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Farhad’s and Mike’s Week in Tech: Why Facebook Can’t Count

The New York Times

The New York Times

Saturday, December 10, 2016

For the latest updates, go to nytimes.com/technology »


President-elect Donald J. Trump, demonstrating his tweeting skills in his office at Trump Tower in New York.
President-elect Donald J. Trump, demonstrating his tweeting skills in his office at Trump Tower in New York. Josh Haner/The New York Times

Farhad’s and Mike’s Week in Tech: Why Facebook Can’t Count

Each Saturday, Farhad Manjoo and Mike Isaac, technology reporters at The New York Times, review the week’s news, offering analysis and maybe a joke or two about the most important developments in the tech industry.
Farhad: Howdy, Mike! I may have trouble typing today because my fingers are frozen. It got down to 40 degrees this week in the San Francisco Bay Area. This is California. It shouldn’t get that cold.
Mike: I started turning on the electric wall heater in my house. It’s quite pleasant! Also, I can’t imagine what our East Coast or Midwest friends must think when reading about our California “cold weather.”
Farhad: It was something of a slow week in much of the tech world. But lucky for journalists, we can always count on the president-elect to make some news.
This week Donald J. Trump once again went on a Twitter rant. That’s not news, of course. But his target was slightly unusual. He criticized Chuck Jones, a union leader in Indiana who represents workers at the Carrier air-conditioning plant where Trump intervened to save people’s jobs. Jones had criticized some aspects of the deal, and Trump didn’t like it, so he accused Jones of doing a “terrible job representing workers.”
Mike: Is it wrong to admit when I first heard about this story that I immediately thought about the guy who used to draw Bugs Bunny?
Farhad: Yes, it is.
Anyway, even some Republicans argued that Trump was “cyberbullying” Jones. In response, Jones has gotten lots of calls and emails from Trump supporters. The Washington Post reportedthat a student whom Trump criticized last year on Twitter has also received a barrage of nasty messages from Trump’s supporters.
Some have argued that by going after individuals, Trump is violating Twitter’s terms of service. Do you think they can do anything about Trump’s tweets?
Mike: I’m sure they can, and I wouldn’t doubt there’s introspection about the issue over there. Even Twitter’s chief, Jack Dorsey, admitted his feelings about the whole ordeal are “complicated.”
Do I think Twitter will actually pull the trigger on some sort of account suspension? Doubtful, unless something drastic and terrible happens. And let’s pray that isn’t the case.
And do I think Facebook will ever deep-six Trump from the platform? Not a snowball’s chance in heck. They’re already scared about ticking off Republicans over there after the monthslong saga that was Trending Topics-gate.
Farhad: A few other stories. Bloomberg Businessweek had a great look at the newfound financial discipline at Alphabet, Google’s parent company. Under Ruth Porat, the chief financial officer, the company has finally done something it hasn’t ever had to do — spend its money wisely. Man, I would hate to have a C.F.O.
Mike: I can only imagine the types of items that show up in your expense reports.
Farhad: Have you heard of Magic Leap? It’s a secretive company based in Florida that has gotten loads of hype — and $1.4 billion in funding — for its supposedly out-of-this-world “augmented reality” tech. Basically, the company seems to be recreating the holodeck from “Star Trek,” letting you experience the digital world in three dimensions.
Mike: Sorry, was too busy playing Pokémon Go. So Magic Leap is the next Pokémon, I take it?
Farhad: Well, that’s what everyone thought, anyway. The Information has a report saying things are much less magic than they’ve been made to seem. The report suggests the company hasn’t been able to get its key technology to work very well, and that one of its demo videos was actually created by a special effects studio. Talk about fake news.
Mike: Huh. Back to my Charizards and Squirtles.
Farhad: Finally, let’s talk about Facebook.
A court recently unsealed documents in a lawsuit that some shareholders filed against the company. They allege that Facebook’s chief executive, Mark Zuckerberg, got special treatment from Facebook’s board when they created a new class of shares to allow him to give his money away to charity. The documents show Marc Andreessen, the venture capitalist and Facebook board member, texting Zuckerberg during the deliberations over the stock structure. That doesn’t look like a very independent member of the board.
Mike: The whole “independent committee” thing in that saga was hilarious to me, in that Facebook didn’t even try to make it seem like its committee was concerned with shareholder interests. Andreessen invested in Facebook and is a staunch supporter of Mark’s. Of course he’s going to advocate for him and not a group of angry shareholders.
The whole episode is just another reminder that Facebook and its directors do not care one bit about how shareholders believe Facebook should be run. For many people, that’s a good corporate governance philosophy. But I say quit the charade and just own up to it.
Farhad: And then there’s Facebook’s ongoing problems over the numbers it reports on how people are using its service. These measurements are important because they underpin the entire online ad business. But recently Facebook has had to correct several numbers. It had to issue another correction this week. What’s going on? Shouldn’t they be able to count how many people are using their site? Why is this so hard?
Mike: Despite what you may believe about the intricacies of advertising technology, this is actually an interesting case to me.
The first time Facebook screwed up, the metrics that were impacted were actually significant and embarrassing, and the errors had been there for roughly two years. Now, Facebook seems to have established a running blog item — Metrics FYI — to keep its advertisers abreast of the situation.
Farhad: That reminds me, The New York Times just started a site about your errors. We call it Mike FYI.
Mike: Fair.
There are a few ways to look at this. One, you heartily LOL, like I did, when you see a company literally publish a running chronicle on how and why it has messed things up with its ad tech and analytics. It’s worrisome that some of these things haven’t been worked out entirely, and that billions of dollars are being spent on what seems to be imperfect measurement and definitions on what the biggest marketers in the world are paying for.
The flip side of that coin, however, is that Facebook is aiming for transparency around an imperfect system in continuous development, something that not all companies would necessarily do. I do wonder what something like this would have looked like were Google to have done it as it developed and fine-tuned AdWords, the company’s goose that keeps laying golden eggs, even years later.
All of that said, one of the things I keep hearing from marketers who have followed this is pretty important: If your return on investment is proven, then who cares if some of the metrics are off by a bit? It seems a bit oversimplified, but I can take the point.
And really, there’s no actual recourse for most smaller advertisers who have no choice but to keep buying Facebook ads. Facebook and Google are the only games in town — for now, at least.
Farhad: I would start my own billion-dollar online advertising company, but it’s just too cold. Till next week!
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