It's Mark Zuckerberg's knowledge economy now. And the rest of us just share information inside it.
It’s Mark Zuckerberg’s knowledge economy now. And the rest of us just share information inside it.
Or at least, that is how it appears to Mark Zuckerberg. Ever since Facebook FB blew away its earnings three months ago, the company’s CEO has been peppering conference calls with the term. This month, when Facebook again blew past the Street’s estimates, he and other executives used the phrase eight times.
The term “knowledge economy” has been around for a couple of decades. In the 1990s, it was one of those infuriatingly vague buzzwords favored by writers and consultants who gave it such a broad definition it ultimately had little meaning. The age of information was dawning, its primary raw material was creative brainpower. But there was little to say beyond that.
In the past decade, academics began taking a harder look at the term. In 2004, Stanford’s Walter Powell defined it as “knowledge-intensive activities that contribute to an accelerated pace of technical and scientific advance, as well as rapid obsolescence.” But knowledge as capital remained as intangible and hard to measure as ever, and the evidence of its innovations were largely anecdotal.
In appropriating the term to describe Facebook’s long-term strategy, Zuckerberg has refined the definition. In a Washington Post op-ed last April, Zuckerberg wrote that “Today’s economy … is based primarily on knowledge and ideas — resources that are renewable and available to everyone.”
With the op-ed, Zuckerberg was announcing FWD.us, a lobbying group advocating for immigration reform and other issues like science research and education. The vision was U.S.-centric, with statements like, “A knowledge economy can scale further, create better jobs and provide a higher quality of living for everyone in our nation.”
In a July earnings call, Zuckerberg shifted the scope of his knowledge economy to embrace a global workforce. Now, the knowledge economy involved a “platform to support a larger economic shift in the world based on knowledge and information.” The knowledge economy was about creating information-oriented jobs.
In the most recent quarter, after an even more impressive earnings report, Zuckerbeg expanded further on his pet concept. The knowledge economy, he said, “is about helping people create growth in jobs and supporting a larger economic shift in the world based on information and ideas.” Now, the term had taken on both idealistic and commercially pragmatic aspects.
Viewed another way, however, the knowledge economy can be boiled down to selling more and better ads.
Whether high-minded or not, this new rallying cry matters to Facebook, because it not only shows that the company is in business for the long haul, it also shows how Facebook is scaling up its ambitions. Getting 5 billion people online is a noble way of saying Zuckerberg wants them, and detailed information about them, on Facebook.
None of this is a radical shift from the early days of Facebook, but rather a dramatic expansion of its goals. First, Zuckerberg built Facebook’s site into a global social network that attracted 1.2 billion members, with 727 million of them coming back every day. Next, Facebook found a way to monetize their activity by serving ads into their mobile feeds with few complaints and, ideally, with more user engagement.
Now Facebook wants to scale that success up to a massive degree, making ads more relevant to an audience several billion large. This has to be one of the more audacious corporate missions, but it’s certainly not the first.
Facebook’s knowledge-economy mission is similar to Google’s GOOG longstanding goal to organize the world’s information. The very term echoes Google’s Knowledge Graph, a technology aiming to make search more intuitive and informative. None of this is accidental. Both companies want to be the primary means of accessing desired information online, and both are saying so in simply stated but wildly ambitious rhetoric.
Not long ago, the task of handling the ever-expanding ocean of online information was Google’s golden ring to grab. Now that Facebook is gaining traction in mobile ads, the company is beginning to reach for it too. And like Google, it’s amassing the cash and talent to try and make it happen. Whatever mottoes are involved, a two-horse race that could play out for decades has begun.