It turns out moving fast and breaking things might not be the best business model.
The obnoxious phrase is Facebook’s, and I’ll come back to the “social media” company in a moment. But the expression popped into my head when I read about the hundreds of job losses at former new-media darling BuzzFeed. The layoffs are in the name of profitability, which BuzzFeed hasn’t achieved despite half a billion dollars in investments.
BuzzFeed and Facebook are inextricably linked, for good and ill. Just like Zynga (who?) before it, BuzzFeed rose to prominence by being popular on Facebook. So popular in fact, that much of the rest of the journalism world either got suckered into or felt pressured to ape BuzzFeed’s listicle-addled virality—a word founder Jonah Peretti all but invented. The amazingly prolific and clear thinking Jill Lepore lays out the case nicely in The New Yorker for the damage BuzzFeed did by dragging its betters into the gutter with it.
So “successful” was BuzzFeed’s strategy that quality publications needed to mimic it, right down to the click-baity headlines and allowing its stories to be shared for free on Facebook. I know a certain prominent magazine company, of blessed memory, that invested tremendous resources into placing videos on Facebook even when no revenues would come from the effort. “Building audience” was considered worth it because, well, it worked for BuzzFeed. Duh.
A few publications, like The New York Times, wised up in time. Though it kept its newfound edge—give BuzzFeed credit where it’s due—The Times pivoted away from chasing its digital tail and toward subscriptions. Donald Trump’s ravings notwithstanding—hell, quite literally thanks to Donald Trump’s ravings—it is thriving. The Times’ own straight-down-the-middle story on the BuzzFeed layoffs said the unprofitable company, with 1,300 employees, had 2018 revenues of $300 million. The profitable New York Times Company had nearly double the revenue-per-employee figure in 2017.
If there’s anything to be learned here it is to be suspect of companies that are killing it while spending their investors’ money without needing to make profits. BuzzFeed used some of its venture-capital scores to produce some fine journalism, and the fear is that its quest for profitability will nix that effort. I take no pleasure in that prospect.
As for Facebook, someone commented to me recently that the company will need to rebuild itself brick by brick. That’s a funny metaphor. Facebook is another company that played by new rules, as if rebar embedded in concrete, following building codes, was so passé. If you move fast and break things there ultimately will be a price.
I’ve long had a homophone problem, and spellchecking programs don’t catch homophone mistakes. So thank you to the reader who wrote to remind me I didn’t “wrap” Facebook on the knuckles in an earlier essay. “You ‘rapped’ them on the knuckles,” he wrote. Then he added: “Spoken as one who was rapped on the knuckles by a nun as an 18-year-old-college freshman at a Catholic university (apparently the nun didn’t find my ability to provide smart-alecky remarks in Spanish, the language we were studying, nearly as entertaining as I did).”
Have a good weekend.
Fingers in the dam. Calls for the government to pursue tech giants are metastasizing. Nine privacy groups asked the Federal Trade Commission to break up Facebook. A group of 15 senators asked the FTC to investigate the sale of customers’ mobile phone location data. And the Defense Department is reportedly probing whether anything improper happened in the awarding of its $10 billion cloud computing contract to Amazon after learning that a former Amazon employee may have worked on the deal at the Pentagon. But in Davos, Alibaba co-founder Jack Ma argued against too much regulation of tech, saying: “We know so little about the future.”
Your own worst enemy. Critics of the tech giants got more ammunition this week, as well. Facebook may have been trying to dupe kids into to spending more on online games, the Center for Investigative Reporting reports. Also, a new study by MIT’s Joy Buolamwini finds Amazon’s Rekognition facial ID system struggles with female and dark-skinned faces. And Google was pushing the National Labor Relations Board to reverse a decision giving workers more rights to use workplace email systems for organizing and protesting.
Spending money. The gig economy is aiding some furloughed federal workers. Uber CEO Dara Khosrowshahi tells CNBC that some are moonlighting as drivers. The trend is “definitely happening in D.C. and it’s happening to the most needy,” he said. “This is most definitely not how we want new driver partners to join the platform.”
Big brother. Are you as sanguine about the widespread and extensive monitoring of employees by employers as this headline writer: “Why Your Employer Is Spying on You—And Why That Might Be Okay.” A survey by Accenture found over half of the big companies, in more than a dozen industries, using some form of technology to monitor employees’ daily movements, actions, and even state of mind.
Open for business. Reversing yesterday’s news, Chinese Internet users could again access Microsoft’s Bing search engine on Friday, a day after the site inexplicably went offline.
Shrinking fortunes. On Wall Street, Intel reported a fine fourth quarter but projected weaker-than-expected sales for 2019. Quarterly revenue rose 9% to $18.7 billion and adjusted earnings per share increased 18% to $1.28. But 2019 annual revenue will gain just 1% to an estimated $71.5 billion, Intel said, citing weakness in China and slowing spending by the big cloud providers. Intel stock, up 11% over the past year, fell 6% in premarket trading on Friday.
Would you like fries with that? How about Mark Zuckerberg’s food choices? Twitter CEO Jack Dorsey tells Rolling Stone that he had dinner with Zuck and the Facebook exec served a goat he had personally killed. Link to the full interview is below in the long weekend reads section.
FOR YOUR WEEKEND READING PLEASURE
A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:
Life Without the Tech Giants (Gizmodo)
This is a story of how, over six weeks, I cut them out of my own life and tried to prevent them from knowing about me or monetizing me in any way—not just by putting my iPhone in a drawer for a week or only buying local, but by really, truly blocking these companies from accessing me and vice versa.
Twitter CEO Jack Dorsey: The Rolling Stone Interview (Rolling Stone)
Sometimes 280 characters just aren’t enough. The social media mogul takes on his critics — and tries to explain who he really is.
The Immigrant On My Couch (Philadelphia)
My future brother-in-law has an MBA and a master’s in electrical engineering from the University of Delaware. But thanks to Trump-era immigration policies, it’s been impossible for him to get a job in America.
Amazon Knows What You Buy. And It’s Building a Big Ad Business From It. (New York Times)
When a chain of physical therapy centers wanted new patients, it aimed online ads at people near its offices who had bought knee braces recently on Amazon.
FOOD FOR THOUGHT
The panic over kids using their phones too much may be overblown. The latest massive study of the screen time phenomenon, done by researchers at the University of Oxford, has some reassuring results, Lydia Denworth writes for Scientific American:
IN CASE YOU MISSED IT
Volkswagen Is Getting Into the Electric Vehicle Battery Game By David Meyer
Facebook Plans to Shutter Moments, the Private Photo-Sharing App By Renae Reints
BEFORE YOU GO
Are you fan or zippers or do you prefer your closures to be velcro? Both have fans, but scientists are developing a third way to secure your backpack opening, based on the barbs in bird feathers. It should be ready for takeoff soon. Have a great weekend.