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Comment by janandonly | Hacker News Reader

I feel the same burning hate like a thousand suns for FB/Meta, Google/YT and other platforms that monetize their users.

But, let's be frank here: They monetize you and me, us, the users because 1 they can and, 2, they have to.

Yes, they have to.

Imagine they provided access to their platforms for free. How would the shareholders (your retirement funds included) respond when less profit was made?

You see, we view them as public utilities, as a shared park or public garden or nice riverside picnic area, but they are not anything like that at all. They are companies that have a responsibility to the paying user, that is to the advertisers who want to track you as a viewer, to know if/how much their ads work.

The closest thing to a "public utility" on the internet to this day is email, good old SMTP/IMAP email. It's open, everybody who's not yet on Hotmail's or Gmail's spam-list can use it, and you can even develop an app for it yourself if you so wish.

The closest thing to a social open protocol is: the fedi-verse on Mastodon or the relay-based Nostr system. You don't want to be the product of a mega corp? Try these open platforms instead...

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It’s a Trojan Horse pattern, really. They give away the service for free membership with billions of VC until their competitors collapse or fade away, then they start becoming more aggressive with ads and/or charging for premium access which used to be free.

This is not new, Gillette used to give out free razors to get people used to their ecosystem and get recurring revenue.

It’s just more “in your face” now.

I think Nestlé wins the most egregious example; where they gave free baby formula in developing countries for just long enough for the mothers to stop producing milk and then started charging them for the right to feed their babies.

While telling the mothers it was healthier for the baby to use formula

Well, I think Gillette's purpose was also very much in your face.

Did they stop? It used to be every guy got a razor for their 18th birthday, which was creepy as nobody even signed up for it(unsure about women?). Myself and all my classmates got one.

I tried Googling this, and the last article I found was from 2019...

Loss Leader is not the same economically as Dumping. Gillette is the former, VC-backed companies are the latter. Loss Leader tactics are sustainable in a competitive market, but Dumping is profit negative until someone (hopefully your competition) goes out of business.

Veering off topic, I started using safety razors for just as good a shave, for 10cents a blade. At ten cents each, I use a new blade every shave and it's so much nicer than a 2nd use top-of-the-line gillette.

But there's no network effects with razors.

Exactly! This is a strategy that works even for markets without network effects. It just gets even more amplified (and profitable) when network effects exist.

In todays terms the equivalent would be an invite to a closed Gillette page/group/discord that has exclusive videos from the latest influencers (or whatever teenagers like and talk about).

For example OOP could get their daily cat based dopamine fix from a myriad of online sources, most open or easily bypassed but they want to see this one particular cat which is behind Meta’s wall and requires additional payment (in terms of data) from them.

I noticed this same thing recently with Arcoss golf sensors which are now essentially free everywhere.

Won't someone think of the shareholders?

This denial of responsability is a cancer on society. Poor devs, they can do no better because their manager ordered them to. Poor managers, they can do no better because they must reach their OKRs. Poor CxOs, they can do no better because they must please the board. Poor board, who must maximize the returns of the shareholders. Poor shareholders, who just want their retirement funds.

We can keep debating this all day long, nothing is going to change. The best thing to do is stop using these services.

Twitter, Facebook, Instagram, Tiktok... We can easily live without them. Our lives might actually be better without them. Why are we spending time debating the ethics of these services? It is like fast food - just avoid.

When entities like banks, hospitals, insurance companies etc do shady shit, THAT is a problem. Those are necessary services, social media is not

This is definitely the correct approach.

I’m always surprised by just how insidious these private platforms are.

Eg I’ve seen signs in a local forest saying “dangerous work” would be announced only on the Forestry England facebook page.

Similarly, I’ve seen government bodies try to use WhatsApp as their official communication channel.

I’m not sure how publicly funded bodies sign off on exclusively using private platforms for coms but it happens and will probably require legal action to stop.

Similarly, I’ve seen government bodies try to use WhatsApp as their official communication channel.

There is at least one college that I know of, where every announcement is made on Facebook, and Facebook only. Students are forced to have a FB account.

It is just pure laziness. There are some governments (Europe mostly) that are attempting legislation (banning Google Analytics on gov sites, for example). But law is slow to catch up, incomplete and ineffective.

This is not a problem that can be solved completely by law.

> It is just pure laziness.

You've hit the nail on the head there. There's no great conspiracy here, it's just lazy people using what they know to get the job done.

The great shame is that IMHO it's a terrible outcome. I don't want a Facebook account but I still want to be able to take part in society on open platforms.

> This denial of responsability is a cancer on society

I think this is an unproductive way to think about problems of collective action, which are capital H hard. We have three known mechanisms for solving collective action problems:

1. Culture

2. Changing incentives of existing actors (laws, taxes, etc.)

3. Creating new institutions with different incentives

No one really knows how to influence (1) very strongly on the scale of a decade. The others require government willing to govern in a very active way, the Republican movement has largely crippled this capability in the US over the past 40 years, roughly since Gingrich took the helm. (this is not meant as an attack per se, I only intend to say that the Republicans have been effective at achieving their stated goals, and like all political agendas it has a shortcoming like the one here)

You very accurately described an example of large technological-societal systems’ overall situation not being subject to rational human control.

Yes, read some Ted Kaczynski.

Major institutional shareholders for most companies is a small cabal of financial institutions, like Vanguard, Blackrock and State Street Corp. The people in those institutions often known to interact with each other socially and their role is to protect the wealth, activities and identities of their clients.

The next step in the chain: why do shareholders need retirement funds?

That is not what I meant.

What I meant was: your and mine and everybodies retirement fund has shares of FB and Google in their portfolio, meaning, when we retire, we reap the benefits of the profits these companies made.

As others pointed out: The elite who own most of the share profit much more, of course.

Yup!!

When I criticize Google, or some other company, I am not forgetting that they are motivated by making money.

How much do you pay?

If your answer is non-zero, maybe you would have a point, but let's be honest, statistically it's highly unlikely that you do.

Poor pnt12, wants people to work for them for free, and insult them while you're at it.

There is no option to pay. I would pay for gmail just for having access to customer service in case of account issue.

Why would you lie on something so easily verified?

How can I pay for my personal gmail account and get support?

You can get a Google Workspace account, which is the counterpart service to Microsoft Office/365 just for comparison. You pay per user, unless you want a specific deal, then you go for Enterprise, which is not very likely at a 1 person workspace.

Plans are described on Google's website.

The idea that everyone involved in the economic system of app development simply lacks moral character is a pretty weak take. Most apps/companies exist within a capitalistic framework. They likely wouldn’t exist without early external capital providing upfront funding for R&D.

In your mind, who should bear the cost of building and maintaining large services like Instagram?

It's not that they lack moral character - is that they don't exercise it.

The whole system rewards maximization of profits, and all else is an up hill battle.

>How would the shareholders (your retirement funds included) respond when less profit was made?

At a certain point, who cares? A company can exist indefinitely with any level of long term profit. They don't need to constantly be maximizing profit in the short term which is where these "fuck you" patterns generally arise. We have designed a system that has convinced everyone to never be satisfied or say they have enough. But there is no reason why that needs to be the case. Companies don't need to grow every quarter forever. It is both impossible and ends up degrading the lives of both employees and customers.

Exactly. You think Nintendo prioritizes quarterly growth at the expense of everything else? No.

Companies are not mindless money machines, they're run by people who make decisions. I feel like post-80s Americans totally lost the concept that a company can exist for more than five years and without constantly chasing a buyout or merger for an easy exit.

We need more founders to start companies with the intention of keeping them going 10, 20, 30+ years. Just my two cents.

Startups are an interesting case since the incentives are not aligned to building long term businesses.

Instagram being a startup, their user's goals were aligned with their own while they were growing. The happier the user the better the growth metrics, the better they are playing the VC game. Now that they need to be solvent, they need to balance two goals, user happiness and profit per user. If you aren't contributing to ad rev or data acquisition you're no longer aligned with their goals, so log in or bugger off is the message we get.

I think there is something to be said about how a business will form as well, it's unlikely a business that formed all it's goals and policies in a glut of money and a growth mindset, never having to make the dollars make sense, will suddenly pivot to profitability without turbulence once the bills come due.

A nonprofit that wasn't a publicly traded company would a viable alternative model. It wouldn't need to have the same insane up-and-to-the-right incentives and drive to toxic monetization.

It doesn't have to be a nonprofit. There is nothing wrong with turning a profit. The problem is when the company's only goal is ever-increasing profit and they are willing to sacrifice the wellbeing of their employees, customers, and community to achieve it.

In the context you are using it, "profit" has a very specific meaning that's a little incongruent with what you're trying to say.

In that context, "profit" is the idea that earnings above cost are distributed to shareholders. The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.

From a stock price perspective, it will just be too tempting.

Nonprofits are disallowed from distributing earnings above cost or any other profit mechanism. While they might have their own set of pathologies, they're immune to the one I've described, to the best of my understanding.

Isn’t it possible to maintain ownership among founders and initial investors and maintain a minority share (<50%) of public stock? Although there’s nothing wrong with staying entirely private either.

It seems almost impossible to run a public company without having the place be taken over by bean counters these days.

I believe that it is possible for that to happen, and I'm too ignorant to say whether it is common, or what circumstances might prompt it.

There are probably quite a few ways such a company would be vulnerable to takeover.

> The stock market mechanism then guarantees that companies unconcerned with that sort of profit will see someone gobble up the shares once they dip low enough (and they will), install a new board of directors, and dismantle the company for parts or some other endeavor-ending inevitability.

There are all sorts of ways to defend against a hostile takeover like this. I already mentioned Zuckerberg having majority control of the voting shares despite the company being public. There was also the attempted takeover of Netflix a decade ago that was prevented with a poison pill to issue more shares.

Which every for-profit company seems to wind up doing these days.

Every for-profit public company. And so they should/have to.

This is relatively new behaviour that only showed up around fifteen years ago, during the crash. Before then publicly traded companies such as DuPont or IBM would settle for a very gradual increase if it meant they had a stable market and dependable revenue stream. Especially if they had majority control of that market, since they could already squeeze customers for whatever amount they wanted, as Bell and Microsoft did. It was the smaller volatile companies like Keurig that disregarded five and ten year market projections and went for massive market expansion and quarterly or yearly profit increases because they were competing against giants in their respective or adjacent industries and needed to grow big enough fast enough not to be squashed. Between 2000 and 2008 the DOW and NASDAQ indexes stayed around the same level, then they cratered in 2008, and by 2011 they just started going up and up and up like they had back between 1982 and 1989. Except so far we're twelve years in and it hasn't slowed down, unlike the slowdown that started in 1987.

Companies changed up the way they did things starting in 2008 in order to survive, but sticking to that short term panic survival tactic is coming to a head. They've done almost everything possible in order to ensure growth, but the public just can't handle it and things are starting to collapse under the weight of near maximum monetization.

Why should they? Why does there need to be a dichotomy between doing something good and living in poverty, or else do everything possible to squeeze out the next short-term dollar. It strikes me as a profound failure of imagination to think there's no possible way to structure our economy where more companies could pursue profit in balance with other goals that can not directly be translated into next quarter's P&L statement.

Hence the '/have to', I'm not saying they philosophically or morally 'should' - I'm not commenting on that at all - I'm saying they have a duty to 'maximise shareholder value', a legal obligation to owners to (aim to) make as much money for them as possible, basically.

A privately owned company can do as it (that is: its owner(s) without state oversight) wishes.

If you want me to comment on the philosophy or morals of it though, I suppose I think 'meh, whatever' - a private company is free to spring up and compete, free of public shareholders and free to maximise customer satisfaction instead. Of course it's easy to say 'free to spring up', and really there are all sorts of barriers to entry in many almost monopolistic markets, but that's rather a separate issue I think - it's just as much an issue for any less customer-oriented, perhaps public or wannabe public, company trying to compete.

They do not have to, regardless of whether it's what the shareholders would prefer.

They only have to do what the shareholders demand if the shareholders actually vote to make them.

The meme of the "fiduciary duty" meaning that profit must be maximized at all costs has been debunked so many times by now it's really not funny.

In what sense is it 'debunked'? I'm not aware of a meme nor trying to be funny.

The idea that execs of public companies have a legal requirement to maximize profit for shareholders, which is false and based on some misunderstandings of actual requirements, has been frequently stated (at least by commenters and pundits) as justification for companies taking awful and inhumane actions. ("Frequently repeated" makes it a meme; the word doesn't just mean image macros.)

The "fiduciary duty" rule that actually exists simply means (as I understand it) that execs can't legally enrich themselves at the company's expense beyond their agreed-upon compensation, without the approval of shareholders/the board.

So no; "every for-profit company" should not and does not have to take steps to maximize profit at the expense of their employees, their customers, and the public at large. Frankly, many of the ways they currently do this either are already or should be illegal, and are definitely immoral and detrimental to a healthy and functioning society and economy.

No, it doesn't have to be every public company either. Meta might be a for-profit public company, but Zuckerberg still has the majority of voting shares. If he wanted to get rid of the annoying IG "feature" that this blog describes, no one could stop him. He could prioritize the long term health of the company over their quarterly results. He is the one that is ultimately making the decision, not the public shareholders.

Which is every for-profit company once MBAs take it over and want to cash out in an IPO.

Wikipedia "donate now" campaigns can get pretty front and center. Maybe not quite the same level; but non profits also have a tendency to push hard on donations.

That is incredibly mild compared to how much facebook, reddit, twitter and google are monetizing their users.

Yep, and Reddit in particular is the culmination of over a billion dollars' worth of VC funding. The changes we're seeing are unsurprising when you take that into account—even though Reddit has never been profitable, those investors are still expecting their return, which forces Reddit to either start bringing in serious revenue or have a promising IPO (or both). None of this has ever been for users; we're merely a driver of growth/profit to them.

Investor-backed platforms offer the illusion of "free public utility," but they were never meant to serve us in the first place. Their goal has always been to cash out.

> even though Reddit has never been profitable

they sure had a good trajectory before huffman fucked that up and bought moonshot projects and hired 2,000 employees and did everything possible to mess up that trajectory so they could pump and dump for an ipo.

Isn‘t that a problem of shareholder thinking? A problem that imo should be meanwhile singled out as a bad way to handle a company. Shouldn‘t it be handled with thinking of all stakeholders? This would result in better management decisions, or not?

> Yes, they have to.

Nope. They chose to.

Do some incentives encourage them in this direction? Sure. That's different than them "having to". Actual people are doing this, and they actually made choices toward maximum exploitation of human weakness. They are morally responsible for those choices.

I agree that people should leave those platforms and move to open solutions. That would be some good choice-making. But that possibility doesn't diminish the responsibility of the monetizers for their choices.

As I understand it, they have to. Google 'Fiduciary Duty'.

Imagine that I had already read about that and still wrote what I wrote. What might you take from that?

> But, let's be frank here: They monetize you and me, us, the users because 1 they can and, 2, they have to.

Don't let them. No FB. No WhatsApp. No Instagram. I take entire IP blocks assigned to Meta and traffic to/from these IPs is simply dropped. I take their domains and nullroute them too, because I can.

Once you do that, you become harder to monetize.

Just to add: these arguments are good and valid until company become monopoly. And until company start to actively shutdown, integrate, prevent any other company from becoming competitor.

Imagine shared park or public garden owners that buys all other shared parks in country and actively prevent creation of new public parks. And then started to put loud and bright advertisement boards on every tree, near every gil and on every picnic place. And punish you for wearing headphones.

Great point, in the 90s people used to spend a fortune (relatively speaking) on taking, sharing and discovering pictures, consuming media and getting their news.

Now everyone wants everything for free, but won’t give anything in return. And they also want market returns on their stocks, 401ks, etc at the same time.

That being said, Meta/Google could implement a guaranteed privacy-first, ad-free option for something like $10-20 a month to give people the option to be a “customer” instead of “product”.

And as you said there is the whole mastodon/pixelfed/lemmy network that people could use, although many mastodon instances seem to be running into financial problems lately.

If giving people the choice of an ad-free premium subscription was more profitable, they would do it. The issue with doing that is the users who pay are also the most desirable audience for advertisers.

A premium model also eventually creates two separate products. The free product is (at first) built for the needs of the users to attract them and get enough volume to support an advertisement model. Then, it is gradually built and focused toward the needs of the advertisers. That gradually shifts over time once the company has captured the market on both sides (this is a two-sided marketplace after all) to optimizing for the needs of the company. It’s harder to achieve this final end goal if you have a product that is optimized for the needs of the user, because you don’t have a two-sided marketplace anymore that can be exploited on both sides. Collecting money from businesses (advertisers) in bulk and providing them support can be easier and less costly than managing millions of premium users and supporting them.

I understand how the market works and how the Gompertz curve looks for new product lifecycles. I have a (professionally useless) masters degree in that.

My question is, what’s your solution?

The shareholders/stock market (largely represented by the board) will replace any CEO who doesn’t employ patterns (dark, fu, whatever) to maximize revenue. And private companies can’t raise capital easily nor can they give Options/RSUs to employees.

We are in the current state due to market equilibrium driven by people’s willingness to pay, and since I personally don’t like meta or Zuck I use Reddit on Brave + Mastodon + Dev.to for my social media dopamine hits. OOP could do the same.

I don’t know how old you are but growing up in the 90s I certainly remember (parents) paying for many of these things we now take for granted. The net negative result is that independent journalism is dead.

> My question is, what’s your solution?

Legislation around mergers and acquisitions. Enforcement of existing anti-trust legislation.

That’s being done now. Can’t think of the last time the SEC didn’t sue to block an acquisition in the last 3-4 years with a tech company.

Then the legislation isn't expansive enough.

And generally users of the web want things to be free / don't want to pay directly for these utilities.

I feel like we as internet users are a big part of the math here.

I'm happy paying for a few personal cloud servers, more than I need perhaps. I'm happy paying for a solid Internet connection, electricity, computers, hard drives, UPSs, etc. I'm happy for paying for VOIP PSTN connectivity, mobile connectivity, etc.

With very few exceptions (mostly arising out of expedience), I do not pay for software. I honestly do wish the dynamics of the software ecosystem were different, so that there would be any software worth paying for. But the harsh reality is that there is a stark divide between software that represents my interests aka Libre software, and proprietary software for which it's only a matter of time of when it will betray my interests, if it isn't already doing so out of the gate. And if I'm using software that is set up to betray me, such that I have to sandbox it to mitigate it (isolated VMs etc), then why the hell should I also be paying for the privilege of that hostile relationship?

This is the underlying divide that the user surveillance industry attempts to arbitrage. Startups offer what appears to be convenient software that mostly represents users, but then once users become dependent on it, cranks up the abuse and extraction. Instead of the shareware nag screen, it's a nag dopamine drip of habituated dependency.

One of the things that really needs to happen is anti-trust enforcement to stop this bundling of hosted services with software. Any company offering a service should be required to make that service available in a programmatic way to every authorized user, such that users can always use "third party" clients. This would drastically curtail the current bait and switch dynamic.

Do you currently pay for much or any of the libre software you use? Of course many published libre software packages have no workable monetization scheme attached, but many of them have a facility for donations, and then there are major foundations and aggregators (of which I regrettably do not have a good list compiled at the moment).

Most of the time in the current era you're not paying for software. You're paying for software as a service. You're paying someone to take on the operational aspects of running a service because to you the value is in using the software, not in operating it. It's all opportunity cost.

Sure, reframing the terminology further onto the paradigm of centralization doesn't change what I said. I don't pay for software, nor services aimed at replacing what can be self-representing software.

Speaking of opportunity costs - yes, you do pay an opportunity cost to find, set up, and learn software that represents your interests. But then down the line, you continually save on opportunity costs from hostile software not continually having you over a barrel. Because while you're correct that the value comes from using the software, outsourcing the operation of it is a trap that will continually try to capture more and more of the surplus value you'd otherwise gain from using it.

We just have to take their stupid ad-based monetization scheme away, so we can just pay for what we use like in the good old times.

We can start with a law that applies to all social media systems that have more than 1M users.

That would be a nightmare. I would hate to pay for all the stuff I get for free now.

Also if the law only applied to social media >1M users?

So you said it yourself, it's not really a 100% utility as "someone" decides what is a spam and what's not. Try running an email service yourself. Being open protocol still gives leverage to someone to decide who can and cannot use the service, and who can monetize ads.

What _does_ count as a utility, then? I expect anything that is considered (or even legally classified) as a utility is going to have rules and "someone" to decide who to kick out; e.g., the electrical grid, or the water supply, or the telephone system, or council rubbish collection, etc.

The alternative is OSI or Xanadu with microtransactions for everything and every action tied to an identity.

> we view them as public utilities

Maybe that is side effect of age. I certainly do not see YouTube that way. Maybe growing up with it is different.

And when they started it seemed like a fools errand—copyright issues, giant costs (OMG, so much money down the drain), no real way to monetize at all at the time.

In other words: giant heap of risk. I had a friend that was a competitor to them (but was more on top of copyright issues, thus their downfall). This was not for the faint of heart, and the exact opposite of a public utility.

> Yes, they have to.

you say that like we don't all know it already. Most readers of this site likely work at these places.

No kidding they have to do this, if they exist. Their existence is the problem, whatever the cause.

They can monetize by presenting ads, and they can identify you with cookies when you don't log in (or later when you do). They don't need to restrict their content to monetize. It's more likely that they are restricting their content to prevent scraping and/or indexing.

It's definitely to prevent scraping. Used to be you could scrape and hydrate any profile or hashtag. It was sort of a cat and mouse thing a couple years ago and now the Instagram website is locked down tight.

And at the same time many people don’t want to pay for software.

Either you pay or you are the product.

We've seen too many times how bogus this saying is. You can pay top dollar for a high-end TV, and it'll still spy on you and show you ads in the menus [1].

You either control the software, or you are the product. No amount of Danegeld will buy you freedom.

[1] https://www.theverge.com/tldr/2021/3/10/22323790/lg-oled-tv-...

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