you went over your allotted number of minutes? Remember how they still do if you go over your ration of gigabytes?
Telecom has exactly the same razor/blade business model it did 10, 20 or 40 years ago. All that's changed is which services are the loss-leaders and which are the bleeding-edge, desirable features that they charge you a king's ransom for. Normal technological churn.
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[1] https://en.wikipedia.org/wiki/Advanced_Mobile_Phone_System
I don't think that many people dropped their landlines for cell phones in the 80's, or even the 90's. I find it difficult to believe that fewer or no competitors would lead to the same or lower cell phone bills.
I have no idea. What I can say is, relative to other countries and taking account of new technologies largely invented by pre-breakup AT&T, there's no clear improvement.
> You seem to be saying that competitive pressure has no effect on prices.
What competitive pressure? A national monopoly was broken up into local monopolies with hardly any more competition. In fact, our local-level cartels make things harder for new competitors than Ma Bell ever could; they have agreements (mostly enforced as part of the AT&T breakup) to share their easements and physical plant with each other as if they were all still part of the same company, but newcomers like Google Fiber have no access, and can be effectively held to ransom on a street-to-street and even building-to-building basis.
> I don't think that many people dropped their landlines for cell phones in the 80's, or even the 90's.
Not many people bought color TVs in the 1960s. Did their availability make black and white TVs cheaper? Hollywood movies better, or at least more spectacular? Not many people traveled by air back then, but did jet airliners make cars better and cheaper? I think the answers are obvious.
> I find it difficult to believe that fewer or no competitors would lead to the same or lower cell phone bills.
Maybe, maybe not. China Mobile is a monopoly but way less expensive than US providers. Europe is an oligopoly like the US but generally less expensive.
I don't think these are as obvious as you might think. Cell phone service is more akin to TV stations or other television service than the hardware used to view it. Black and white hasn't always stayed cheaper: You could buy a "normal" color television cheaper than a small black & white portable, for example. It merely changed.
Hollywood doesn't always do even that bit: I find BBC's "The Hogfather" (based on a Terry Pratchett novel) to be pretty spectacular. I went through a phase of Asian horror films, spectacularly surreal. Bollywood often has some crazy stories. Making cars better is a matter of opinion. Do you have proof that airlines made cars cheaper? Because most of what I find says they've basically stayed the same price for 30 or so years. My understanding was that things like the assembly line and advances in production technology have been the main drivers for vehicle affordability in addition to things like a growing used car market.
Funny how the more highly regulated European telecom market saw a huge and rapid adoption of mobile phones compared to the US which lagged by about 15 years.
European telecom regulations also held Europe back in other ways (mainly on the wired side) so I'm not claiming the straw horse that regulations are 100% great or 100% terrible. In fact consider Minitel: everybody could get an inexpensive computer terminal in their home, buy things online, chat, look up data, have set chat etc, starting from the early 80s. Digital lines were common. Yet 25 years later it died a backwater.
They did a ton of dishonest, unethical and illegal things. They even had internal memos about doing these things like the famous "Embrace, Extend, Extinguish" memo.
In order to describe these charges as you have one must have a severe lack of information or an equally severe bias.
EDIT - Downvote away, without a thoughtful response it is the equivalent of a throwing a tantrum.
It's true that monopolies often have negative societal consequences but it's also true that building a defensible "monopoly" or "moat", in Buffet's way of saying it, is extremely powerful for a business. It's also true that centuries old econ 101 charts that assume a static world (perfect information, rational actors, etc) is a lousy way to model the prospects of a modern tech company.
Of course he does. While not stated directly, the implied message from Thiel seems to be: monopolies are fantastic, for founders and early investors. Given his own history, is it that surprising he is a proponent? Perhaps in this case, being contrarian might be less about intellectual enlightenment and more of a rationalization for self-serving decisions.
https://promarket.org/argue-government-can-buy-government-qa...
Do you find the analysis to typically be pretty thorough and accurate?
I love the podcast and I think I've listened to every single one at this point, and they always talk through their reasoning at length in a logical, (mostly) structured manner, which I love. However in the back of my mind there's this little voice that says "they used to be management consultants and still do consulting, so of course they are good at making their arguments sound convincing--but how sound are they really from a strategic standpoint?"
Some of it we'll never know because it is in the realm of "what-ifs" but just curious for others' thoughts on the signal-to-noise ratio of their content.
In particular, Episode 101 left me feeling skeptical [2]. Aggregation theory / unbundling somehow predicts both Netflix winning and Spotify losing, but I was left with the impression that – had things gone the other way – an equally persuasive argument could have been made.
[1] https://en.wikipedia.org/wiki/Just-so_story [2] http://exponent.fm/episode-101-tv-is-the-oak-tree/
Ah, the AI effect in effect. AI is already here if you go by the original definitions set in the 50/60s. You just keep moving the goalposts as it gets better because "it cant' solve problem X yet" or "it's not quite as smart as a human" or "it hasn't exterminated all of mankind". This is a problem with humans when they don't want to share dominance with something else.
Intelligence is simply information processing. AGI is inevitable. ASI is worrisome.
Of course, anyone who could make business predictions with certainty would be starting businesses, not consulting. Perhaps there's still some value in just being able to create taxonomies from past events, as long as they're consistent.
It inspired me to take public positions for many years afterward. While my returns weren't quite as good as his, I learned a ton and absolutely crushed the market for 7 years until getting reckless with margin and learning a less pleasant lesson.
I'm not sure if this blog makes many actual predictions but if so it would be very instructive to track them.
Kids don't use Facebook. They use Snap, for now. Who knows in a few years.
Twitter and Facebook are what their parents use.
Your comment reads as "nobody goes there anymore, it's too crowded".
Whether or not the people who bought those shares go under water isn't their problem.
AKA, the early investors are going to make way way more money than if they had sold to facebook.
https://www.theinformation.com/snap-changed-employee-lockup-...
The Snapchat guys didn't want to be Palmer Luckey'd. They got the cash and kept their reputation. That's quite the win.
Because that's where the users are. PC VR is going to be a very small niche in the larger AR/VR space.
Further more, this experience of population at large is not reflecting the actual experience of most of the population of the world that has little to no exposure to computers or internet.
But when designing for your kind in a vacuum you will encounter some success among your peers.
Understand that the human brain cannot deal with this for extended period of time without serious side effects and there's no VR outside of limited niche market such as learning to overcome phobias.
Tech democratization can be foreseen through the rate of adoption in porn (VCR, DVD, etc.), what's the trend for VR porn ?
Mobile gaming didn't stop console and PC gaming, why should VR be any different?
But this is how it works, either you build something in a pure me,me,me fashion aka you sell to the highest bidder, usually one of the giant tech that buys to preserve their own interest or push their agenda. Or youyou actually care about people, users, customers and are not ruled by money and you don't sell and deserve what you earn while maybe giving back value to people and the global world.
To me snapchat are the obvious winner here.
Facebook offered to buy 100% of Snapchat for $3 billion.
Today, Spiegel's ownership share in the public company is worth more than $5.5 billion. Snap's market cap is ~$24 billion.
Facebook was "Worth" $92 billion when they IPOed and most people on HN lost their minds about how overvalued they were when the stock dipped on that first day:
https://news.ycombinator.com/item?id=4002730
Now Facebook's equity is worth $400 billion.
Amazon IPOed in 1997.. they didn't "make money" for over a decade, and even then, it was a tiny return. In the mean time, they built a massive business that's worth more than $430 billion today. Whether or not a company is making money in the most recent quarter has very little to do with their prospects.
>"Oh, well, but maybe Facebook just needs to mature, you say. If we give them just a few more years, the profit fairy might drop by and sprinkle her billions all over Facebook and its shareholders. I call fat chance."
https://signalvnoise.com/posts/2585-facebook-is-not-worth-33...
FB's trajectory after that point had a few step functions which had nothing to do with talent or execution (i.e. more predictable factors), but the remarkable mutual back scratching arrangement going on between governments and Facebook (and similar companies).
For example, I don't know how anyone in their right mind would have allowed the FB - WhatsApp acquisition to happen after seeing the price tag. I really doubt if anyone who understands technology still thinks this wasn't a sweetheart deal between the govt and FB.
The other step function is the US government's (and probably other governments) decision to simply look away on privacy issues as soon as they saw the huge benefits of having a tame populace unable to untether themselves from the top social networks (i.e. less stuff to monitor).
This is all the more bizarre when you notice how the privacy intrusion has basically moved to a stage where just about anything goes, and not one person is actually able to function in the economy without accepting a drastic reduction in privacy. By which I mean, it is only a matter of time when this is going to turn against the politicos who helped usher in this era. In fact, we are already seeing this in some cases. It seems like the people who are reaching the top positions in politics seem to be disgustingly shameless. The more regular, normal politician is unable to withstand/ignore the scrutiny of all the skeletons in their closet. While that may be a good thing (the scrutiny), the outcome where the most shameless person becomes the leader by default is not.
You are taking huge risks when trying to understand what manipulations governments around the world would resort to when trying to predict currency movements. You take a similar risk in predicting the trajectory of private companies which manage to acquire enormous quantities of data because you don't know what kind of mutual back scratching arrangements that is going to set up in the future.
Almost all of the stock market is decoupled from actual value, the bubble is obvious and once again the cycle will repeat itself and it will burst.
Facebook has $30 billion in cash and essentially no debt. The equity value of $30 billion in cash is.. $30 billion. So it's clear that they're worth at least $30 billion. On top of that they're generating ~$4 billion / quarter in net income. The equity value of net income is roughly Net income x (1 - Tax Rate), so call it $3 billion/quarter. Discount as you'd like for them to be worthless someday, but in the mean time they have a ton of cash and are printing a ton of cash.
I bet if you run the numbers and assuming a decent growth rate, you'll come to a total market cap of ~$420 billion. Efficient markets and all that..
Measuring Snapchat's decision to refuse a buy-out is simple: The investors, founders, and employees all have more money now than they would have had if they had sold. This will be completely confirmed in roughly 100 days (once the lock-up expires), as long as their stock price is above ~$2.50 on August 1st, they're vindicated.
You could make the analysis more complicated with opportunity cost calculations or assumptions about whether they would have received Facebook stock (which has appreciated a fair amount since the buyout offer) but those are all marginal concerns.
with $200 millions you could give away half of it and live happily on the remaining for a century. With $2 billions, the only difference is that you could give away 95% of it and live happily for a century.
[1]: http://www.jmooneyham.com/your-true-chances-of-getting-rich-...
Also, you have to also account for the synergetic benefits which FB provided to Instagram in terms of getting users quickly started by following and being followed by their fb friends.
An in the not so distant future it will be a few orders of magnitude less. That's how stock market bubbles work, they inflate in a silly manner then burst leaving the rich richer and the others with grains of dust and suicidal tendencies.
This is exactly why monopoly are hurting everybody but the people profiting from it.
I can't think of a better recent example than the story of Snapchat and Facebook's ripping them off in favor of patents.
https://www.wired.com/2016/08/instagrams-snapchat-ripoff-bra...
“The idea of featured ‘Stories’ is not new, so any patents would likely be quite specific to implementation details,” says Wagner. “And because the implementation/interfaces are slightly different, copyright doesn’t provide any protection. This is an area where IP laws don’t prevent the copying of another’s features or innovations.”
There's an implicit question, or at least an admission of ignorance.
Do you really think that the idea of patenting "story" wouldn't have come across Snap given that is their main revenue driving feature? Do you think FB should have patented NF back when it was the first one who launched it?
So - Diamonds. Classic monopoly. Physical good, limited natural supply captured completely by a single business entity. (Notably, AFAIK, the same is true for Areva and nuclear fuel).
Microsoft. Monopoly. Software goods. Their monopoly was achieved (AFAIK) through business deals and a quality-enough+ product. Has nothing to do with available supply.
Facebook. Network-powered monopoly. Achieved through a good product, maintained by good-enough+ and the network effect (and their adaptability). The number one hurdle for any FB "killer" (as opposed to unbundlers - arguably, Instagram, as an example) is competing with FB's network effect. There's zero supply that FB has controlled to maintain it's monopoly.
I'm not sure where this thought wants to go, but I'm trying to think up other categories or interesting things that fall into these categories.
Thoughts?
This is not a monopoly in any normal meaning that word is used. It is the network effect.
You should reconsider using diamonds as examples and analogy: https://priceonomics.com/post/45768546804/diamonds-are-bulls...
It seems to me the reason you don't understand facebook monopoly because you seem to believe it was achieved through a good product which is not at all how it happened, (if the product is any good it's for facebook). They got there through a lot of tricks from the black book of shunned upon dark tricks to control supply (new registered users). They kickstarted by seizing the universities students in ways that got them a lot of flak at the time then grew further by breaking their initial promises and more black book tricks and dark patterns. Once they reached critical mass and user lock-in, the people themselves would recruit new users and further improve network effect.
There's also the shadow side that happened behind the scenes and can be pinpointed to around the time of Peter Thiel involvement.
So "Facebook has a monopoly through network effect" means that due to the sheer number of people registered it has an effective monopoly. If you peruse the HN comments (or elsewhere) about facebook you will often see people that complains about facebook being a pile of crap that they can't leave because other people they want to stay to stay in touch are all there and some are only there. This is monopoly through network effect.
Sure.
> Facebook. Network-powered monopoly.
My ass.
In next to no sense of the word does FB still have a monopoly. Most people have left for 'greener pastures' and while most other social networks center around a different mode of content sharing, people are much more fluidly moving across networks than they did back in the "fb vs myspace" days.
> it's
its
Pepperidge farm remembers.
"No wireless. Less space than a nomad. Lame."
https://slashdot.org/story/01/10/23/1816257/apple-releases-i...
I think Pepperidge farm remembering past innovations as more glorious than current day innovations is not a new phenomenon.
So did Hi5 back in the day, and it still went the way of the dodo. If you cater to attention-deficient people, they will leave in droves as soon as the next fad comes along.
This may be an anecdote, but my Instagram stories are mostly older people and brands. Snapchat is still where I go to catch up on what my friends are doing, and it's even more popular with younger generations.
the author persuasively portrays the negative effects of a facebook monopoly, but does not objectively delve into the benefits.
consider the subsequent disruptions spawned by AT&T research, for example. even though AT&T itself did not commercialize most of these products (e.g., the semi-conductor), can anyone credibly argue AT&T did not foster innovation?
similarly, google's search monopoly produced cheaper smartphones, free worldwide communication, and self-driving cars.
facebook's monopoly lets it advance research on AI, drones, VR, internet access, and human-to-human communication.
it's far too early to judge if facebook harms or helps innovation.
perhaps there is enough data to assess google, however. one of google's victims is yelp. if yelp is worth $20B instead of $3B, but we don't have all the benefits of google's massive cash flow, is society better off? if we repeat the process for every google competitor, we can start to engage in an unbiased evaluation of google as a monopolist.
to clarify, i'm neither advocating for nor disparaging monopolies. the author is very sharp and one of the best tech analysts today. i'm simply hoping for fair and balanced analyses so we can reach informed conclusions.
What I think has kept the social network so attached to our psyches is the same psychological principle as to why the Japanese love romanticizing high school in anime over and over again. Facebook was created as a utility to connect together alumni within a university. It plays on our tribalism and need for cliques.
Just like this post mentions it also is moving towards more visual feedback. The sensationalist adds, the lude pictures and facebook videos aren't enough. There must be more sensory feedback even if it requires a VR headset to get it.
Take the example of the IRC chat. There are no avatars and the names are user created. Just like with radio in contrast to television you get less stimulation. It doesn't engorge the senses.
I don't know the current state of things with Facebook as of right now, but I think at some point there is going to be a movement that begins to build and build and it will come from a deep revilement for the sensationalized news, the abundance of ads, the platform that promotes arguing, the too-slick ease of doing virtually everything in a virtual format. At the core of it is the fact that long ago people sought to break away from illusory things. Think Buddhism and Gnosticism. Now, instead, we are willingly and eagerly enshrouding ourselves in something that looks glossier and more fabulous than real life and it seems like we've forgotten to remember the signs along the road in case we want to turn back.
Craiglist presentation hasn't changed either.
I don't think this point is relevant if the UI is good enough or have been this way for so long that people are used to it. Changing it would be weird.
> No innovation.
You want to innovate an online encyclopedia? How exactly do you do that? And without sacrificing integrity?
> It's just a matter of time.
What is this time to event thing that you speak of?
There are many problems with Wikipedia's presentation of information [1], but the point is that, even if Wikipedia's UI was the best there was, new media inevitably come along that change the way customers want to access their information. For example, you may think it's 'weird' to change Wikipedia's text-heavy UI, but kids brought up on Snapchat, WhatsApp and Instagram might want a more visual interface for their encyclopedia.
>You want to innovate an online encyclopedia? How exactly do you do that? And without sacrificing integrity?
Beyond UI, Wikipedia has many problems in its data structure, policies, and integrity, by which I mean the veracity of its information, and its endemic bias. Rather than discuss them here, please read my blog post: Wikipedia's 13 deadly Sins. [1]
>What is this time to event thing that you speak of?
The rapid collapse of an incumbent site due to its monopoly position and consequent lack of innovation i.e. the point of the original post.
Your response appears to confirm that the lack of imagination that goes hand-in-hand with monopoly products is not just confined to their creators. Their customers want the monopoly, until they don't. Wikipedia, Craigslist, Google and Facebook are not unassailable. Everything dies.
The true competitor to Wikipedia will probably look nothing like Wikipedia. It will likely appear "suddenly" to those not in the know. And Wikipedia probably won't die die... After all, Myspace still exists. It will just be a place no one goes to anymore, or maybe as a last resort when other options are fruitless.
I think you mean 7. They changed their default theme to Vector in 2010, replacing Monobook, which had itself replaced Standard/Classic in 2004.
Moreover, Wikipedia has also acquired a mobile theme, which is very “modern”.
https://www.mediawiki.org/wiki/File:Dantman-Skin-monobook.pn...
https://en.wikipedia.org/w/index.php?title=Main_Page&useskin... and https://en.wikipedia.org/w/index.php?title=Main_Page&useskin...
The encyclopedia itself is the largest and most comprehensive ever created. Its accuracy rivals or exceeds any general-interest encyclopedia, and most special-purpose ones.
Wikipedia has gotten tremendous mileage out of ordinary contributions, but I suspect is starting to test the limits of what a crowdsourced project can accomplish.
Moreover, it's specifically the question of who finds it appealing to volunteer, or in cases, "volunteer", their efforts to the project, which is becoming a problem. It's been a problem for some time, but it's becoming more of one.
Several major areas are already political minefields, not only among actual and qualified experts within the fields, but of those who seek to control models and understanding for other reasons. Climate change is certainly one of these.
There are more mundane issues as well. Wikipedia is quite good on any events or facts based after roughly 2004, but coverage can become quite thin for earlier periods, particularly those which aren't popular.
There's the problem of sourcing material, especially as Wikipedia itself is online, but many of its primary sources aren't, at least not cheaply and legally.
The upshot: the problems Wikipedia faces today are not those that it faced starting out, at least not for the most part. Much of the real work and innovation is going behind the scenes. Part of that is technical, part is managing the emergent social dynamics of the project and its contributors.
It would be trivial for any other competing project to match Wikipedia -- it simply has to copy the content. For it to actually exceed Wikipedia, in accuracy, as an epistemic system, it would have to improve on the process overall.
That's a harder problem.
The problems wikipedia faced at the start was the dubious source of funding by a shady founder, the problems wikipedia faces today is the colossal amount of money they don't actually need but ask for and receive anyways and drop conspicuously in private pockets.
So not much has changed basically except maybe the core of people in control behind the scenes managed to drive away newcomers and contributors to keep the control and power they have.
The good thing is that the licensing issue is mostly fixed and we should be able to fork wikipedia and salvage the data (if they ever fix their data structures and resume offerings usable dumps).
>Facebook may have a monopoly in social networking, and while that may be a problem for Snap or any other would be networks, Facebook would surely argue that the lack of deadweight loss means that society as a whole shouldn’t be too bothered.
Traditionally, the main issue with monopoly has been about suppressing competition and innovation, not about prices. Price analysis was at most an afterthought. Here's e.g. Woodrow Wilson [1] campaigning against monopoly in 1913 (he later created the FTC and signed the Clayton Act):
"Our purpose is the restoration of freedom. We purpose to prevent private monopoly by law, to see to it that the methods by which monopolies have been built up are legally made impossible. We design that the limitations on private enterprise shall be removed, so that the next generation of youngsters, as they come along, will not have to become proteges of benevolent trusts, but will be free to go about making their own lives what they will"
"Monopoly means the atrophy of enterprise. If monopoly persists, monopoly will always sit at the helm of the government. I do not expect to see monopoly restrain itself. If there are men in this country big enough to own the government of the United States, they are going to own it"
Last time I checked social networking was still overwhelming done in actual AFK social interaction across the world. In the online digital realm the king of social networking was still email by a significant margin. A good clue being that facebook ask for your email while email doesn't ask for your facebook.
So please don't fall for this language manipulation trick.
Addiction plays a huge role and Facebook is playing its cards very well.
"Tipping point" speed is x100 nowadays.
What exactly is the product that's offered? Connections to their friends? News articles?
It seems that Facebook simultaneously acts as a supplier (of connections to people / news) and a consumer (of connections to people / news).
So, it's not really clear what the 'price' and 'quantity' axes really represent in reality.
Your complaint would probably also apply equally well to Google as both are tech ad networks at their financial core.
One thing I've found super interesting/impressive about Snap is that it didn't try to outcompete FB in terms of sheer network size for its usage stickiness, and instead turned smaller, tighter and more private networks into a differentiator, while at the same time providing advertisers/brands with a competitively massive audience - not an easy thing to identify, much less execute on. TBD if that differentiator is enough to keep them alive vs. FB's more traditional network-effect-driven advantage, which will be hard to beat on its own terms. I think Snap's success will depend a lot on its ability to avoid being tempted to play that game (see: Twitter!).
Relatedly, I think there could be a lot more thought given to how we should think about monopolies in the context of markets where networks effects are crucial to the business value (aka. Facebook and Google most obviously, arguably Amazon, Apple), because one logical conclusion is that in a market where network effects are a major factor, the biggest network should be best positioned to provide the most value and therefore (assuming it doesn't actively eff things up on other fronts) should continue to grow until it dominates the market...which seems to pretty much be what happened, and it makes pretty good sense for the most part. in these cases, it actually seems BAD to break these networks apart, since their scale is arguably one of its primary values to the customer - this doesn't mean of course that they can't abuse their monopoly powers (I think they probably do to some degree and will continue to), but interesting to think that the traditional "break up monopolies" impulse doesn't make as much sense. this leads me to think it will just be more consumer-protection-related regulation (under the banner of consumer privacy, or maybe even public health, given all the "social media addiction" thought pieces out there these days ha).
random other thought: this all also reminds me that Mark Zuckerberg has not made a peep about wanting FB to be thought of as a "utility" in a long time (or maybe he has and I just missed it...but couldn't find any recent mentions), probably in part because they are now a lot more at risk than ever before of being regulated like one (see this talk from 2013: https://techcrunch.com/2013/09/18/facebook-doesnt-want-to-be...). Also kind of funny to hear him talk about "we don't want FB to be cool" too, because now it seems like FB very much wants to be cool again now that Snap has become cool and has threatening user counts.)
Facebook is like the new TV. There's a ton of interaction with it and most of that content is locked away from Google's reach.
They are fundamentally more powerful than Google and are underpricing their ads.
Not completely true when majority of their mobile users access the app through Android and majority of desktop users, Chrome.
I don't think Facebook can ever reach Google's level. Google is expensive for a reason because it's highly valuable since people are searching to buy.
Facebook is cheap because you are really casting a wide net and hoping to catch a fish. This is less efficient than Google's Adword.
Google is more transactional. Facebook are display ads that are displacing TV.
I would never share my searches on FB. Google photos has all my photos and FB what willing to share. Then YT has over 1 billion hours a day viewed which is 19x more than FB video and growing faster.