For Silicon Valley to survive, so too must Facebook

November 24th, 2018

There is a new, puzzling piece in The Economist that likens Facebook to Yahoo.

The gist is: if Facebook's not careful, it's going to go the way of the Y!, Instagram and WhatsApp be damned.

Nevermind the fact that Yahoo's reason for failure was a hubristic acquisition strategy, mishandling and squandering every good thing it touched.

Facebook stock is tanking, hitting its lowest point in a year last week. The company is suffering from the worst PR in its history. From child trafficking to worldwide election meddling, it's got to be hard to be Zuck right now.

But does all this mean Facebook is doomed as a company?

Some say the bloom is off the rose as far as Facebook's business model is concerned. User activity is down, and so is advertiser investment as a result. The thinking goes: if this continues, Facebook's talented employees will leave for greener pastures, and that will be the end of it.

There's just one problem: these employees will leave Facebook for... whom, exactly?

Every social network in SV is a user data company. Whatever Facebook is doing, you can be sure Google, Snap, Twitter, and LinkedIn are doing too. Zuck and his team are incredibly smart. They saw this coming years ago, which is exactly why they acquired Instagram and WhatsApp.

Unless these talented folks suddenly want to change careers, anywhere else they go, they will find themselves in the same moral dilemma.

Sure, this time could be different. Maybe the voices of a few thousand hackers saying "enough is enough" will change how revenue is generated in SV.

It worked well for Wall Street.