Nick Bilton wants his fifty bucks. The New York Times tech writer figures that’s his share of Facebook’s $100 billion valuation — based on his own contribution to the “poking, liking and sharing on the site”.
After all, Bilton argues, “without me, and the other 844,999,999 [users] Facebook would look like a scene from the postapocalyptic movie ‘The Day After Tomorrow’: bleak, desolate and really quite sad.”
Bilton is joking, of course. Or at least I hope he is. After all, only someone without even the most basic grasp of economics would think that users are owed a dime of Facebook’s big payday.
There’s no doubt that Facebook would be a dull place indeed without all those users sharing their ill-advised party photos, or stalking their ex-girlfriends or sharing their emo-angst status updates. Nor is it up for debate that Facebook’s crazy-high IPO valuation is a direct result of having attracted such a large number of addicts.
Equally, though, there’s no suggestion that Mark Zuckerberg sent stormtroopers to prospective users’ homes, threatening them with violence unless they signed up to his social network. People joined Facebook — in ludicrously large numbers — because they chose to. Because the package of free services that Facebook offers is so valuable (useful, fun, voyeuristically exciting…) that it outweighs the privacy costs and effort involved in constantly posting and liking and updating.
That quid pro quo was always clear: you surrender every last detail of your life and Facebook will improve your social and romantic prospects. Facebook won’t charge you a bean for any of this, despite the small fortune it costs to keep the service live, but will instead profit from the aggregation of millions of users. If you don’t like that deal, you don’t have to use Facebook.
Basic economics.
And yet, and yet… every time a user-generated company like Facebook has a major ‘liquidity event’, the same chorus of entitled wailing begins. It happened with YouTube, it happened with the Huffington Post, it’s happening with Facebook and you can be damned sure it’ll happen with Twitter, Tumblr, Yelp and the rest sometime soon.
Less than a month after AOL’s acquisition of the Huffington Post, Arianna Huffington was hit with a class action suit by a group of unpaid bloggers who felt they were entitled to a cut of the $315m selling price. This despite the fact that there was no suggestion that those bloggers would ever be paid for their work: they chose to use HuffPost’s platform to raise their profile, promote their agenda or any one of a hundred possible non-financial reasons. Again, no-one forced them to write for free.
Jealously is hardwired into human nature — especially when someone makes a ton of money in a relatively short space of time. That “should have been me-ism” is the curse of every successful entrepreneur and the payday of a million attorneys. It should not, however, be a position shared by serious journalists.
And that’s why I assume — hope — that Nick Bilton is joking. The idea that Mark Zuckeberg owes him a Grant is a fun premise for a column, but as a serious argument? Well..
Generally speaking, I cringe every time I see reporting of Facebook’s IPO that references Aaron Sorkin’s fictional Social Network movie. But on this occasion, there’s a line — certainly fictionalised as Sorkin has used it before — which precisely sums up the response to any Facebook user who thinks he or she is owed a payday.
“If you guys were the inventors of Facebook, you’d have invented Facebook.”
[Photo of Nick Bilton stolen from Nick Bilton's blog.]
[...] Se listează la Bursă – va plăti bani fiecărui cumpărător? Nici vorbă. (sursa 1, sursa 2)2. Facebook minte, n-are atâția utilizatori. Discuția asta a apărut relativ recent, probabil [...]
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Like[...] Nick Bilton, New York Times Tech-Schreiber, fordert 50 Dollar von Facebook-Erfinder Mark Zuckerberg. Das sei schließlich sein Anteil dafür, dass er persönliche Informationen in Facebook eingestellt und mit zur Popularität des Netzwerks beigetragen habe – ausgehend von einer 100 Milliarden Bewertung und 845 Millionen Nutzern. Paul Carr, Kolumnist bei Pando Daily wiederspricht Bilton und zitiert eine Zeile aus dem Film “The Social Network”: “If you guys were the inventors of Facebook, you’d have invented Facebook.” NYT, Pando Daily [...]
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LikeI post on a number of tech blogs, and generally so far, I've found the standard of comment on here to be the highest anywhere on the net. But this article has precipitated a slight tipping towards the less well thought-out response. It has also served to demonstrate how very very naive the majority of people are. In 1925 Adolf Hitler [yes, the conversation has reached that point], wrote in Mein Kampf, about the use of a lie so "colossal" that no one would believe that someone "could have the impudence to distort the truth so infamously." The dangerous fool asserted the technique was used by Jews to unfairly blame Germany's loss in World War I on German Army officer Erich Ludendorff. Hitler then went on to be the most infamous exponent of 'the big lie' in many terrible ways, not least in the legend above the gates at Auschwitz: "Arbeit Macht Frei" ("Work Sets You Free"). Today we have a democratic president of the USA voting against a law to restrict the internet, but passing a law making it legal to imprison dissidents. In this environment and in this context, Facebook is so Orwellian, it's almost too ludicrous to be fiction. It's already a gift to the ordinary arms of law enforcement in catching dumb criminals. But it's a much bigger gift to those other agencies who would rather we sat home and watched TV, than turn up at a meeting on a university campus. We're sleepwalking into a surveillance nightmare, in which we volunteered the evidence they will use to incriminate us. The fact that a 27 year old university dropout [who has settled with those who claim he stole their idea], is also making billions from the exercise, is ironic in the extreme. Where's the official 'lie' connection today? Well there isn't one. We no longer even need to be lied to before we accept total subjugation - we allow it by consent... by checking a little box in which we ourselves lie - claiming we've read and understand what we're agreeing to!
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LikeThe difference is consent. Orwell's world, and the nightmares of our own reality, were not things to which the victims consented. If Facebook becomes something you are (violently) compelled to use, then perhaps you've got a point. Until then, let's refrain from comparing it to genocide.
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LikeRuss, thank you for only half reading my comment and totally misunderstanding, presuming to have the right to determine the nature of this debate. Let me educate you. Orwell's dystopian vision in '1984' is a snapshot in time. How do you imagine that situation came into being? There had to be an element of consent, on the part of the population, if only in the form of a lack of resistance at the stages where resistance could still be effective. And resistance does not have to take the form of protest, it only needs to be aware and intelligent. We only need to recognise the roots of oppression, and the routes taken by societies to a state of being oppressed. Why do we know this? In the Netherlands during the 1930s the authorities enacted a process to record the ethnic origin and faith of its population. The motive was declared to be to ensure that any person who died in the street could be buried according to their faith. There was of course no resistance. It was, on the face of it, a thoroughly benign process... until the Germans invaded. History records that the Germans used these same records to round up Jews. We DO need to be reminded of these facts, not despite the magnitude of the event, but because of it, and because people like you are embarrassed to read them. Now in the 21st century, we are apparently in charge of the process. But it is a process that affords authorities a far greater amount of information on individuals than just their ethnic origin and faith. They know for instance that I have supported the students following the pepper spray assaults at UC Davis. I have allowed this to happen by doing so on a public forum on Facebook, having checked a tiny box declaring that I have read and understood the terms of the Facebook agreement. So the lie, if it still needs to be explained, no longer has to be expressed by authority. We the sheeple are lying to ourselves and therefore ushering in Orwell's vision ourselves.
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Like[...] Et tu, David Carr? [...]
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LikeInterestingly with Youtube I as a contributor am entitled to join the monetization (sic) program and share in the revenue produced by my own content. this year I'm looking to clear $0.08 In this case you could make the case that hosting an average user = $x, which in turn is the exact amount we charge each person to maintain the site - normailsed (sic) across each individual to save Facebook from setting up a payment process for membership. Thin, oh yes - but probably as right as anything. Looking at Facebook's revenue it's rather modest on a per user basis.
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Like[...] (and owns more than 25% of) and should probably participate in more. PandoDaily’s Paul Carr believes this is an entirely useless conversation: “People joined Facebook – in ludicrously [...]
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LikeAs someone that is involved with the development of new Applications (start-up), I think there is a general misunderstanding of the value that Facebook can provide over time. Aside from the short-term value of being able to communicate with family, friends, and peers, there is also a long-term value that can (and will) be provided as people continue to participate. I dare say that this long-term value has yet to be realized by the masses as we are just now entering a new age of Personalized Application Development (within the past year or so, maybe two). Facebook has essentially become a vast knowledge base of personalized user information encompassing an extremely large user base of interconnected individuals. Never in the history of computing has such a large amount (and depth) of personalized user data been aggregated at a single source, much less in an environment that people feel comfortable using and continue to participate in. From a developer perspective, this provides us an exciting opportunity to create a new generation of Personalized Applications that can provide a new level of value to each individual user in many different aspects of our lives (many of which have yet to be realized). This is not a shameless plug, but forward thinking individuals (and companies) will create the next generation of Personalized Applications that provide this long-term value. In this sense, the long-term value that Facebook can provide is not specifically provided by Facebook itself, but instead by the next generation of Applications built on top of Facebook that utilize this personalized data to provide a new type of personalized experience that was not possible a few years ago. So while this value may not be monetary (aka "send me $50 Zuk), it is value none-the-less. And in some cases, this value may potentially outweigh any monetary value as this next generation of Personalized Applications may very well have the capability of making our lives better, easier, and more efficient in many regards. Of course, it is still (and always has been) very important for people that use a Service such as Facebook to understand the privacy implications of the information they share. Assuming this privacy "issue" can be resolved, Facebook and other Services like Facebook (Twitter, LinkedIn, etc) will act as the building blocks for the next generation of Personalized Computing.
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LikeFacebook could also be argued to represent a very real threat to the promise of an open internet and could further be castigated as the site that blunted effective search and formalised the growing concept of walled ponds on the internet - not all on its own (and I don't believe it is some evil 'plan' it just makes economic sense), but with it's search deal with Bing it made it clear that it owns the right to search content on the site - not anyone else - despite arguably not owning that content.
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LikeOne could definitely make such an argument. On the other hand, one could also argue that such scenarios create opportunity, in this case the potential for innovative forward thinking individuals (and companies) to create solutions to solve such problems. In fact, one of the projects I'm currently working on right now (early stage) addresses this specific issue of Social and Search. One of the aspects of Facebook that really impressed me (as a person being involved with Development) was the concept of the API (which now applies to most Social Platforms such as Facebook, Twitter, LinkedIn, etc). For those that have not heard the term before, these API's allow Developers to create Applications that interface with these specific Social Platforms, thus interfacing with the users personalized data. In this sense, I think Mark Zuk is undoubtedly a forward thinker in his own right, recognizing the potential of allowing other Developers to build Applications on top of Facebook. Granted Facebook does explicitly control who can use their API's, and how they are used, this may allow the sharing of information across walled gardens (in some cases, and to some extent). It is in the hands of the next generation of Developers to recognize and utilize these capabilities to create Applications that solve the customers (users) needs. Understanding what problems the users are experiencing, and using out-of-the-box thinking to solve them are definitely valuable traits for Investors to recognize. With the correct approach, we will all be able to "get our cake and eat it too". It is just a matter of identifying and implementing the correct approach. Without the concept of the API, I would completely agree with you, and I think it would be a different story indeed. It will be interesting to see how this space evolves.
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Like[...] that tongue-in-cheek estimate were true, it could set an odd precedent and possibly deter other Internet ventures from raising money [...]
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LikeA candid question. Is this how most new blogs are birthed? I would have expected one to front-load some quality posts, accumulated ahead of the planned launch. Yes they would be slightly dated but few would knock a quality post on why Zynga would most certainly fail at capturing gambling dollars in light of the recent ruling on the UIGEA ( or why it would thrive ). There's a huge appetite for quality posts on a variety of topics. Am I missing something? Are standard fodder pieces more reliable traffic-getters? I can empathize with troll-trap posts once in a while but what's the rationale against intelligent content? Every budding actor in Hollywood knows that a career there cannot be sustained without a "one-for-me-one-for-them" method to picking scripts and projects. One for you ( and the critics ) and one for the masses (and the studio heads) Does modern professional blogging follow that ethic too? You guys have been in this game long enough to know what the meat and potatoes of the blogging world are. That's the reason I ask. Why not share the insights with us?
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LikeIf I can't get a payout from a Tumblr liquidity event, at least I'd like to be able to export my data.
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Like[...] that tongue-in-cheek estimate were true, it could set an odd precedent and possibly deter other Internet ventures from raising money [...]
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LikeHey Paul, I'm a big fan of your posts. But I do want to take a bit of issue with a few of your arguments. To begin, you write: "Equally, though, there’s no suggestion that Mark Zuckerberg sent stormtroopers to prospective users’ homes, threatening them with violence unless they signed up to his social network. People joined Facebook — in ludicrously large numbers — because they chose to." Employment contracts by law are freely entered into and still require compensation. The mere fact that people voluntarily "worked" for facebook by creating content is not a valid argument against compensation. Clearly, Facebook users are not under duress to create content. Also, you write: "That quid pro quo was always clear: you surrender every last detail of your life and Facebook will improve your social and romantic prospects. Facebook won’t charge you a bean for any of this, despite the small fortune it costs to keep the service live, but will instead profit from the aggregation of millions of users. If you don’t like that deal, you don’t have to use Facebook." The quid pro quo was not (is not) always clear. I don't think people intuitively grasp the way (and more importantly, the extent) in which their data (in the aggregate) is being monitized. And there has definitely been a lot of confusion over privacy concerns, to say the least. But I don't think it's ludicrous to suggest that people be compensated for their work, even if its done for fun or, as you mention, stalker-ish reasons. Brands are willing to compensate you for helping promote their products and services on these various content platforms. Why is it such a stretch to think that the facebook platform itself should not reward its users for their value creation, which directly benefits Facebook. Simply because Facebook owns the network does not mean that it should reap 100% of the reward. As an analogy, Apple owns a massive platform, yet they have entered into profit sharing programs for the various artists and studios that supply the content. While Facebook users are not artists in the strict sense, they are still creating valuable content. Crowdsourcing content is still a rather new phenomenon. And I don't think society has fully wrapped its collective head around the implications. So I think Nick has the right intuition that there's something just slightly odd about a very small (indeed tiny, when compared with the Facebook population) group of people extracting 100% of the value on the backs of nearly a billion contributors.
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LikeI like what you say here. I don't think your idea will catch on or that people will be paid to create content but i am surprised that copycats like diaspora haven't done revenue sharing deals in order to give an incentive to people to create as well as getting their friends involved. Good insight.
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Like"The mere fact that people voluntarily “worked” for facebook by creating content is not a valid argument against compensation" Really don't see the logic - if you signed up on the understanding that you wouldn't be compensated, then you, er, don't get compensated. If you want compensation, then try to persuade FB to compensate you or leave. Paul isn't suggesting that no-one will ever get compensated for creating content, or if they originally created content for free then they can't change their relationship with their social sites - it's just that they are certainly not entitled to compensation.
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LikeHey Robert, I don't actually believe FB users should be compensated after the fact. Clearly, legally, FB owes its users nothing (except of course a wee bit more transparency on its privacy policies, as they've done some work towards). But I'm simply arguing that in an ideal world, Facebook users would share in some of the profit. But Paul makes this argument with a strawman about forced labor, which is a strange and incorrect way to make the case.
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LikeBut you're not 'building' Facebook when you use it... you're connecting with friends, relatives, co-workers, etc. This is no different than broadcast TV – where studios and actors make money and you get entertainment for free. You're not an NBC employee in any scenario just because you watch the shows that make them rich.
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Like@Matt, you miss the point. A show -- where profits come from -- on NBC is consumed by the person. A profile -- where profits come from -- is created by the person. Creation is different than consumption.
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LikeElliott, I'd say that in broadcasting and on the web, profits actually come from the monetization of the audience, not the content. I can write profiles and little snippets of my life all over the web, but that wouldn't be worth anything. In fact, your contributions to Facebook are essentially worthless – it's your attention and time spent on the site that generates the money.
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LikeI would argue Paul simply used an extreme dramatization (sic) of some real opinions to drive a debate about an underlying concern.
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Like"Equally, though, there’s no suggestion that Mark Zuckerberg sent stormtroopers to prospective users’ homes, threatening them with violence unless they signed up to his social network. People joined Facebook — in ludicrously large numbers — because they chose to. Because the package of free services that Facebook offers is so valuable (useful, fun, voyeuristically exciting…) that it outweighs the privacy costs and effort involved in constantly posting and liking and updating." First of all, no-one signs up to Facebook. They join. No matter what Zuckerberg and his lawyers may think, there is no user contract. A binding contract consists of two wet signatures. Clicking a box next to "I have read and understand" is a very different thing. Secondly, Facebook is NOT valuable to users. It's valuable to advertisers. It's useful to users, but at what cost - in terms of lost freedom, security and yes, income. So here's the legal issue as I see it: Facebook has designed its service to monetize users' information and activity. When Facebook monetize users' information and activity, it does so without their permission in the form of a legal contract. At any time they are open to class actions to recover a share of Facebook's unearned income. Even if a court held that the original user agreement, that relies 100% upon a small box being ticked as read by each Facebook member, held the force of a contract, EVERY single subsequent change to Facebook invalidated that agreement - because none of those changees were in force at the time of joining.
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LikeYou are quite odd.
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LikeCongratulations! You've won today's Palin-Cleese That Isn't an Argument Award! In general, you'll find readers will treat your views with more seriousness if you elaborate why you think a poster's views are odd, with objective examples to back up your assertions. Then again, I think rain is wet, so who am I to say?
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LikeMike, You've already had more than your fair share of peanuts hurled through your bars, but I'd genuinely like to know what part of my post gave you cause to decide I'm "quite odd". Most so-called laws are actually statutes and are at odds with the relevant acts governing real law and the rights of individuals. For a contract to be lawful, it has to have two parties, both of whom have obligations to that contract, including rights of sanction. An internet user agreement such as Facebook's wouldn't stand up against a real class action that challenges its legitimacy under contract law. I repeat and explain my original point: Every update to Facebook's service represents a material alteration to the original agreement. Every statement that Facebook makes to its advertising customers, but does not include in a statement to its users, represents a material alteration to the original agreement. Every statement that Facebook makes to its advertising customers, but does not include in a statement to its users, but materially affects the status of users, is breach of the original agreement. Put simply [because I'm out of peanuts...] unless it was made absolutely clear that users details would be sold to third parties - without express permission or further consultation, any attempt to do so on the part of Facebook may also represent deception - fraud. If Facebook and its lawyers want the user agreement to have the strength of a contract, they have to accept that it must be subject to the constraints of a contract - principally that it cannot be varied without the express agreement of all parties. If that's evidence of "odd", please explain normality.
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LikeFantastic bit on ‘no privacy popup on subsequent updates’ and how that could be a classic threat to absolute ownership from Facebook’s standpoint. Obviously the article in reference was satire, but the presentation of certain facts around one’s creative thought makes this article a very good read overall.
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LikeThis is 2012. What year do you live in? There are plenty of examples of courts holding agreements to be binding without any wet ink involved.
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LikeName three, please.
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Like@Hal Every time a court decides a case based upon conduct (did people *act* as if a contract were signed) and the actions of a "reasonable person", it is making a determination that contract was in effect. In the vast majority of online transactions, there is no ink involved. Sometimes courts are fine with the agreements, sometimes not. It's not black and white, as you imply -- "no ink, no contract". If that were true, imagine the $billions that would have been spent trying to squeeze money from every company that does business online: clawing back AdSense dollars; annulling transactions; "untrading" stocks on E-Trade after the price went down, etc...
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LikeI can name one - http://www.agsm.edu.au/bobm/teaching/MDM/pennzoil.pdf - from a Wikipedia article on Oral Contracts In the UK you have can have an employment contract with no obligation for a written contract - these are still enforceable On the flip side it should be noted that plenty of contracts (not anywhere near a majority) are unenforceable even when written, signed and photocopied. Legal errors, clauses conflicting with unalienable rights etc
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LikeThank you for the heads-up on the date Rurik Bradbury, I've been getting it wrong... well, all year! Are you one of the people who believes that statutes are laws? You're not alone, most do. It's extreme compliance. Almost all the legislation used to control populations is unlawful. But I lack the inclination to educate people who assume, and parade ignorance as a virtue, whilst deriding others. Do some research and you'll find out what I mean.
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LikeNext up: Billboard makers that use your eyeballs to make money!
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LikeGoogle unifying its properties means you'll be able to run adsense against your own Google + account soon, effectively monetizing your social network... which means you might have a reason to post more and plus more etc...
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LikePretty sure it wasn't a satire or a jest, micro employment is a phrase pretty sure we're going to see more of, whatever shares derive revenue that we know there are metrics to confirm, is the future. pinterest illustrates this right now, if you click gifts, goto a price range, click on a picture there's a link next to the poster's (pinner's), now some of the links take you to the point of purchase screen specific to the item, some do not, those that do, deserve compensation as well as incentive. Logical non? the electronic cycles of cliche's to artforms to archetype, occur quickly now, your referencing bilton's article, taking the pic, your interest is being served, your context is already established by his work, your offering an opinion and showcase of the rhetoric of your pov which i still don't know, can't just the last paragraph for you i guess. anyways, between bilton's article, this guy http://techcrunch.com/2012/02/04/labor-efficiency-the-next-great-internet-disruption/ and something someone has yet to press send for, micro employment via indexing is what blogs were, minus the chore of the whole stringing together words thing, which is so 2012, i'm speaking from dec 22, 2012, the end of the world is the end of text as the main means expression. its all bricolage all the time, from this point forward, and of course, your welcome, my phd thesis will be entitled Digital Feral Children
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LikeWhat a curious mixture of buzzwords, Claude Levi-Strauss and poor grammar.
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LikeDigital Feral Children is a great name for a band.
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LikeI too believe the NYT article was in jest, nothing to get upset about and not worth such a long rant.
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Like'Bilton is joking, of course." Was the class action against Huffpost also in jest?
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LikeOh, it was a joke all right, I'm just not sure the plaintiffs were in on it.
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LikeI'm pretty sure the NYT article is satire.
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Like