Yahoo was once the most popular website on the planet, the one place that everyone on the internet seemed to touch at least once in a web session. After a terrible slide, however, Yahoo is just another site that has some fans in certain parts of Asia and offers some niche products.
Has Mark Zuckerberg launched Facebook on a similar path?
That’s the big question investors need to start asking as Meta Platforms Inc. META,
CEO tries to change his strategy amid obvious signs of distress. After its first decline in users three months ago, Facebook reported its first quarterly revenue decline in history on Wednesday, and Zuckerberg̵[ads1]7;s response is to emulate a rival and send the company into dangerous waters that already nearly killed the platform and took America’s democracy with it.
Zuckerberg is changing his company’s core apps to rely far more on artificial intelligence to power the content users see, trying to emulate growing Chinese rival TikTok – a major shift to give the algorithm more power over what people see on Facebook and Instagram. Zuckerberg told analysts at the company’s second-quarter earnings call that Meta’s apps will rely more on its discovery engine, rather than people or things you follow, for content. That means users will see (and are already seeing) content from complete strangers in their feeds and videos, just like TikTok.
“Right now, about 15% of the content in a person’s Facebook feed, and slightly more than their Instagram feed, is recommended by our AI from people, groups or accounts you don’t follow,” Zuckerberg said. “And we expect those numbers to more than double by the end of next year.”
Facebook has been lucky to survive a string of scandals in recent years, from allowing election misinformation to run amok to selling private user data to helping spread the call to violence that led to the storming of the US capital. But apparently nothing was learned, as the company, or at least its algorithm, will now decide what content you want strangers to see.
Facebook, and the world, have already learned that bad actors will learn to game that algorithm, leading to the dominance of inflammatory posts or videos, divisive content that will pit strangers against strangers, on an even scarier scale than exists today. If we’re lucky, the result will be that the users Facebook still has will decide it’s time to travel to other online destinations, as Yahoo’s fans once did.
Although the algorithm is taking on even more responsibility for Facebook and Instagram — the content moderation aspect of both social media sites is already largely handled by AI, Zuckerberg said in response to a question on the call, showing how incapable Facebook’s technology is of succeeding in its goal – Zuckerberg will use his human capital on his dream of the “metaverse”. Zuckerberg’s grand vision is to create a digital universe populated by those who want to escape the real world of grass, flowers, air, sky, animals and people using a clunky headset so you can hang out with your friends at a digital nightclub or boardroom or wherever else you want.
Virtual reality has only proven popular with a small segment of the population, and it’s still too bulky to be adopted by the mainstream consumer, something Yahoo co-founder Jerry Yang has already learned. So instead, all those parents and grandparents at Facebook, the old Zuckerberg no longer cares about, will be taken care of by robots, while his minions focus on a new world: The unpleasant, potentially dystopian future.
Facebook and Instagram have seen tremendous growth because they appealed to the masses, not just advanced users or the technologists who develop these products. If Meta loses these users, the apps will continue their current downward spiral—digital ad decline, recession or not—much in the same way that Yahoo failed to transition to mobile, with a complex site and services that couldn’t easily adapt even if they tried to copy younger rivals, just as Facebook is doing now.
Zuckerberg is the king of Meta, with total founder control, so what he says is the law of the land—power that Yang and the parade of CEOs who took over Yahoo when he wasn’t in charge never had. No one is going to stop Zuckerberg from this bet on an algorithm-driven future, so investors must decide whether to take the chance that there is nothing ahead of him but a downward spiral to the same fate that Silicon Valley has already seen from a once-popular portal to the web.