Day: April 1, 2018

As Goes Facebook So Goes An Entire Fallacy

Regardless of where one stands on the entire social media complex, one thing is certain: “it’s different this time” – is over.

The dirty little secret contained within that mantra that’s been used ad nauseam over these ensuing years, is there are many who built their careers, fortunes, or guru status based upon just that. i.e., “It’s different this time.”

The problem now coming to light is, well, yes it was, just not for anything they were espousing. And that’s now a very big problem for the entire social-media complex, along with tech in general. i.e., Wall Street’s now going to be asking its own very old but never-changing question in times like these. i.e., “Where’s the money?”

Social was supposed to deliver advertisers the-edge-of-all-edges. Again, it was told/sold as to deliver matches of enthusiastic eyeballs, supplied with a wallet filled with credit-cards (hopefully not already maxed out) to purchase their wares via carefully targeted ads.” How could they miss,” was the clarion call. After all, they were talking about billions, upon billions of eyeballs.

Well, they did deliver the “eyeballs” part. The only issue is that many, if not all were teenagers with no jobs, nor wallets.

To top it off, many of those that should be of precisely the “golden age” for advertisers (18-35 thereabout) were just like those of the younger cohort. i.e., no job, no wallet, no career, just school, and debt, lots of it.

The only insult to injury (for advertisers that is) was that both of these demographics despised, deplored, reviled, spurned, (no hyperbole intended) any intrusion such as an “ad” into their streams. And when it came to the demographic sets above? (i.e. 35+) Two fold whammy.

First: Those that were accustomed to ads had a built-in ignore feature honed via years of late night ads and commercial television in general. As for the rest? Advertisers, for the most part, don’t really care.

But that’s not to say social didn’t have something to offer. For it did. i.e., All their users on-line personal data. Years of it. But wait…there’s more! as they say on late night TV, Not just theirs, but their friends, their friends friends, their family members, their family members friends, and on and on. Years and years of it. Cross-referenced via other mediums, sliced, diced, you name it. Macro, micro, doesn’t matter. Heck, “You want fries with that?” You’d got fries also. Simple as that.

This data was valuable, and in so many different ways, to so many outfits: even if you didn’t post ads or use these platforms, this rich data was far rich or juicy to go without. You had to buy it. For data profiles as rich as some of the reported types that have now come to bear would de facto leave too much of a possible edge out there for your competitors to possibly use and profit by, and you not have at your disposal also. And with that there was an inherent self-energizing market that could not be ignored.

Although that is precisely what happened via the mainstream business/financial media. i.e., They ignored exactly what these platforms were actually selling.

Trust me, they knew, they just turned the ultimate blind-eye to it all. For it just didn’t fit the narrative. In other words, headlines like: “Silicon Valley Trep creates platform that connects users around the world and makes $Billions for himself in the process.” makes for much better news stories than: “Silicon Valley harvests and sells all its users data online to the highest bidder, to the tune of $Billions, making themselves filthy rich. All at the cost, and naivety, of their users privacy.” If you think I’m off base? I’ll just remind you of SnapChat’s CEO press coverage and let you make up your own mind.

For a time this all worked like magic, for it was. With the wholesale adoption and implementation of Quantitative Easing (QE) back in 2010 came another form of implementation and adoption for magical thinking. i.e., The “Unicorn for IPO riches” As long as there was QE – there was magic.

Then QE ended, and with it so to went they. The real issue here for all of this was, that if the world of unicorn riches and IPO dreams was now defunct? That meant only one thing.

Facebook would be the last bastion to make (or keep) all those “magical riches” alive. But more importantly: Safe. Hint (paraphrasing the line from Van Halen’s “And the cradle will rock“) “Have you seen Facebook’s stock?” (Cue, Eddie)

Think about it, when was the last time you heard about an IPO? Did you know Dropbox™ had one about a week ago? If you only glanced the headlines during that week, maybe. But as soon as the price fell below the IPO debut? let’s just say – they fell from the headlines and bylines also. To be fair, they have recovered marginally, but there’s no more fanfare for days and weeks on end, any more. “Decacorns?” I’ll just ask “Hows that Uber™ thing working out?” Sorry, too soon? And I won’t even mention Snap™, well, sorry there too.

But Facebook has been the last bastion, as well as last man standing, for the entire “it’s different this time” mentality. After all, if you took your cues from the Silicon Valley aficionado set, coupled with the next-in-rotation fund-manager cabal, peppered with some illustrative “insight” displayed via many of the financial shows, the obvious group-think consensus was, FB, for all intents and purposes, was the obvious winner take all of the social media paradigm.

Or said differently, they tried (and continue) to sweep-under-the-rug all their prior “insights” which resulted in abysmal failures in a quick slight-of-hand move meaning, it’s not that we were wrong per se, it’s just that there can only be one. i.e., FB is social. Period. After all, “Just look at their stock price!”

On a side note, I tuned into one of the mainstream business/financial channels Thursday just to see what topics and how they were being debated was going to be presented. After tuning in for less than 5 minutes I was hit with the sudden realization of why I can no longer watch, for one of the hosts smirkingly referenced that he did not see any trouble in tech, for it was the only sector that ended with a 2% gain.  That was until the other hosts catching the obvious misinterpretation reminded their colleague that 2% gain was the result of losing 80% of its 10% gain two weeks prior. i.e., “Shut up, you’re making us all look stupid!”

So now here we are, and guess what? Hint: It’s different this time. The only problem is that, this now means, we are going to resolve back into the meme that this one was said to replace. i.e., “Where’s my return of money investment?”

And if you don’t think this question is going to be shouted across conference tables, trading screens, and more in the coming weeks and months, you’re not paying attention. For there are some very tell-tale clues that are emerging (or maybe a better term is not?) that should tell you all you need to know as to read the “tea leaves.” First:

If FB and the entire social complex (think Google™, Twitter™, Snap™ et al.) which sells users data is either (a) No longer willing to sell that data. Or (b) No longer will be allowed to sell all that data. (Think regulation and more) That hits the bottom line in more ways than one. But probably most especially, or more importantly, it completely eviscerates the way the entire “growth story” which cloaked this sector in some form of cloak-of-invincibility type manner, is not just damaged, but more importantly, it compares along the lines of Superman losing his cape. i.e., Nothing flies or looks right from here on out. And if you can make Superman seem not so invincible? Are you seeing my point here?

One would think that if there was any form of vulnerability to FB that the obvious other players would immediately see (i.e., buyers of their stock) would suddenly materialize. Hint: I don’t think you really need one, for they all either continued their slide downward, or at best, vacillated in stuck space.

That happens only when one of two things has occurred. (1) Wall Street has lost faith in the entire sector. Or (2) Reread line 1.

Now the far more important, and in some ways, the only real question now remaining is this:

Is this upheaval confined to the entire “ads for eyeballs” complex collectively known as the “Social media complex?”

Or, is the entire “it’s different this time” ideology and meme that has been unquestioned and embraced with religious zeal, across the entire media and Wall Street landscape in toto now at risk?

If it’s the latter? There should be clues there also. And I’ll just point to both Tesla™ and Amazon™ for your contemplating pleasure.

But there is one question that has been answered long ago but has been absolutely ignored via the entirety of the mainstream business/financial media. And that is this…

If “social” and FB had so much more room to run, as was professed ad nauseam. The why has Mark, along with all his top brass, been unloading shares (in vast quantities) for months?

I’ll just bet it’s because Mark didn’t want any of those sellers to feel alone, and just wanted to make the loving gesture that he would be right in there selling along with them. After all, he’s only concerned about, “your feelings and connection.” Right?

© 2018 Mark St.Cyr