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Facebook has more than 83 million 'fake' users

bbc.com

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Re: Facebook has more than 83 million 'fake' users

#71

Post by tatsuke95 »

klawed wrote: post #40
joshuahedlund wrote: post #39

Earlier quoted context omitted.

I've had a similar experience and similar thoughts. I'm a strong believer in free markets, etc, but sometimes I don't understand the unending need for growth (i.e. why is it considered a bad thing that Facebook is so large that it doesn't have much room for growth?) If you're large and profitable, what's wrong with that? It often seems like the relentless pursuit for growth leads to short-term decisions to increase p…

You're questioning the fundamental philosophy ow Wall Street (I almost wrote capitalism instead but I don't know if that's true). Solvency is not enough to drive stock prices because the price of a stock is a bet on the future value of the company, not the present value. I don't like it either... Edit:fixing phone-induced typos.

You can't call this a Wall Street philosophy; Facebook was trying to grow massively before they were public. In fact, that's where the growth was happening. At any point in time they could have decided to remain where they were, with the money they were making to pay the bills, and stayed private. They didn't. Instead, Facebook told us that they were going to, essentially, grow the company to 5 or 6 times the current state.

In other words, Facebook caused Facebook's problems, not Wall Street.

Re: Facebook has more than 83 million 'fake' users

#72

Post by tatsuke95 »

unreal37 wrote: post #54

I think calling them "fake" users is incorrect and misleading. The majority, as the article states, are real people with two or more accounts. Two accounts represents an easy way to separate your personal and professional lives. Instead of fretting over the privacy settings of each picture, setting up lists, using the complicated and changing processes for managing privacy on FB, the "easy" way is to create two separ…

>"I don't see how this harms Facebook in any way"

When an advertiser buys a Facebook ad, he is able to narrow down the target audience based on demographic information. Facebook then tells the advertiser the "reach" of that ad. So, if I want to advertise to Males between the ages of 18 and 24, from the UK, who like Ford, Facebook will tell me how many people my ad can reach. That's what you pay for. As an advertiser I will have historical advertising figures to calculate the ROI on this ad.

But what happens when many of the accounts I'm "reaching" aren't really male, aren't really between the ages of 18 and 24, aren't really from the UK and are owned by people who don't really like Ford? My ROI is skewed. I'm wasting money.

It bears repeating: as a Facebook user, you are not the customer. The advertiser is the customer. Users are not harmed by fake accounts, but advertisers are. If your cat Fluffy has an account, and is listed as a male, someone, somewhere is paying to advertise to him. Same goes for Bobone, Bobtwo, Bobthree and all the other accounts you've created to "add friends" in Farmville.

That's how Facebook is harmed by this.

Re: Facebook has more than 83 million 'fake' users

#73

Post by smacktoward »

joshuahedlund wrote: post #39
jgroome wrote: post #6

Been using Facebook every day since 2007. Recently though I've noticed my visits to the site drop to maybe once or twice per day, whereas at its peak I was checking it multiple times per hour. I think in their desire to work out what exactly makes them money, they've changed the way you're supposed to use the site. Where I used to see a news feed full of (mostly mundane but still interesting) status updates and photo…

I've had a similar experience and similar thoughts. I'm a strong believer in free markets, etc, but sometimes I don't understand the unending need for growth (i.e. why is it considered a bad thing that Facebook is so large that it doesn't have much room for growth?) If you're large and profitable, what's wrong with that? It often seems like the relentless pursuit for growth leads to short-term decisions to increase p…

It's part of the tradeoff of being investment-funded. Investors offer you money based on an estimate of the future value of your company. When you take the money, you now have to get the company to at least that value for them to be able to make money on their investment by selling their stake. If you can't make that happen, the investors will be very unhappy with you, possibly up to the point of using their ownership stake (or joining with other dissatisfied stakeholders) to have you tossed out and replaced with a "better" manager in order to "save the company."

In other words, "large and profitable" is enough if you're organically funded, but if you're investment-backed you have to not just be profitable, but at least as profitable as your investors predicted you would be.

In Facebook's case, those predictions could be quite large. On the pre-IPO end of things, Goldman Sachs' 2011 investment in FB, for instance, was premised on a $50 billion valuation (http://dealbook.nytimes.com/2011/01/02/goldman-invests-in-fa...) of the company. Depending on whose numbers you believe for the total number of FB shares outstanding (see http://www.businessinsider.com/facebook-shares-outstanding-2...), at $20/share their current total value is somewhere between ~$40 billion and ~$55 billion. The high end of that estimate is north of Goldman's valuation, but the stock won't have to fall much farther for Goldman to get nervous.

Similarly, when the company goes public, now you have "the markets" to deal with as investors as well. Just like VCs, public investors buy into a stock at a certain level because they believe that level represents a value less than the company will eventually be worth. And also like VCs, if your management makes that bet fail, they can and will organize to remove you, or at least make your life difficult with an activist board or other oversight mechanism. When Facebook opened for public trading, the market estimated its value at around $104 billion (http://dealbook.nytimes.com/2012/05/17/facebook-raises-16-bi...) If you bought in at that price, your investment today would only be worth a little more than half of what you paid for it. That doesn't make for happy investors.

Investors want to see a return on their investment, and they prefer to see it today rather than tomorrow. Corporate managers who want to stay corporate managers do everything they can to deliver it, and sooner rather than later. Hence the focus on short-term metrics like quarterly profits over long-term sustainability.

Re: Facebook has more than 83 million 'fake' users

#74

Post by Spooky23 »

swombat wrote: post #4

Worth noting that not all these "fakes" are bad, or even inactive or less active. For example, most performers on the Burlesque scene have accounts specifically for their Burlesque personas, with names like "Kitty Cupcake" or "Tabitha Taboo" and the like. These are obviously not their real names, but a consequence of the fact that Burlesque performers don't want the offline attention on their personal or professional…

Also worth noting that this phenomenon exists everywhere.

For example, the standards for Nielsen ratings used for (much more expensive) TV advertising are pretty lame. If you're in the same room as a powered-on television, you're considered a member of the audience.

My other question would be... does it matter? Wouldn't the ability to target burlesque folks (who are real people, just not real names in this example) with laser-like precision be more valuable than trolling for real burlesque aficionados amongst the general population?

Re: Facebook has more than 83 million 'fake' users

#75

Post by Spooky23 »

tatsuke95 wrote: post #72
unreal37 wrote: post #54

I think calling them "fake" users is incorrect and misleading. The majority, as the article states, are real people with two or more accounts. Two accounts represents an easy way to separate your personal and professional lives. Instead of fretting over the privacy settings of each picture, setting up lists, using the complicated and changing processes for managing privacy on FB, the "easy" way is to create two separ…

> "I don't see how this harms Facebook in any way" When an advertiser buys a Facebook ad, he is able to narrow down the target audience based on demographic information. Facebook then tells the advertiser the "reach" of that ad. So, if I want to advertise to Males between the ages of 18 and 24, from the UK, who like Ford, Facebook will tell me how many people my ad can reach. That's what you pay for. As an advertiser…

They need to accept that there is some ambiguity.

I subscribe to the local newspaper in my hometown, which is 500 miles away. Should the guy buying ads selling cords of firewood be pissed off because my subscription is not the norm? (a local resident in this case)

Re: Facebook has more than 83 million 'fake' users

#76

Post by checoivan »

jgroome wrote: post #6

Been using Facebook every day since 2007. Recently though I've noticed my visits to the site drop to maybe once or twice per day, whereas at its peak I was checking it multiple times per hour. I think in their desire to work out what exactly makes them money, they've changed the way you're supposed to use the site. Where I used to see a news feed full of (mostly mundane but still interesting) status updates and photo…

There was also a statistic about the percentage of people who open facebook for their dogs. I wonder if dog and stalker accounts are in that fake count, or if they do count as active as they generate puppy treat ad revenue.

Re: Facebook has more than 83 million 'fake' users

#77

Post by tsahyt »

jgroome wrote: post #6

Been using Facebook every day since 2007. Recently though I've noticed my visits to the site drop to maybe once or twice per day, whereas at its peak I was checking it multiple times per hour. I think in their desire to work out what exactly makes them money, they've changed the way you're supposed to use the site. Where I used to see a news feed full of (mostly mundane but still interesting) status updates and photo…

I already stopped using it a couple of months ago for a couple of reasons. Most notably privacy concerns upon realizing that nothing ever gets lost there. Yeah I know, as a tech person I should have known that from the start. Well, Facebook ended up with about a year and a half of my life, well documented online and stored deeply inside their database and their backups.

But as you pointed out, Facebook becomes less appealing to it's users for a variety of reasons that - I think - are all rooted in the fact that it doesn't really seem to care about what the user wants Facebook to do. That's never a good thing.

Somehow it gives the impression that FB is beginning to openly admit that users are not their customers but their product.

Re: Facebook has more than 83 million 'fake' users

#79

Post by tatsuke95 »

Spooky23 wrote: post #75
tatsuke95 wrote: post #72

Earlier quoted context omitted.

> "I don't see how this harms Facebook in any way" When an advertiser buys a Facebook ad, he is able to narrow down the target audience based on demographic information. Facebook then tells the advertiser the "reach" of that ad. So, if I want to advertise to Males between the ages of 18 and 24, from the UK, who like Ford, Facebook will tell me how many people my ad can reach. That's what you pay for. As an advertiser…

They need to accept that there is some ambiguity. I subscribe to the local newspaper in my hometown, which is 500 miles away. Should the guy buying ads selling cords of firewood be pissed off because my subscription is not the norm? (a local resident in this case)

You say "they" like this is some outside entity. It isn't. It's me, and others on these forums. And I can't really accept ambiguity.

If Facebook tells me I'm reaching 1,000,000 people, I better be reaching 1,000,000 people. If that number is really 930,000, and Facebook knows that the number is 930,000, they better be damn sure to tell me so I can calculate the correct ad-spend. As an advertiser, this figure shouldn't be ambiguous. That's kind of ridiculous.

But Facebook is in a catch-22: if they do tell me that figure, it's going to result in lower spends (and thus lower revenues) because their value comes from the massive audience. Remember, this started as "There is no fake account problem". Now it's, "Almost 10% of our accounts are fake". How big is the problem?

Re: Facebook has more than 83 million 'fake' users

#80

Post by Spooky23 »

tatsuke95 wrote: post #79
Spooky23 wrote: post #75

Earlier quoted context omitted.

They need to accept that there is some ambiguity. I subscribe to the local newspaper in my hometown, which is 500 miles away. Should the guy buying ads selling cords of firewood be pissed off because my subscription is not the norm? (a local resident in this case)

You say "they" like this is some outside entity. It isn't. It's me, and others on these forums. And I can't really accept ambiguity. If Facebook tells me I'm reaching 1,000,000 people, I better be reaching 1,000,000 people. If that number is really 930,000, and Facebook knows that the number is 930,000, they better be damn sure to tell me so I can calculate the correct ad-spend. As an advertiser, this figure shouldn'…

If you have an expectation that there will be little or no variance in a population of 1,000,000 people your expectations are not realistic. If you bought a billboard, would you get angry if a car drove past with a sleeping passenger?

Ambiguity is a given -- is Facebook defrauding you if I say I live in Manhattan, but for 3 months I'm at my summer home in Lake George, NY, 200 miles away? You probably wouldn't be happy if you were a summer venue in Manhattan paying to reach people like me.

That isn't fraud. As an advertiser, you need to do your own homework and adjust the relative effectiveness of Facebook vs. other mediums.

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