Speaker 1: Untold numbers of journalists, politicians, technologists, and armchair experts have
Speaker 1: tackled the slippery topic of Facebook, and to be honest,
Speaker 1: I was a little wary of jumping into these boiling waters.
Speaker 1: I'm not an expert on the social network by any means,
Speaker 1: but I have reported on my share of other scandals
Speaker 1: in overall business gone bad. Like most of us, I
Speaker 1: am deeply interested in the gargantuan problem that is Facebook.
Speaker 1: So when I read the Wired article fifteen months of
Speaker 1: Fresh Hell Inside Facebook, written by my friend and class
Speaker 1: act reporter Fred Vogelstein, I knew I'd found the right
Speaker 1: guide to help us understand the story behind the story
Speaker 1: at Facebook. So Facebook, the problem of the company's power
Speaker 1: starts out sounding familiar, but then it becomes totally, incompletely unprecedented.
Speaker 1: The first thing to understand is simple, we are the product.
Speaker 1: Facebook's business model is built on getting us to spend
Speaker 1: as much time as possible on the platform, sharing as
Speaker 1: much as possible about our lives. We're essentially paying for
Speaker 1: Facebook with our attention and our data. This is by
Speaker 1: no means unique to Facebook. Every website you visit is
Speaker 1: collecting data of some sort and using it to show
Speaker 1: you better ads, or to profile you in some other way.
Speaker 1: Sometimes your data is anonymous, sometimes it's not. Sometimes it's secure. Sometimes,
Speaker 1: as we have all learned, it's not ug. It's just
Speaker 1: the way advertising and social networks than the Internet have evolved,
Speaker 1: and Facebook is the biggest player in this game. I've
Speaker 1: heard an argument that this isn't any different from the
Speaker 1: old days of television or radio. They gave us entertainment.
Speaker 1: We watch their advertising, but it is different because it's
Speaker 1: even bigger and more concentrated than you might think. One person,
Speaker 1: Mark Zuckerberg, controlling sixty percent of voting shares, says at
Speaker 1: the very top of not just one, but three of
Speaker 1: the world's major communications platforms Facebook, Instagram, and What'sapp that
Speaker 1: billions of people use every single day, and then there
Speaker 1: are the privacy shortcomings. It's like a reverse Spider Man,
Speaker 1: and with great power comes great irresponsibility. We share far
Speaker 1: more with Facebook than we ever did with our TV sets.
Speaker 1: Time and again, Facebook has purposely ignored privacy and fixated
Speaker 1: on growth. This worked for them for years, but when
Speaker 1: data leaks and privacy scandals just keep coming. When the
Speaker 1: compromised data is being used by political operatives to manipulate
Speaker 1: human behavior during elections. I think it's fair to say
Speaker 1: that Facebook's old slogan, move fast and break things, needs
Speaker 1: to be retired before Facebook breaks are very democracy. The
Speaker 1: real problem of Facebook's power is, as Facebook co founder
Speaker 1: Chris Hughes said when he wrote his Wall Street Journal
Speaker 1: op ed, It's time to break up Facebook, there is
Speaker 1: no precedent for the ability to monitor, organize, and even
Speaker 1: censor the conversations of two billion people. Something of this
Speaker 1: size has just never happened before. Exponential technology has maybe
Speaker 1: gotten out of hand. How can Facebook regulate itself? Can
Speaker 1: artificial intelligence do it instead of human intelligence? Can the
Speaker 1: ferment what role do we as humans play in the
Speaker 1: uglier aspects of how Facebook has evolved? After all, even
Speaker 1: when it's working normally, it still brings out the more
Speaker 1: divisive aspects of humanity rather than the kind and loving ones.
Speaker 1: Some might even argue that Facebook's algorithms engineer rage. Facebook
Speaker 1: might be good for its shareholders, but his Facebook a
Speaker 1: good thing for our society. Fred who I've known since
Speaker 1: our days at Fortune Magazine together, just did this massive
Speaker 1: story for Wired based on interviews with sixty five current
Speaker 1: and former employees at the company. I was so glad
Speaker 1: he made some time to talk with me, even though
Speaker 1: he's fighting a case of laryngitis. In this episode, he
Speaker 1: walks us through a story about the seismic shifts happening
Speaker 1: inside Facebook, a company trapped by its own pathologies and
Speaker 1: one with no precedent, where we are all literally writing
Speaker 1: the rules as we make or break them. We're going
Speaker 1: to start at the beginning. You've got this great line
Speaker 1: in your piece that Facebook's reputation is sinking toward junk
Speaker 1: bond status. Why Facebook is sinking toward dunk bond status
Speaker 1: Because Facebook, when you kind of cut right through, it
Speaker 1: relies on people trusting it as an organization to do
Speaker 1: the right thing, because it's asking people to give them
Speaker 1: all kinds of super personal information that they own. And
Speaker 1: Facebook has a trust problem, and I think they're working
Speaker 1: super hard to try to get it back. But trust
Speaker 1: is one of those things that is super hard to
Speaker 1: earn and easy to an easy to lose, and it
Speaker 1: requires hell of a lot of effort to kind of
Speaker 1: get back. So when it was a virtuous circle, when
Speaker 1: Facebook was gaining power and gaining users, it was a
Speaker 1: virtuous circle. But that virtuous circle has somehow turned vicious. Now,
Speaker 1: is that a way to think about it? That's absolutely
Speaker 1: the way to think about it. I Mean, one of
Speaker 1: the really fascinating things about what drove Facebook was very
Speaker 1: much the same thing that drove many of the tech
Speaker 1: companies that we've come to love or hate. It's a complicated,
Speaker 1: complicated thing, but Microsoft became the biggest, most powerful company
Speaker 1: on the planet. First it developed the operating systems that
Speaker 1: ran all the computers on our desks, and then it
Speaker 1: developed the office software that ran all the computers on
Speaker 1: our desks. And the thing about those software businesses is
Speaker 1: that they have network effects, and network effects are essentially
Speaker 1: the more valuable the network becomes the more people are
Speaker 1: on it. And Facebook essentially rode that as well. People
Speaker 1: started joining Facebook because everybody else was joining Facebook. And
Speaker 1: it started to get to the point where you go
Speaker 1: to cocktail parties and people would say, well, I did
Speaker 1: this on Facebook or that on Facebook. Didn't you see it?
Speaker 1: And if on Facebook, you weren't part of the conversation.
Speaker 1: Virtual life becoming real life and vice versa, right exactly.
Speaker 1: So I was also really struck in your story that
Speaker 1: you have these really powerful people weighing in on face
Speaker 1: Book in a way that just would have been shocking
Speaker 1: a couple of years ago. You begin with this great
Speaker 1: anecdote about George Soros taking Davos to announce that Facebook's
Speaker 1: days are numbered. You've got Brian Acton, who is the
Speaker 1: founder of WhatsApp, which was acquired by Facebook, talking about
Speaker 1: his delete Facebook hashtag. What do you make of the
Speaker 1: way things shifted so quickly? It seems one of the
Speaker 1: things that happens to big companies is they realize that
Speaker 1: they're big companies, usually a lot later than they should.
Speaker 1: It's really hard to start a company, and it's really
Speaker 1: hard to kind of grow a business to the size
Speaker 1: that Facebook grew it. And you're constantly thinking of yourself
Speaker 1: as an underdog, and you're constantly thinking that there's somebody
Speaker 1: always around the corner that's about to crush you in
Speaker 1: the marketplace, and that posture doesn't really make you think
Speaker 1: about your social responsibilities as an enormous firm with billions
Speaker 1: and billions and billions of users on the planet, and
Speaker 1: Facebook was just really slow to recognize that shift. The
Speaker 1: first sign that it was hitting Facebook hard was when
Speaker 1: Donald Trump got elected president in twenty sixteen, But I
Speaker 1: really don't think Facebook itself realized it was in that
Speaker 1: situation until the middle of two seventeen, when it became
Speaker 1: clear that the Russians had infiltrated Facebook's platform in all
Speaker 1: kinds of ways that even they were just starting to
Speaker 1: figure out that gap between self perception and reality is fascinating,
Speaker 1: or between self perception and the rest of our perception.
Speaker 1: In some ways, it's understandable, because when you're a little company,
Speaker 1: you have to think one way, and the only way
Speaker 1: to know where that line is is to really cross it.
Speaker 1: But the companies that actually survive are the ones that
Speaker 1: realize when they've crossed it and do something about it
Speaker 1: quickly once they've crossed it. And I think what we're
Speaker 1: seeing is that Facebook moved a little too slowly to
Speaker 1: tackle its image problems. I also think the image problem
Speaker 1: that Facebook faced was actually bigger than previous technology companies
Speaker 1: have run into. Microsoft and Google were super powerful and
Speaker 1: important but in their very specific niches technologies, computer, software, advertising.
Speaker 1: All of a sudden, Facebook was not only super influential
Speaker 1: in those but suddenly it was super influential in politics
Speaker 1: and international relations, and people in the intelligence community were
Speaker 1: starting to wonder, hey, what side are you on? And so,
Speaker 1: to give Facebook some credit, the issues that Facebook had
Speaker 1: to deal with when it crossed that line were bigger
Speaker 1: and more complicated than really I think any company before
Speaker 1: it has had to deal with. I was actually thinking
Speaker 1: that when you were talking that if you were to
Speaker 1: be sympathetic to them, you would say that they're reach
Speaker 1: into people's lives and their reach around the globe is
Speaker 1: just absolutely unprecedented, isn't it. I mean, has there ever
Speaker 1: been a historical analog that you can think of a
Speaker 1: company that could have awakened this kind of fear and loathing,
Speaker 1: if you will, just because of its reach into the
Speaker 1: deepest parts of our lives. I think Facebook really didn't
Speaker 1: know what it was unleashing when it was asking us
Speaker 1: to let them into our lives in the way that
Speaker 1: it did, and I think they were as surprised by
Speaker 1: the shocks as many of us were. You're almost saying
Speaker 1: there was a naivety about Facebook. They were incredibly naive,
Speaker 1: but to be fair, we let them be that way.
Speaker 1: What's going on with Facebook is bigger than Facebook. The
Speaker 1: impact that technology is having on our lives is bigger
Speaker 1: than Facebook, and I don't think Facebook really thought that way.
Speaker 1: I think they thought the same way technology companies before
Speaker 1: them thought, which is that if we stick to our knitting,
Speaker 1: everything will be fine. And I think they didn't realize
Speaker 1: that the world thinks about technology companies one way. When
Speaker 1: they're small and just a bunch of crazy entrepreneurs out
Speaker 1: there in California doing that startup thing in their t shirts,
Speaker 1: they think about them differently than when they're the top
Speaker 1: five or six most valuable companies in the planet. I
Speaker 1: actually want to back up to the people here, because
Speaker 1: you've been thinking about Facebook for years, and you've covered
Speaker 1: technology brilliantly for years. Who is Mark Zuckerberg? How would
Speaker 1: you sum him up? And have you seen him change
Speaker 1: over the years that you've been thinking about him and
Speaker 1: getting to know him and watching him. I think Mark
Speaker 1: Zuckerberg is a lot savvier than most people give him
Speaker 1: credit for. I think that Mark doesn't particularly like to
Speaker 1: be in the public eye. But the times that I've
Speaker 1: talked to him and interviewed him, you don't get the
Speaker 1: idea that he's dysfunctional as a leader and public person either.
Speaker 1: His background is technology, not sales. You know, Mark is
Speaker 1: a very sophisticated guy who can learn very quickly about
Speaker 1: what he needs to do to tackle the problems at hand.
Speaker 1: One of the problems that Bill Gates had was that
Speaker 1: he was super uncomfortable in the public eye in a
Speaker 1: way that he was not really able to control super effectively,
Speaker 1: Whereas I think that Zuck is quite able to kind
Speaker 1: of stand up in front of a room full of
Speaker 1: people and talk about all kinds of fairly human things.
Speaker 1: People talk about Zuck is if he's some kind of robot,
Speaker 1: but my interactions with him have not really been that way.
Speaker 1: And have you've seen him evolve? Is he capable of evolution?
Speaker 1: I think one of Mark Zuckerberg's biggest assets is his
Speaker 1: ability to evolve and adapt. There used to be a
Speaker 1: saying inside Facebook when the company was younger and fast
Speaker 1: growing that Facebook is the company that always does the
Speaker 1: right thing eventually. I love the pause before the word eventually. Well,
Speaker 1: but what they're trying what they're trying to say is
Speaker 1: is that we understand that we screw it up sometimes,
Speaker 1: but we're also not bad people, and we are capable
Speaker 1: of seeing the problems that we cause and doing something
Speaker 1: about them. But it's the very length of that pause
Speaker 1: that has gotten the company into trouble, right, the eventually,
Speaker 1: the pause and then the eventually that is that sums
Speaker 1: up where we are today in some ways. But you know,
Speaker 1: to be fair, part of what's happening isn't just a
Speaker 1: re examination of Facebook. It's a reexamination of the role
Speaker 1: of technology in our lives and in society that really
Speaker 1: hasn't happened for twenty years. I go back covering technology
Speaker 1: to the days that technology was sold in packages in
Speaker 1: stores on shelves. There was a time when Microsoft actually
Speaker 1: did operating systems and did versions of Office and put
Speaker 1: them in boxes and ship them to stores and sold
Speaker 1: them for money, and every two years you got a
Speaker 1: new version of whatever they were developing. And in the
Speaker 1: early two thousands, Google changed all that by saying, well,
Speaker 1: what if we gave our software away for free, paid
Speaker 1: for it with advertising, and threw it over the wall
Speaker 1: to you users, half baked in beta, so you guys
Speaker 1: can mess around with it and tell it what tell
Speaker 1: us what was wrong with it. That turned out to
Speaker 1: be a brilliant idea twenty years ago or fifteen years ago,
Speaker 1: and that's been the whole approach to thinking about technology
Speaker 1: since two thousand and two or two thousand and three,
Speaker 1: the thinking being that this technology is so interesting and
Speaker 1: useful and important that we're just going to let you
Speaker 1: guys mess around with it and see where it goes.
Speaker 1: In those days, the technology didn't have all kinds of
Speaker 1: unintended consequences that seemed particularly meaningful or bothersome. What we're
Speaker 1: discovering now, though, is that the technology that these companies
Speaker 1: are making has enormous unintended consequences. It's hell, it can
Speaker 1: turn the world inside out in a moment, and so
Speaker 1: all of a sudden, the conversation that we're having about
Speaker 1: these new technologies much more resembles the conversation that we
Speaker 1: used to add about nuclear weapons. We can build these weapons,
Speaker 1: but should we That's a fascinating analogy, and I want
Speaker 1: to come back to that. Chris Hughes said something in
Speaker 1: the op ed he wrote, arguing also that Facebook should
Speaker 1: be broken up that I thought was a really interesting line,
Speaker 1: and I thought maybe you could help unpack it. And
Speaker 1: he said, it's his very humanity that makes his unchecked
Speaker 1: power so problematic. What do you think Chris meant by that?
Speaker 1: Is what I said earlier? Mark Zuckerberg doesn't seem like
Speaker 1: a bad guy. If you really get to know Mark Zuckerberg,
Speaker 1: he's not the kind of guy that like you would say, oh,
Speaker 1: he reminds me of Joseph Stalin. He seems like a
Speaker 1: pretty regular dude. It would be really easy when you
Speaker 1: met Mark Zuckerberg to say, why are we getting so
Speaker 1: worked up? He's not such a bad guy. But that's
Speaker 1: not the problem. The problem with Zuckerberg that Chris Hughes
Speaker 1: pointed out is that no one should have that kind
Speaker 1: of power. It doesn't matter how good anybody is, how
Speaker 1: well meaning they are, no single person should have the
Speaker 1: kind of power Mark Zuckerberg has over how we see
Speaker 1: information and interact with information and interact with each other.
Speaker 1: That's the point he's making. He's saying, like it doesn't
Speaker 1: matter who he is, we need to rethink how we
Speaker 1: allow technologies and technology companies, what rules they operate in society.
Speaker 1: I was thinking it's fascinating while you were talking. There's
Speaker 1: of course famous line, absolute power corrupts absolutely, and maybe
Speaker 1: in this case the analogy is absolute infiltration infiltrates absolutely
Speaker 1: in the way in the way at which it just
Speaker 1: steeps into every aspect of our lives, right. I think
Speaker 1: part of the problem that we're having with Facebook and
Speaker 1: all these companies, but Facebook in particular, is that we
Speaker 1: still haven't decided what Facebook is. I sometimes think that
Speaker 1: the easiest solution to how we think about Facebook and
Speaker 1: the rest of the technology company, or certainly Facebook and Google,
Speaker 1: is to conclude that they are the new television networks.
Speaker 1: We've actually seen this movie before, we just don't remember it.
Speaker 1: If that's the correct analogy, then that argues for a
Speaker 1: very different set of regulation and a very different set
Speaker 1: of responsibilities, because being a TV station came with a
Speaker 1: fair amount of responsibilities back then, right, and also with
Speaker 1: limitations on size, and there were lots of TV stations,
Speaker 1: and all of that was at least for a period
Speaker 1: of time, very deliberately thought about exactly. The problem we
Speaker 1: have is that these new companies, as you'd expect, have
Speaker 1: tried to explain to us and convince us that they
Speaker 1: are entirely new and different things that nobody has seen
Speaker 1: before in humanity. And the reality is that's false. We've
Speaker 1: seen this movie completely before. It started one hundred years
Speaker 1: ago with radio and then television, and you could go
Speaker 1: back even before that and say it started with the
Speaker 1: printing press, but and the development and the telephone and
Speaker 1: the development of recording devices. I mean, Facebook just takes
Speaker 1: all of that and kind of squishes it into one thing.
Speaker 1: But that doesn't mean that it's different. In fact, it's
Speaker 1: more powerful, and you could argue that it maybe needs
Speaker 1: more regulation and rules that we had on the television
Speaker 1: networks and the telephone companies and the cable companies that
Speaker 1: we put in place back in the fifties, sixties and seventies.
Speaker 1: I want to go back to another person at Facebook
Speaker 1: in addition to Zuk, and that's Cheryl Sandberg. What do
Speaker 1: you think about her? Who is she? I think that
Speaker 1: Cheryl is one of the most impressive executives in American business,
Speaker 1: and everybody I've talked to, even the people who hate
Speaker 1: say that as well. What I can't figure out, though,
Speaker 1: is her background is sales, marketing politics. She worked for
Speaker 1: Larry Summers in Washington. She understands how society turns on
Speaker 1: things and how laws get passed and regulations get passed.
Speaker 1: And I'm a little surprised that her expertise has still
Speaker 1: left Facebook looking as flat footed as it has. So
Speaker 1: going back to your nuclear weapons analogy. In the end,
Speaker 1: a nuclear weapon is only dangerous because it's in the
Speaker 1: hands of people, right, so it is the ultimate problem
Speaker 1: all of us. In other words, if Facebook was naive
Speaker 1: in some ways counting on human nature to be better
Speaker 1: than it perhaps is are we really the problem? Some
Speaker 1: of what I think is happening here is that we
Speaker 1: as people are finally getting over our starry eyed views
Speaker 1: of the Internet in general. I think that there were
Speaker 1: a lot of people when the Internet took hold in
Speaker 1: the mid nineties. I think that there were a lot
Speaker 1: of people, and I'll include myself, who believe that the
Speaker 1: Internet would change the world in only good ways, because
Speaker 1: how could a technology that allowed people access to information
Speaker 1: everywhere and anywhere not be a good thing? And we
Speaker 1: all thought that the world was going to be a
Speaker 1: better place, and we allowed technology companies to convince us
Speaker 1: of that as we moved forward. And guess what, the
Speaker 1: Internet and Facebook we're realizing are just another tool. They're
Speaker 1: like the telephone, they're like the wheel, they're like fire.
Speaker 1: You don't get a free ride humanity when it's all connected,
Speaker 1: and when you can put information anywhere, we'll figure out
Speaker 1: a way to mess up the same way it's been
Speaker 1: doing since Adam and Eve. Humans are just like this.
Speaker 1: It will be really beautiful and it will be really ugly.
Speaker 1: There is this other component. So I accept that some
Speaker 1: of us, and this nastiness that is part of human nature,
Speaker 1: is to blame for where we are. But then you
Speaker 1: layer on top of this. Facebook has always had this
Speaker 1: just relentless drive for growth. Why is that? Where does
Speaker 1: that come from? Because I don't get the impression, and
Speaker 1: you would know better that Mark Zuckerberg's primary goal is
Speaker 1: being rich. I think it all goes back to the
Speaker 1: power of network effects. I think Facebook realized early on
Speaker 1: that the more people who used Facebook, the more people
Speaker 1: used Facebook. And so if you think that way, and
Speaker 1: your business is going to be driven by advertising, which
Speaker 1: means eyeballs. By definition, getting as many eyeballs as possible
Speaker 1: becomes your reason for existing, right, It's like oxygen. It
Speaker 1: becomes something you need for survival, or at least that
Speaker 1: you perceive you need for survival exactly. So I think
Speaker 1: Facebook just went after growth the way you'd expect any
Speaker 1: engineers to go after growth. They actually looked at the problem,
Speaker 1: applied all kinds of math and algorithms, and tried to
Speaker 1: systematize it. And they did a really really, really good
Speaker 1: job using the tools that they had and the brains
Speaker 1: on their heads. But I think Zuckerberg never really thought
Speaker 1: of himself needing to be a zillionaire that he is.
Speaker 1: But that's actually kind of true about almost every super
Speaker 1: successful entrepreneur in Silicon Valley that I've run into. The
Speaker 1: ones that really see building a company as a get
Speaker 1: rich quick mechanism are the ones that don't usually do
Speaker 1: so well. The guys that do really well are the
Speaker 1: guys that build companies because they're not set up to
Speaker 1: do anything else. It's like breathing today. And yet it
Speaker 1: creates a conundrum of sorts, which is where Facebook is now.
Speaker 1: I think Zuckerberg writes this essay, this three thousand word
Speaker 1: essay that's kind of vague. It sounds really nice, but
Speaker 1: about how the company is going to be a lot
Speaker 1: more privacy focused going forward, and it's realized that people
Speaker 1: people need privacy. Yet at the same time, the company
Speaker 1: makes its money off selling our personal data off advertising.
Speaker 1: And so one critic responded to the piece. He wrote
Speaker 1: that the essay is a power grab disguised as an
Speaker 1: act of contrition. Do you think that's fair? Is that no?
Speaker 1: I think it's totally fair. I actually think that one
Speaker 1: of the things that Zuckerberg has done, very very very
Speaker 1: well has been to master the art of apologizing. Zuckerberg's
Speaker 1: gift beyond engineering, and maybe even more than his gift
Speaker 1: of engineering, is to understand that humans care a lot
Speaker 1: less about privacy than they say they do, and a
Speaker 1: lot more about interacting with each other than they say
Speaker 1: they do. You think that's still true today. I think
Speaker 1: that that's still true today. I think that that's when
Speaker 1: you kind of cut right through it. That's Zuckerberg's incredible brilliance. Basically,
Speaker 1: when you think about the history of Facebook, this rea
Speaker 1: Facebook is. It is of Zuck doing all kinds of
Speaker 1: things to push people to do things that initially they
Speaker 1: thought seemed awful and preposterous and that they didn't want
Speaker 1: to do, and Zuck telling them to breathe, and them
Speaker 1: breathing and realizing that he was giving them something that
Speaker 1: they really wanted. It's happened again and again and again
Speaker 1: and again. It's astonishing when you think about it. Think
Speaker 1: about Facebook when it started fifteen years ago. The idea
Speaker 1: that you would put all your personal information on some
Speaker 1: the server and connect with a bunch of people that
Speaker 1: you knew and didn't know. It's like nobody would have
Speaker 1: done that. It was like it seemed preposterous. The idea
Speaker 1: of Facebook seemed completely preposterous. Interesting, how far he's moved us, Right,
Speaker 1: He's moved us because he understood us better than we
Speaker 1: understand ourselves. But doesn't that create a problem today if
Speaker 1: there is and maybe based on what you're saying, it's
Speaker 1: more of an if than an absolute, If there is
Speaker 1: this pressure for more privacy, for less data sharing, if
Speaker 1: that is the direction that Facebook is going to go.
Speaker 1: Whether or not Mark Zuckerberg cares about the money, his
Speaker 1: shareholders care a lot about the money, and you chart
Speaker 1: in your story the employee reaction to the stocks up
Speaker 1: and downs. The employees care a lot about the stock
Speaker 1: price because so many of them, that's the majority of
Speaker 1: their wealth is tied up in that. What element of
Speaker 1: complexity does that add to Facebook's maneuvering going forward? Doesn't
Speaker 1: that tie their hands? Well? Actually, what's really interesting about
Speaker 1: Facebook going forward is that it's going to be a
Speaker 1: very different company over the course of the next five years.
Speaker 1: We're starting to see signs of that already. A lot
Speaker 1: of people are focusing on Zuckerberg's move to privacy as
Speaker 1: being driven by his reaction to the world as it
Speaker 1: is today, and I think that that's true. But I
Speaker 1: also think that Zuckerberg has a grand plan for taking
Speaker 1: Facebook to the next level that we're only just starting
Speaker 1: to get glimpses of. The conversation that we've been having
Speaker 1: about Facebook right now is that Facebook is going to
Speaker 1: be a company driven primarily by advertising. But when you
Speaker 1: actually stop and think about it the long term future
Speaker 1: of Facebook, it can't keep growing and being dependent solely
Speaker 1: on advertising because at some point and in the not
Speaker 1: too distant future, it'll run out of people to advertise to.
Speaker 1: Half of all advertising generally is now online. I think
Speaker 1: it's probably fair to say that, given current growth rates,
Speaker 1: in the next five years, most of the rest of
Speaker 1: it will come online. Facebook has about thirty percent of
Speaker 1: that market, so you can actually do the math. So
Speaker 1: when you look at what Zuckerberg is talking about visa
Speaker 1: VI privacy, it's also a rethinking about how Facebook is
Speaker 1: gonna make money going forward. I was super interested to
Speaker 1: note people have been talking about Facebook's plans with crypto
Speaker 1: for a long time, wondering what that's gonna look like. Well,
Speaker 1: we're now starting to get a pretty good look of
Speaker 1: what's that's gonna look like. Facebook's gonna try to become
Speaker 1: the transaction system for the third world. When you stop
Speaker 1: and think about it, Facebook isn't really likely to be
Speaker 1: able to monetize India, China and the rest of the
Speaker 1: non European and United States world with advertising. What do
Speaker 1: those companies really need. They need a better way to
Speaker 1: do transactions online. And I was particularly struck by the
Speaker 1: fact that Facebook has signed up Visa and PayPal and
Speaker 1: MasterCard in it's soon to be launch efforts in the
Speaker 1: world of bitcoin and crypto, because the thing that everybody
Speaker 1: forgets about bitcoin and crypto is that it's not just
Speaker 1: some speculative game. It's a whole new way of thinking
Speaker 1: about privacy, identity, security. And if Facebook can do that,
Speaker 1: it's all of a sudden going to become the biggest
Speaker 1: bank on the entire planet. It'll have to be regulated
Speaker 1: pretty heavily if it's going to do that. On the
Speaker 1: other hand, getting regulated pretty heavily so that you can
Speaker 1: get a teeny bit of a transaction volume of two
Speaker 1: billion people online is a pretty good way to make
Speaker 1: a lot of debating Facebook. Facebook is shifting and mutating
Speaker 1: and becoming something else. Just back to this privacy issue, though,
Speaker 1: because it is so top of mind for where we
Speaker 1: are today, that in the middle of August, Facebook prototype
Speaker 1: this location tracking service inside of Instagram, which is the
Speaker 1: very thing that Instagram had been fighting against for a
Speaker 1: long time. Doesn't that prove that everything Zuckerberg is saying
Speaker 1: about increased privacy a sort of bs. They'll do what
Speaker 1: they can get away with. Yes, yes, But I think
Speaker 1: that one of the things that we discovered in our
Speaker 1: reporting about Instagram is that Instagram, like WhatsApp, turned out
Speaker 1: to be an incredible act of forward thinking by Facebook.
Speaker 1: There are still zillions of people who talk about how
Speaker 1: much they hate Facebook and love Instagram without realizing that
Speaker 1: Facebook owns Instagram, and outside of the United States, the
Speaker 1: world communicates on WhatsApp, and I don't know how many
Speaker 1: people think about the fact that it's owned by Facebook
Speaker 1: as well. You have to hand it to Zuckerberg seeing
Speaker 1: where the world was heading and getting Facebook involved in
Speaker 1: all of that, contrasted to some of Microsoft's disastrous acquisitions.
Speaker 1: Contrast it to Yahoo's attempts to save itself by acquiring
Speaker 1: its way out right. I mean, you look at what
Speaker 1: Zuckerberg was able to pick and pick early, and it's
Speaker 1: pretty astonishing going back to something else, to news feed
Speaker 1: and the changes there and the impact on publishers. Can
Speaker 1: Facebook survive if our world doesn't survive? Or am I
Speaker 1: giving us too much credit? Well? In other words, if
Speaker 1: newspapers go away, if print goes away, if content goes away,
Speaker 1: can Facebook survive? And do they recognize that they do
Speaker 1: they need us or have we become just an appendage
Speaker 1: that can be chopped off? Oh? Wow, you're going to
Speaker 1: make answer that question, aren't you? Sorry? I think the
Speaker 1: reason Facebook seems a little schizophrenic about the media business,
Speaker 1: whether it be newspapers or magazines or television, is that
Speaker 1: the people who are making decisions inside of Facebook about
Speaker 1: those things still don't completely agree about what Facebook's role
Speaker 1: should be. So the reason it looks like they keep
Speaker 1: going back and forth and back and forth and how
Speaker 1: they kind of deal with the media business is because
Speaker 1: that's actually what's going on inside. They've hired some very
Speaker 1: very savvy former journalists to help them plan what they're
Speaker 1: going to do and have started some very very interesting
Speaker 1: projects that would allow them to be super helpful to
Speaker 1: the media business. But there are other forces inside of Facebook,
Speaker 1: like Mark Zuckerberg himself, who see Facebook as more of
Speaker 1: a disruptive force rather than as a supportive force. When
Speaker 1: I interviewed Zuckerberg early on in two thousand and six
Speaker 1: and seven and two thousand and nine, he would talk
Speaker 1: about the impact that Facebook would have on the media
Speaker 1: business as one of disaggregation. He really thought that Facebook's
Speaker 1: role would be to keep the New York Times or
Speaker 1: the Washington Post, or the La Times or the Wall
Speaker 1: Street Journal of the Financial Times from being the centralized
Speaker 1: source of people's information. In Zuck's view, the best way
Speaker 1: for the public to be informed was to be informed
Speaker 1: by their friends. And I actually think what's really interesting
Speaker 1: is that Facebook has actually done a lot of what
Speaker 1: Zuckerberg talked about super early on, and now some of
Speaker 1: the conversations that we're having are whether or not that
Speaker 1: was such a good idea, Because ultimately, if your information
Speaker 1: is really truly only getting sourced from your friends as
Speaker 1: opposed to a handful of professional sources of information, essentially
Speaker 1: what you got is information being distributed by mob rule,
Speaker 1: and that has a lot of complexities for the future
Speaker 1: of the world. Facebook made this really pivotal change to
Speaker 1: its news feed algorithm to focus on tragedy, crime, and politics.
Speaker 1: What do you think the impact of that was. Facebook's
Speaker 1: basic problem is is that they think like engineers, not
Speaker 1: like media people, and so when they make decisions about stuff,
Speaker 1: they think about them like engineers. So Facebook two years
Speaker 1: ago realized that it had a problem with its news
Speaker 1: feed algorithm because the news feed algorithm was sending all
Speaker 1: the least accurate stories and clickbaity stories to the top
Speaker 1: of everybody's news feed. And so in an effort to
Speaker 1: fix that problem, they try to categorize information so that
Speaker 1: the algorithm that couldn't actually do what it needed to
Speaker 1: do and understand how to reorient the news in people's
Speaker 1: news feed. The only problem was is that they weren't
Speaker 1: smart enough to come up with any other categories besides politics, crime,
Speaker 1: and tragedy for what constituted news. Well, so if the
Speaker 1: only news that you have labeled is news that are
Speaker 1: related to politics, crime, and tragedy, you haven't fixed the
Speaker 1: problem at all. You've created a whole new set of problems. Right,
Speaker 1: and you've actually created an outrage machine in some ways.
Speaker 1: A last question for you, thinking about five years from now,
Speaker 1: where do you think we are. Do you think Facebook
Speaker 1: has been broken up? Do you think their new regulations
Speaker 1: in place? Or do you think Facebook, per your earlier comments,
Speaker 1: is just no longer Facebook. It's become something else entirely
Speaker 1: and has sort of slipped out from under the web
Speaker 1: of anger that looks to ensnare the current Facebook. I
Speaker 1: actually don't think that Facebook is going to get broken
Speaker 1: up because I think that breaking up a company is
Speaker 1: a really, really, really hard thing to do by force.
Speaker 1: I mean, it's happened before, but it takes a super
Speaker 1: long time, the company fights it in court, and by
Speaker 1: the time you wind up with some resolution, the solution
Speaker 1: that you were seeking doesn't matter anymore because ten years
Speaker 1: has gone by. And that's especially true when you're dealing
Speaker 1: with technology companies. But I do think that we're going
Speaker 1: to have regulations that change the way things are done,
Speaker 1: and I do think that the technology world will evolve
Speaker 1: in a way that Facebook is not necessarily the dominant player.
Speaker 1: In One of the things that it's hard not to
Speaker 1: be a believer. I believe in regulation, and I believe
Speaker 1: in regulation of technology companies, but I'm also keenly aware
Speaker 1: of the fact that the world that the only way
Speaker 1: that works as if the regulations get done quickly and
Speaker 1: get done in very precise and small ways, because it
Speaker 1: is also true that the technology world moves so fast
Speaker 1: that sweeping regulations wind up looking completely meaningless if by
Speaker 1: the time you're done. One of the things that I'm
Speaker 1: always looking back to that makes me giggle a little
Speaker 1: bit inside is twenty one years ago, I was sitting
Speaker 1: in the Judiciary Committee's room in Washington during a hearing
Speaker 1: in front of Orne Hatch's Senate Judiciary Committee. Bill Gates
Speaker 1: was sitting at the witness table. The room was packed,
Speaker 1: and somebody, maybe it was Hatch, asked Bill Gates whether
Speaker 1: or not Microsoft was a monopoly and whether or not
Speaker 1: the government should do anything about that. And Bill Gates said,
Speaker 1: without missing a beat, not only that Microsoft was not
Speaker 1: a monopoly and that the government shouldn't do anything about that,
Speaker 1: but that he was not only not complacent at that point,
Speaker 1: but actually super terrified because there was a company right then,
Speaker 1: probably starting in its garage, that would come up with
Speaker 1: a new way of thinking about the future of computing
Speaker 1: that would render Microsoft relatively obsolete, and he was absolutely right.
Speaker 1: He didn't know it at the time, but he was
Speaker 1: talking about Google, which started in nineteen ninety eight. The
Speaker 1: technology world moves incredibly fast, and Facebook is the most
Speaker 1: dominant technology company in many ways right now that we've seen.
Speaker 1: But that doesn't mean it's going to be that way forever,
Speaker 1: even though it looks that way right now. What struck
Speaker 1: me most of my conversation with Fred is that by
Speaker 1: obsessing about Facebook and privacy, we may all be focusing
Speaker 1: on the wrong thing. History is replete with regulators who
Speaker 1: are building weapons to the last war instead of getting
Speaker 1: ahead of the next war. It's the imaginal line, an
Speaker 1: overused meme, yes, but an OsO apropos one. By making
Speaker 1: plans to offer a digital currency, Facebook is morphing in
Speaker 1: front of our very eyes, or at least it would
Speaker 1: be if we had our eyes open. I was also
Speaker 1: struck by Fred's comments about Mark Zuckerberg, because in the end,
Speaker 1: stories about business are owis stories about people, and if
Speaker 1: heads of corporations are more powerful than most heads of states, well,
Speaker 1: then thirty five year old Mark Zuckerberg is very powerful. Indeed,
Speaker 1: what he does with that power will help define the
Speaker 1: next decade for us. All Making a Killing is a
Speaker 1: co production of Pushkin Industries in Chalk and Blade. It's
Speaker 1: produced by Ruth Barnes and Rosie Stoffer. My executive producers
Speaker 1: are Alison McClean no relation in Making Casey. The executive
Speaker 1: producer at Pushkin is Mia Loebell. Engineering is by Jason Gambrel.
Speaker 1: Our music is by Jed Flood. Special thanks to Jacob
Speaker 1: Weisberg at Pushkin and everyone on the show. I'm Bethany
Speaker 1: mc lean. Thanks so much for listening. Find me on
Speaker 1: Twitter at Bethany mac twelve and let me know who
Speaker 1: you've enjoyed hearing from.