How Web Platforms Collapse: The Facebook Case Study

Or ten times Mark Zuckerberg jerked me around

Most companies fail because of competition. They simply aren’t fast enough or smart enough to keep up with the marketplace.

But the big web platforms aren’t like that.

In many instances, they are quasi-monopolies. They are so big and powerful that they hardly need to worry about competition.

After all, who can match Google for search? Who can beat Amazon for online shopping? Who does more to keep you connected with family and friends than Facebook? Who helps you clean out the junk in your garage better than eBay?

But even the most dominant players can falter. There was a point in living memory when Sears controlled 30% of all retail spending in the US. I’m not exaggerating: three out of every ten dollars were spent at Sears.

Sears once operated 3,500 stores. Today only 22  are left. Many of my readers have never seen the inside of a Sears store.

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This happened because Sears was so big that it didn’t need to worry about competitors.

That sounds impossible. How can you fail by being too powerful? But this has happened in many instances, even on the web. There was a day when Yahoo was the leader in search. There was a day when MySpace was the dominant social network. There was a day when Tumblr was the place to share photos.

There was even a day when the two companies in total control of your access to the Internet were called Netscape and America Online.

Not anymore.

This has happened before and will happen again. The bigger they are, the harder they fall.

Magazine covers touting the successes of AOL, Digg, and Netscape

Facebook (or Meta, as it now prefers to be called) is the most intriguing story of them all. So let’s look at it as a case study in how web platforms collapse. Because what’s happening at Meta is a textbook example of how the mighty are laid low.

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WHY IS FACEBOOK COLLAPSING?

The situation at Facebook is now uglier than MC Hammer’s wardrobe closet. Meta is the worst performing stock in the S&P 500 this year. In other words, there were 499 other companies in the composite that did better—and this was a tough year all around in financial markets.

Mark Zuckerberg has personally lost more than $100 billion. In fact, he lost $11 billion in a single day. Has that ever happened before in human history? Almost exactly 12 months earlier, I’d written an article entitled “Meta Is for Losers”—but even I never envisioned losses on this scale,

Of course, there are many losers in this story—including the 11,000 workers who got fired a few days ago.

What’s going on?

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You probably think that this is the result of Zuckerberg’s fool’s bet on the Metaverse. That’s what everybody is saying. But as we shall see, the Metaverse is just a symptom not a cause.

I can actually explain the problem in one sentence:

Instead of serving users, the dominant company decides it’s better to control them.

This would never occur to a small business. The owner of your neighborhood deli or gas station has no grand plans to control people—for the simple reason that this is an impossible dream.

That’s the reason why they say: “The customer is always right.” It’s not because the customer isn’t often wrong. Customers are frequently wrong—go listen to them sometimes and cringe at the stuff they demand. But if you’re in business, you must act as if they’re right even when they aren’t. And you do learn things by listening, even (or especially) when their demands are excessive.

By the way, you succeed by listening in every sphere of your life—starting at home.

There’s a good reason why students at hospitality school are told never to use the word never—or ‘no’ or ‘can’t’ or ‘impossible’—when talking to clientele. Instead of saying: “No way, dude, we’re not putting mayonnaise on your pizza, that’s disgusting,” you offer something positive:

I wish we could do that, dude, because it does sound super tasty—but I will put extra mozzarella on your slice, and our high temperature oven will give it a kind of mayo texture.

That’s how you roll in retail.

But at Facebook, the user is always wrong.

Facebook is the Anti-Substack. If I had time, I could make that case point by point, and convince any jury.

And they aren’t the only company that believes this. Almost every day, I encounter web platforms that make changes nobody requested and nobody wants.

Why do I need to log in to Reddit to read comments? Why can’t I fix a spelling error on Twitter? Why can’t I find the names of the band members on Spotify? Why is the whole first page of Google search results sometimes filled with paid advertising? Why does TikTok send all my private data to China?

It’s obvious that these companies didn’t do focus groups or market research before making these decisions. Or if they did, they must have ignored what they learned. I can’t imagine a single Spotify user ever saying: “Please make sure you never tell me the members of the band.”

For anyone who has worked in marketing, this utter disregard of customers and market research is mind-blowing. How can they possibly make so many decisions that run counter to user preferences? You couldn’t run a laundromat that way, so how can it work with a multibillion dollar global corporation?

There’s only one reason why they do this.

They do it because they’re so dominant they actually believe that they own you. Even if they don’t say it, that’s what they think.

Instagram (part of Zuckerberg’s Meta empire) is an especially heavy handed manipulator. Why can’t I post to Instagram from my desktop computer? Why can’t I include a link in my Instagram posts? Why did they prevent me from posting because I wouldn’t tell them my date of birth? (By the way, that’s why I stopped posting on Instagram—although they could find my date of birth in a few seconds if they really wanted it so badly.)

But let’s turn to Facebook itself. It’s the poster child for this kind of arrogance.

The platform has actually removed options and reduced functionality over time. They spend a fortune in order to make the user experience worse. And they do this to increase control of users, not to serve them.

(Warning: The text below sounds like a rant. But you can’t understand why Facebook is in decline without a blow-by-blow account of this sort. And my personal case study is the one I know best.)

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The 10 Times Facebook Jerked Me Around Like a Spinning Wheel

My first encounter with disappearing functionality happened when Facebook refused to forward messages to my email address. In the early days, I could have the entire text of a Facebook message show up in my email box—which is how I like it. It’s simple and straightforward, and keeps all my correspondence in one place. But one day Facebook said tough luck.

Adding to the insult, Facebook continued to send me emails when I got a message. But the email told me I had to log into Messenger to read it. This effectively doubled my correspondence—I now got both the message and the notification, and on two separate platforms. But Facebook, like the proverbial honey badger, didn’t care. They have a higher priority, namely forcing me to log on to the site.

After this switch, I decided to opt out of Messenger. That’s when I discovered that you can’t do that. You are not allowed to participate in Facebook without also using Messenger. Once again, the platform took away my options in order to maximize its own control.

Mr. Zuckerberg’s ideal Metaverse is just a panopticon—those infamous prisons where every inmate can be scrutinized simultaneously.

Here again, there was an added insult. It took me days, and many wasted hours, before I found out that I couldn’t disable Facebook Messenger. They wouldn’t tell me that directly—I had to go to an outside source to learn what my real options were.

This, too, has become a trademark of the dominant web platforms. Those FAQs (Frequently Asked Questions) they so proudly display aren’t really designed to answer your questions. The most pressing questions are simply eliminated from the list if giving true answers are inconvenient.

Of course, you could try phoning Facebook customer service for help.

That’s a joke, in case you didn’t realize it. One of the defining marks of the dominant web platforms—the Sign of the Beast shared by all the companies that want to control you—is that there is never a phone number to call.

Let’s admire Facebook’s Help Center—where asking for help isn’t one of the options

Even more annoying was when Facebook allowed people to put events on my calendar without my permission. Musicians all over the world started inserting their concerts on my daily schedule. I’ve never used Facebook calendar, not even once, but the platform tells me that I have relied on it for 4,932 events.

This is a constant annoyance. But I haven’t even tried to opt out of Facebook Calendar, because I wasted days on trying that with Messenger, to no avail. I suspect that permanent deletion of the calendar is not allowed.

We control your messages. We control your calendar. Hey, can we take a look at your wallet?

I’ve never used Facebook’s calendar, but 4,932 events were added to it without my permission

And then there was the time Facebook forced me to set up a second account (called Ted Gioia Author) because it sets an arbitrary limit on the number of connections on my main account. Having to run two different accounts is an annoyance every day of my life. And every day I get friend requests on my main account that I have to decline—simply because of an arbitrary Facebook rule.

How about letting me decide how many people I want to connect with on Facebook?

I tell people that they can have their music go viral on Facebook. But there’s one catch. The song title has to be “Birth Marriage Anniversary Death and Funeral.”

And don’t even get me started on Facebook search. The search function has always been lousy, but the company actually removed some options recently. Not long ago, I could search Facebook posts by month and year, but now the search can only be targeted by year. I can’t think of a single good reason for them to remove that option, except that jerking people around is their trademark—like that Z that Zorro slices on your pants.

By the way, I’d rather have Mark Zuckerberg put a big Z on my denims. That would be easier to fix than the nuisances at his website.

But long before these fiascos, Facebook decided to take control of what I get to see from my family, friends, and other accounts I follow. In the early days of Facebook, I would simply scroll through my friends’ posts in reverse chronological order—starting with the newest. This was intuitive and easy to manage, but Facebook announced one day that it would improve the order in which I see posts. (They recently allowed for a chronological option, but it took years—and a growing sense of desperation at the corporate HQ—for them to loosen up their restrictions.)

The company claimed they would give me the most interesting stuff first—but the real story here was that priority on a feed can be monetized. That’s the same reason why Google fills up page one of the search results with so much crap. They brag how smart their algorithms are at deciding what to prioritize, but this hides the deeper truth—namely that they don’t want you to control your feed.

This obsession with monetizing users’ access to information has hurt Facebook much more than they realize. I know this from personal experience, because I often post the exact same item on multiple social media platforms—and this allows me to compare performance.

What I’ve learned is that Facebook is the worst by far.

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I’ll describe this in terms of a hypothetical situation:

Imagine that you came up with something amazing to share with people. Let’s pretend that you created the most amusing video in the world. Or came up with the funniest joke anyone has ever heard. Or maybe you have just experienced something remarkable that millions of people would want to know about. Or let’s assume you took a photograph that would blow people’s minds. Or perhaps you have just composed the catchiest tune ever.

You might think that social media is where to go to share this very cool thing, and watch it go viral. And, in fact, that happens on Twitter and a few other platforms. I’m not always right in forecasting which things I post will go viral, but a few times every year I will share something on Twitter that grabs people’s attention so much that it gets tens of thousands of retweets and likes. Millions of people might see it.

That’s what going viral is all about.

Now here’s the kicker. I put up that same item on my Facebook author’s page, and the company will actively work to prevent people from seeing it. And adding insult (a company specialty), they will send me an alert telling me: This post could go viral if you pay us money for promoting it.

At first glance, this just seems another way to maximize profits. And who can blame Mark Zuckerberg for wanting to get a few more dollars in his bank account? Let’s feel some pity for a guy who just lost $100 billion.

But the real devastating part of this story is that Facebook is actually preventing users from sharing the funniest joke in the world. Facebook actually hates seeing some videos go viral, even if they are the most amusing things on the web. Every day they work to prevent folks from seeing a mind-blowing photo—and many other things that can’t be monetized.

This can’t be good for the user experience. This can’t be what users want, or what they would tell the company in a focus group or via market research.

And it certainly can’t be good for business.

So I’m amused when I hear how Facebook is envious of TikTok, which has much superior user engagement. Well, duh. Of course TikTok has greater engagement—that’s because Facebook has put systems in place to prevent entertaining things from going viral. They are now scrambling to work around this tiny detail, but they won’t succeed.

I’ve reduced my Facebook posts by at least 70%, and this was the main reason. I can’t be the only person who has responded in this way.

It’s not in the company’s DNA to promote interesting things on its platform. That’s why I wasn’t surprised when Facebook’s recent attempt to imitate Substack collapsed in total failure. I knew that would happen on day one—because Facebook will never let writers go viral on the platform. Mr. Z. wants to get paid before anything goes viral, and that’s the exact opposite of Substack’s successful formula—which rewards the creator more than the platform.

When Facebook initially launched this touted publishing platform, somebody asked me what I thought about it. “Facebook has the power to give a writer access to millions of readers,” I replied, “but they will never let it happen. The entire internal structure of the company is designed to prevent this.”

The speed of the collapse, however, was surprising. Facebook announced the launch of Bulletin on June 29, 2021. Facebook announced the termination of Bulletin on October 4, 2022.

Even King Henry VIII’s wives lasted longer than that.

Of course, Facebook has to let some things bypass the algorithm. They can’t build the whole experience on promoted posts. So they decided that top priority should go to key life events.

That’s why I tell people that they can have their music go viral on Facebook. But there’s one catch. The song title has to be “Birth Marriage Anniversary Death and Funeral.” The algorithm clearly loves those words.

The end result is a Facebook feed of extraordinary banality. It still manages to keep me in touch with a few close family members and friends—and I don’t dismiss the value of that. But Facebook could be so much more.

Just consider all the exciting writers Meta signed up before launching Bulletin. These writers could have made your user feed exciting and filled with unique stuff unavailable elsewhere

But improving user experience is incompatible with the corporate culture and key strategies. Facebook is the Anti-Substack. If I had time, I could make that case point by point, and convince any jury.

I might write at some later point on how Facebook could turn around its collapsing platform, but suffice it to say that this won’t happen unless the company starts serving users rather than manipulating them.

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And I haven’t even started on the things we don’t see, but take place behind the scenes. The management team at Meta actually worries more about surveillance than the user experience.

Do you think I’m exaggerating? Trust me, the people who run the company believe in 24/7 surveillance as the single most important feature on the platform. They absolutely must monetize your participation, and can’t do that without putting you under observation (as law enforcement officials call it.)

The only difference between Facebook and a police stakeout, is that Mark Zuckerberg doesn’t need a search warrant—he’s already inside your home. So he doesn’t need to waste his time sitting outside in an unmarked car.

Oh, I forgot one more difference. A police stakeout eventually comes to an end. Facebook will keep you under surveillance for the rest of your life.  

They don’t talk much about this, but it permeates their attitudes and business strategies. The main reason why they don’t care about serving users is because the user is not the customer at Facebook. The users (you and me) are the product sold to the actual customers. We don’t even know their names.

You will notice that I haven’t even discussed the Metaverse yet. This probably surprises you—because all the news stories about Facebook’s collapsing share price have focused almost entirely on this one issue.

Let me be absolutely clear about this. I’ve said from the start that Mark Zuckerberg is making a big mistake by betting the company on the Metaverse. But the larger truth here is that his obsession with creating a virtual world is merely a symptom of the larger problems I’ve outlined above.

Facebook’s real problem is that it became so obsessed with controlling users that it lost sight of all other goals. So it makes perfect sense that they would try to create a parallel world in which they observe and control every move you make.

In other words, Mr. Zuckerberg’s ideal Metaverse is just a panopticon—those infamous prisons where every inmate can be scrutinized simultaneously. This virtual reality construct has to be appealing enough for you to submit voluntarily, but exiting won’t be easy. Just remember my experience with Facebook Messenger, where disabling the app was not an option.

The Panopticon

Everything we know about Meta makes clear that its dream Metaverse will be like Hotel California, where you can check out (at least mentally) but don’t expect to leave.

I’ve focused here on Facebook, but there’s a larger lesson here. Web platforms don’t fail because of the competition. They don’t self-destruct because they are weak. The collapse comes because they are strong. They lose the thread because of their dominance and power, which gives their leaders the mindset of authoritarian rulers.

The solution is simple: Serve the users, instead of manipulating them.

The rulers of these capitalist fiefdoms haven’t learned that lesson because they see themselves as masters of the universe. Serving others is a humbling experience, and they prefer to skip that part of their job.

But the lesson of Sears shows how even the most powerful consumer company in the world can self-destruct over the long haul. Judging by the current downward trajectory, Mark Zuckerberg may soon provide us with an even bigger example of how empires collapse.