Tag Archives: Facebook

You Are The Product

(With invisible close buttons.)
Our grim, multicolour, flashing future.

One of the quieter announcements that Apple made during its WorldWide Developers Conference recently was that its forthcoming MacOS and iOS updates will give developers the ability to create “Content Blockers” for its mobile and desktop Safari browsers. While the exact content blocked is up to the developer (you could block the Daily Mail if you want—and you really should), no one is under any illusions as to the target of this feature: ads.

Ad blockers already exist as extensions to most existing browsers, but the majority of users probably don’t avail of them, especially in the mobile sphere. Apple’s decision to push this feature and the reaction to its quiet announcement says a lot about the current state of the mobile web and the dominant role that ads have come to play in it.

Faster computers, mobile phones and broadband have contributed to a smoother experience online, but this has helped to hide the fact that the vast majority of what we download is ads and spyware. Blocking out most of that would massively speed up browsing and have the simultaneous benefit of cutting down on the amount of activity tracked online.

As pleasant an outcome as this sounds though, there’s a downside: online advertising pays the bills for many of the sites we enjoy, some of them from smaller content providers. Killing off that revenue stream would likely kill off a lot of the richness and the niche content that the web provides. It’s not like the people running these sites are preying on you through the ads either—they’re often stuck in a system that they don’t like, making do as well as they can.

The power blocs behind online advertising inform the nature of the system and the conflict that Apple is wading into. Facebook and Google ensure that web users have access to a wealth of content for free by harvesting their data and selling it, funnelling a portion of the proceeds back to the content creators in order to keep the whole thing going. This is the system that’s driven the growth of the web to date, but it’s far from perfect, and web site bloat is just one of the symptoms.

Whatever your thoughts on Apple—you won’t look at the comments on any Apple article on a non-Apple site for long before you find mentions of ‘iSheep’ or ‘Apple fanboys’—the fact is that Apple’s profit model is completely different from that of the web titans. Apple’s iAds platform is distinctly small scale, and its money comes from the sale of hardware instead. Providing an improved user experience is vital to enhancing the sale of that hardware, and enabling the creation of content blockers achieves that.

Safari is a minority browser on desktop machines, but it’s a major player on the mobile web, and iOS users are a lucrative market. So while this initiative isn’t going to bring down the current financial underpinnings of the mobile web, it’s a definite shot across Google’s bows. (Less so Facebook, which has a closed ecosystem of its own that it can profit from.) For users, it raises the question: are we happy to receive things for free, with the understanding that we’re being sold in return, or are we going to accept that we should pay for the things we value?

There’s an interesting parallel to be seen in the U.K., where the Tory government is once again taking the knives to the public broadcaster, the BBC. U.K. TV viewers have long been accustomed to paying a TV licence, and in return they’ve gained a globally renowned service that entertains, educates, and informs. Of course, a publicly funded broadcaster has a head start over its private sector rivals, and in the view of the Tories, that’s unfair competition. Speaking as someone who was raised on a diet of BBC television, I’d call the licence fee a small price to pay, but the future that the private sector envisions could look a lot like YouTube: ostensibly free to use but scattered with pop-up ads and laden with user tracking.

When we’re offered something free, it’s convenient to overlook the fine print. We’re okay with being the product as long as it’s not thrown back in our face. It would be nice to think that users’ desire for speed and convenience would eventually find a balance with providers’ need for compensation. But while Apple’s intervention might be to our benefit, Apple doesn’t fund web content, only content provided through its own app store ecosystem. So if its ad blocking does gain traction, either we’re going to have to learn to pay for our content or some of those content providers are going to go under.


Though who knows, maybe not for long...
An old-style oculus, letting in light unaltered. Not owned by Facebook either.

Up until now, crowdfunding schemes have had one main pitfall: that even though you prepaid for something, you might not get it. Now, with Facebook’s purchase of Oculus VR, a pitfall has emerged on the other end of the success spectrum: that the thing you bought might evolve into something that maybe you wouldn’t have prepaid for in the first place.

The Oculus Rift headset was one of the biggest early success stories on Kickstarter. Virtual Reality is one of those never-was technology dreams, but Oculus’s promise was enough for backers to go for it in droves. It wasn’t just promise either: there was plenty of intelligence behind the Rift headset, and it seemed to keep improving as the months went by, with new versions of the development kit and some highly impressive game demos.

And then yesterday Facebook went and bought Oculus VR for $2 billion. This has not gone down particularly well in the technology press, either because the deal is a betrayal of Oculus’s indie roots, or simply because it makes no sense. Facebook, a company with a major games presence, albeit one that’s hardly on the cutting edge, seems to be buying into Oculus because it sees VR as a new field opening up, and with the recent announcement of Sony’s Project Morpheus, it might be right.

Still, the argument that the purchase doesn’t make much sense is a strong one. Unless Mark Zuckerberg has bought into the notion of The Matrix and sees it as the logical end point of Facebook’s parallel world of social connections, it’s not easy to guess where he’s heading with this. VR headsets may be providing increasingly realistic experiences, but they’re still bulky and obvious—only suited for home use, when you’re alone with a net connection. Vain hope it may be, but I don’t really want things to go that way.

Where VR headsets might be heading can be seen in the convergence of technologies. VR headsets replace reality with something new, which is perfect for games but isolates the user from the world around them. Augmented Reality headsets like Google Glass take the world the user is already in and layers extra information over it. Right now they’re limited in their application, but as they become more sophisticated, the tweaks they make to reality will become increasingly indistinguishable from the real thing. At some point, AR and VR are going to merge, and the choice of just how much of the real world to occlude is going to be left to the user.

With high-definition displays, motion tracking and fast response times, VR headsets are approaching the point where they can deliver a genuinely immersive experience. AR headsets are already extremely lightweight, and you don’t have to look too far in the future to see them being implanted in contact lenses. So maybe this is where Facebook is looking with its purchase of Oculus VR—not the immediate future of immersive gaming but rather the long-term play of a future in which your social world is always with you.

This could yet turn out well for everyone: Facebook certainly (?) isn’t stupid enough to kill off Oculus’s promise as something new in the world of gaming. The goodwill that the company gained over the course of its Kickstarter campaign and subsequently is gone already, but some of it could be clawed back if the hardware and its software ecosystem meet early hopes. Longer term, and more scarily, we might yet be facing a future where Facebook is always in the corner of your eye. That may not be a “Like” button that many are willing to click.

WhatsApp, Doc?

Big as $16bn is, it's small beans to Facebook.
No, I don’t spend a lot of time on these. Why do you ask?

If diplomacy is the art of saying “nice doggie” until you can find a stick, then Facebook may have found a stick big enough to deliver a final beating to the mobile network operators (MNOs).

SMS text messaging was an unexpected windfall for MNOs back at the dawn of the mobile era. Fitting 160-character text messages into unused network channels, they opened up a new revenue stream with next-to-no investment. It became such a lucrative slice of their business that they got very protective of it.

The problem is that SMS messages are pretty limited. MNO efforts to introduce an alternative in the form of the Multimedia Messaging Service (MMS) didn’t really take off, and the advent of smartphone apps and mobile data left the MMOs in the dust.

WhatsApp is probably the most successful of the text-message replacement apps, with 450 million active users at the most recent count. It’s tied to phone numbers, and it allows users to send voice, video, photos and more, as well as text messages of whatever length they like. As of yesterday, it’s in line to be purchased by Facebook for $16 billion (some reports put the price as $19 billion). That’s at least $35 per customer, however you slice it.

Whether or not WhatsApp is worth the price is beside the point. Facebook thinks it is. Why? Well, there are plenty of reasons, even beyond those 450 million users. WhatsApp is big in developing economies, where SMS costs tend to be high. It’s grown its user base faster than any other company ever and done so while remaining a relatively tiny company. The fact that it’s done so without any marketing spending indicates just how much its users like it.

However, it really is all about those 450 million users and however many it may be able to add in the future. The fact that Google is rumoured to have offered $10 billion for WhatsApp is indicative of the war for communication being waged between those two titans. Facebook has the biggest private social network out there, and WhatsApp marks a land grab among the services seeking to circumvent the MNOs’ control of how we communicate with one another.

This can’t be good news for the MNOs. They’ve been fighting a rearguard action against being turned into mere bandwidth providers ever since Apple launched the iPhone App Store, and with Google and Facebook seeking to dominate how we use the mobile space, that’s not going to get any easier in the future. Here in Ireland, companies like Vodafone, O2 and Meteor are increasingly getting shoved into the background—we get our phones from them and pay for our broadband, but beyond that? There are fewer and fewer spaces for them to make any extra money or offer extra value.

This isn’t necessarily bad for consumers, but it does steal from the MNOs one of the most valuable commodities of the modern world: data. Everything that we do online leaves a digital footprint, and what we do reveals better than anything else what we want now and what we might buy in the future. Theres money in them thar 1s and 0s. Google and Facebook want it and have a lot of it, and with the purchase of WhatsApp, Facebook will have even more, based on both our phone numbers and our contact books.

WhatsApp was founded on being a straightfoward replacement for SMS, free from ads, games or other frippery. That will inevitably change somewhere down the line, and how major the change is will affect at least to some degree how successful WhatsApp’s future will be. WhatsApp’s investors and employees have already won in this acquisition game. Facebook may well win in the future. As for us consumers, we’ll have to wait and see.