Mark Zuckerberg's Ponzi Scheme (2019) | Hacker News Reader

Mark Zuckerberg's Ponzi Scheme (2019)

aarongreenspan.com

51 pointsannadane24 comments

Note, the author of this piece has a long-standing grudge against Mark Zuckerberg.

Namely he thinks he co-founded Facebook, and filed lawsuits about it. Back in 2009 they were settled, and he has been a public critic of Zuckerberg since.

See https://www.adweek.com/digital/facebook-announces-settlement... for verification that there was a lawsuit that got settled. And see the end of the article for the fact that he still maintains that he was the original founder of Facebook.

Ok, but which of his assertions are wrong?

The big one is that he claims that Zuckerberg just ripped off his original code. He lost that one in court.

His opinions on Zuckerberg's personality are heavily flavored by that personal conflict.

Second, Facebook does not have a monopoly. Unfortunately for them, social networks are not that sticky. And they can only continue buying every up and coming social network for so long before they miss the critical one. (Perhaps Tik Tok will turn out to have been the one...)

And finally Facebook is not a Ponzi scheme. I think that they are overvalued. But not Ponzi.

You're incorrect on all three counts.

I never claimed he copied code line by line, and that issue was never litigated. I never even sued Mark. So I definitely didn't "los[e] that one in court."

Anti-trust scholars and Congress agree that Facebook has a monopoly and has engaged in monopolistic behavior. See https://judiciary.house.gov/online-platforms-and-market-powe.... It's an open question as to whether the FTC will sue on these grounds.

You don't provide any justification at all for your assertion regarding a lack of Ponzi-type behavior, so I'll just note that I disagree.

Thank you for saying this Ben! Be careful, Greenspan has a history of trying to burry criticism and threatening people who comment about him on the internet. He is probably looking up info about you right now.

I guess I'll be the contrarian here. The real customers of FB (aka advertisers) that I've asked all claim to get their money's worth from their ad spends and obviously they keep going back to the well rather than switching to somewhere else. Fake users and bots can't be spending fake money. So even if the claims about the raw number of users are grossly exaggerated, the performance metrics which actually matter (eg conversions per ad dollar) can't be fake. Therefore the company can't just be an elaborate scam.

Many Madoff investors praised Madoff for many years for the amazing returns they received. Many of them more than doubled their investments many times over. So Madoff cannot have been a scammer.

I don't think this analogy holds. In the Madoff example, returns were quite literally only on paper, as they were fabricated out of thin air.

As someone who runs ads on Facebook, I can tell you that we saw an immediate lift in revenue and profitability as soon as we started. Internally we actually believe Facebook is misattributing Facebook driven purchases to the low side, as various ad blocking tools like uBlock may be interfering with this attribution matching.

For the Madoff analogy to hold, Facebook would have be going to our site and making just enough purchases to convince us to continue to run ads on Facebook.

From the view of the business, I couldn't care less of how many fake accounts are on Facebook. As long as money in < money out, we're going to keep running ads on Facebook.

> a company that was out of users in 2012 managed to find a wellspring of nearly infinite and sustained growth

facebook's aggressive expansion into developing-nation markets is no accident:

https://www.theatlantic.com/technology/archive/2016/01/the-f...

(2019)

Previously on HN: https://news.ycombinator.com/item?id=20507251

Discussed at the time: https://news.ycombinator.com/item?id=20507251

Reply on news.ycombinator.com