The Demise Of Facebook

By on January 8, 2011 in News 57

Facebook logoDouglas Rushkoff called the impending doom of AOL when it’s hapless merger with Time Warner was announced. Now he says Facebook is cashing out and it’s the beginning of its demise, in an opinion piece at CNN:

All signs for Facebook appear to be pointing up.

Mark Zuckerberg is Time’s Man of the Year, the movie about him seems likely to be an Oscar winner, and now Goldman Sachs is raising $1.5 billion from its favorite investors on behalf of the social networking company.

At the very same moment, Facebook’s only real competitor –NewsCorps’ waning social networking site, MySpace — is shedding employees and expenses, most likely in hopes of a fire sale.

But appearances can be deceiving. In fact, as I read the situation, we are witnessing the beginning of the end of Facebook. These aren’t the symptoms of a company that is winning, but one that is cashing out.

Indeed, 11 years ago this week, when AOL announced its $350 billion merger with Time Warner, I was asked to write an OpEd for the New York Times explaining what the deal between old and new media companies really meant. I said that AOL was cashing in its over-valued dotcom stock in order to purchase a stake in a “real” media company with movie studios, theme parks and even cable. In short, the deal meant AOL knew their reign was over.

The Times didn’t run the piece. Of course, the merger turned out to be a disaster: AOL’s revenue stream was reduced to a trickle as net users ventured out onto the Web directly…

[continues at at CNN]

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  • Anonymous

    Great stuff again from Rushkoff.

    Of course Wall Street’s involvement is a harbinger of doom. It always has been. Being the goat-fucking Schtupacabras* they are, they’ve been raised since hatching day to instinctively smell blood and go after it.

    Wall Street’s about arbitrage, not production. Where the fuck were they when the infrastructure Facebook (or AOL, for that matter) needed building? Nowhere. They’re looking for quick kills, not some protracted development process.

    Though I kinda wish the piece extrapolated a bit more on the idea presented here that these cycles of social media crazing then crashing are inevitable. I mean, can we expect this to go on forever? Now that finance is so dominated by a few big banks, when even those dumbasses realize that there’s little margin to be made on social media, will there be any incentive to develop new media? Or does he believe that the banks’ and the public’s gullibility is that endless?

    I suppose it could be. Six-thousand years on, and the world still doesn’t get tired of counterproductive wars. (Wait–the world is only 6,000 years old, right?)

  • Liam_McGonagle

    Great stuff again from Rushkoff.

    Of course Wall Street’s involvement is a harbinger of doom. It always has been. Being the goat-fucking Schtupacabras* they are, they’ve been raised since hatching day to instinctively smell blood and go after it.

    Wall Street’s about arbitrage, not production. Where the fuck were they when the infrastructure Facebook (or AOL, for that matter) needed building? Nowhere. They’re looking for quick kills, not some protracted development process.

    Though I kinda wish the piece extrapolated a bit more on the idea presented here that these cycles of social media crazing then crashing are inevitable. I mean, can we expect this to go on forever? Now that finance is so dominated by a few big banks, when even those dumbasses realize that there’s little margin to be made on social media, will there be any incentive to develop new media? Or does he believe that the banks’ and the public’s gullibility is that endless?

    I suppose it could be. Six-thousand years on, and the world still doesn’t get tired of counterproductive wars. (Wait–the world is only 6,000 years old, right?)

    • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

      It may be a little older…but all the wars before that were pretty much sticks and rocks being flung back and forth. Shit only got impressive fairly recently :-)

  • grooveboss

    and we is crashes ill get my life back

  • grooveboss

    and we is crashes ill get my life back

  • TroubleCominEveryday

    Why doesn’t some “computer coding savvy anarcho good guys” start up a similar type operation? I hate it when bad guys keep getting rewarded.

  • TroubleCominEveryday

    Why doesn’t some “computer coding savvy anarcho good guys” start up a similar type operation? I hate it when bad guys keep getting rewarded.

    • Alex

      There is Diaspora, but apart from a name that is too long and burdened with political overtones it isn’t very good yet, apparently.

  • WhiteRose

    Facebook is a useless fad..

  • WhiteRose

    Facebook is a useless fad..

  • http://myindigolives.wordpress.com/ Ellie K

    It’s never a good thing when one person or organization holds most, or all the control. It’s even worse when that one company is privately held. Like Facebook.

    I don’t know why so many otherwise sensible, even highly analytical and inquisitive people have been so gullible about using Facebook. Be that as it may, this post is kind of interesting in its perspective. Because there really isn’t any reason that Facebook should do an IPO, or whatever special-purpose vehicle thingy that Goldman Sachs is bringing to market. Facebook seems to hold all the cards, thanks to those 500 million plus users’ endless credulity and gullibility about sharing personal identifying information. Why should Facebook want to cash out, even partially, if everything is going so well? As well as give up control, and perhaps have SEC filing requirements and disclosure which it does not need to observe as a privately held company?

    Only reason I can think of is that the powers that be at Facebook, not just Mr. Man of the Year, want to invest their money somewhere else, with more profit, or even preservation of capital, than Facebook. I wish I knew what it were, and what clouds on the horizon they see for Facebook though.

    I really do hope there will be alternatives to Facebook. The more the better. On a side note, speaking of MySpace: I thought it was pretty much dead and over. Maybe not. They’ve changed the logo, and it now says MySpace beta. I never had a MySpace account, nor thought much of it. But I sure would like to see some of that social media influence get spread around a bit. Right now it’s so bad that some online newspapers and media outlets only allow commenting via a Facebook account login.

    Disinfo.com uses the Disqus comment system. Thankfully. But scroll down to the bottom of this page. What do you see? The nearly ubiquitous “Facebook social plugin”. Even here! It says “Sign in” or “Create an account to log in to see what your friends are recommending”. However, it is still my choice. I can still express my thoughts without using Facebook as my intermediary, because Disinfo.com chooses to offer Disqus. I hope that will always be possible. That’s why I hope this article is true, and that Facebook’s influence diminishes.

  • http://myindigolives.wordpress.com/ Ellie K

    It’s never a good thing when one person or organization holds most, or all the control. It’s even worse when that one company is privately held. Like Facebook.

    I don’t know why so many otherwise sensible, even highly analytical and inquisitive people have been so gullible about using Facebook. Be that as it may, this post is kind of interesting in its perspective. Because there really isn’t any reason that Facebook should do an IPO, or whatever special-purpose vehicle thingy that Goldman Sachs is bringing to market. Facebook seems to hold all the cards, thanks to those 500 million plus users’ endless credulity and gullibility about sharing personal identifying information. Why should Facebook want to cash out, even partially, if everything is going so well? As well as give up control, and perhaps have SEC filing requirements and disclosure which it does not need to observe as a privately held company?

    Only reason I can think of is that the powers that be at Facebook, not just Mr. Man of the Year, want to invest their money somewhere else, with more profit, or even preservation of capital, than Facebook. I wish I knew what it were, and what clouds on the horizon they see for Facebook though.

    I really do hope there will be alternatives to Facebook. The more the better. On a side note, speaking of MySpace: I thought it was pretty much dead and over. Maybe not. They’ve changed the logo, and it now says MySpace beta. I never had a MySpace account, nor thought much of it. But I sure would like to see some of that social media influence get spread around a bit. Right now it’s so bad that some online newspapers and media outlets only allow commenting via a Facebook account login.

    Disinfo.com uses the Disqus comment system. Thankfully. But scroll down to the bottom of this page. What do you see? The nearly ubiquitous “Facebook social plugin”. Even here! It says “Sign in” or “Create an account to log in to see what your friends are recommending”. However, it is still my choice. I can still express my thoughts without using Facebook as my intermediary, because Disinfo.com chooses to offer Disqus. I hope that will always be possible. That’s why I hope this article is true, and that Facebook’s influence diminishes.

    • http://twitter.com/KMenex Kyle Milliken

      what about free nodes?

  • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

    I wouldn’t my breath on that. Myspace and others may have failed…but Edison tried many bulbs before the first mass-producable incandescent took off and functioned right. Past failures are not guarantees of future failures…and Facebook has the edge at the moment, in terms of familiarity, ease of use and revenue streams (albeit largely through hawking space to apps that are almost exclusively designed to steal people’s info and data mine it.) Corrupt, amoral, evil and disgusting…yes…doomed to failure…not so much. If anything…Facebooks whorish willingness to suck off whomever or whatever is required to keep going may very well ensure their survival. Inevitably, it will probably end up looking a bit like a Tijuana donkey show with advertisers, dataminers and scammers triple penetrating FB in a giant orgiastic pagan freakshow….

    …and people will still use it…because capitalism and grotesque displays of same aren’t perceived as horrifying anymore.

  • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

    I wouldn’t hold my breath on that. Myspace and others may have failed…but Edison tried many bulbs before the first mass-producable incandescent took off and functioned right. Past failures are not guarantees of future failures…and Facebook has the edge at the moment, in terms of familiarity, ease of use and revenue streams (albeit largely through hawking space to apps that are almost exclusively designed to steal people’s info and data mine it.) Corrupt, amoral, evil and disgusting…yes…doomed to failure…not so much. If anything…Facebooks whorish willingness to suck off whomever or whatever is required to keep going may very well ensure their survival. Inevitably, it will probably end up looking a bit like a Tijuana donkey show with advertisers, dataminers and scammers triple penetrating FB in a giant orgiastic pagan freakshow….

    …and people will still use it…because capitalism and grotesque displays of same aren’t perceived as horrifying anymore.

    • Bhornbuckle75

      Wow….I don’t think anyone could have put all of that better than you just did! “Facebooks whorish willingness to suck off whomever or whatever is required to keep going may very well ensure their survival. Inevitably, it will probably end up looking a bit like a Tijuana donkey show with advertisers, dataminers and scammers triple penetrating FB in a giant orgiastic pagan freakshow….” …..That my friend was just pure poetry!!! Bravo to you sir!!! B R A V O.

      *clap, clap, clap, clap*——- *more claps rising to meet the first* ————-*and finally thunderous applause*

      • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

        Thanks. *bows* I’d like to thank the spirit of Hunter S Thompson…whom I suspect was channeled when that string of words popped into my head.

        • http://twitter.com/KMenex Kyle Milliken

          yea that was good.

  • Glrcmptn

    development decline same old pattern…..

  • Glrcmptn

    development decline same old pattern…..

    • rtb61

      More like development, growth, shonky investment company, mass media promotion, sell out, collapse, many many ripped off investors, handful of wealthy psychopaths, corrupted politicians, no prosecution, then repeat.
      That political corruption bit is extremely important to repeat the con, again and, again and again.

  • Anonymous

    More like development, growth, shonky investment company, mass media promotion, sell out, collapse, many many ripped off investors, handful of wealthy psychopaths, corrupted politicians, no prosecution, then repeat.
    That political corruption bit is extremely important to repeat the con, again and, again and again.

  • Alex

    There is Diaspora, but apart from a name that is too long and burdened with political overtones it isn’t very good yet, apparently.

  • 5by5

    Huh. Some hype is dying that I never participated in to begin with. Moving on now…

  • 5by5

    Huh. Some hype is dying that I never participated in to begin with. Moving on now…

  • 5by5

    Frankly, the reason why you should KNOW it’s dying beyond a doubt, is because Goldman Nutsachs is interested in it.

  • 5by5

    Frankly, the reason why you should KNOW it’s dying beyond a doubt, is because Goldman Nutsachs is interested in it.

  • Ricky Ricardo

    How can anyone take, “Free” seriously? No wonder why the country is doing so well… (Sarcasm, if you haven’t caught on)… Nobody should be taking Facebook, Myspace, LinkedIn, Twitter seriously, nobody with a real business. No person who work long hard hours to serve the public, town, nation, and worldwide businesses, should take this crap seriously. How are we going to make it out of these economic struggles without charging a little bit for something, like in the old days. Though, I have come accross their ads and these ads aren’t free, so, why not start charging for the use of the site entirely. Because the part of socializing is what gets me, because its a good idea but its free. And, people just love free… I mean look at how useless Facebook really is, most of the time, (because of free), you got people talking about, what they’re doing and most of it is not even that great. For instance, “I’m taking a dump, want to join me.” How can anyone take anyone on there seriously… Or “I’m working out, I’m sweating like a dog, need water, need food, I hunger…” or “Lady Gaga rulez”… I just can’t fathom why anyone would like a ridiculous idea like this social network crap. But, now if you charged it, maybe it will bring on some real money to the country and hopefully get rid of the idiocrisy that is going on on Facebook and maybe all the rest of the FREE sites will start catching on. It might be fun to these people who use it, but they fail to realize there’s nothing amazing about this site, its really not paying your bills its not doing anything useful for you. The only people that shouldn’t have to pay for social networking are the Soldiers, Marines, Seamen and Seawomen, Flyboys and FlyGirls that are trying to contact their families, while they’re serving in the sand box or away from their families.
    Mind you, I’m not a 30, 40 or even a 50 year old. I know that nothing in life is free, why should this be free. I’ve been paying bills for 10 years already, my family has been paying bills since I’ve been on this Earth. Water should be free why isn’t water free. The only time social networking should be free is when, you’re face to face and sometimes that not free, because sometimes, that’s either at school, at work, a bar, at the bus stop, a convenience store, or anywhere you have to pay or be paid to be there. The main argument I’m having here, is, charge a price for stupidity, I might take your FACEBOOK business more seriously.
    To get back to the real argument, its always been dead in my eyes, they might have pursuaded many people to enter this side of stupidity, but all in all, the truth lies in their billions of dollars. NOW has Facebook really helped anyone, with all that money? I’m not talking about a school, I’m talking about the true families that have been truthfully struggling these past few years, with the recession and even all those folks that lost all their homes because the economy is gone to shit. They are a supposed million dollar business, that uses and abuses people true identity and probably sells it to these friggin’ terrorists for money. Because I don’t know how they can be billionaires, millionaires, or thousend dollars richer, then most hard working people. And, It wouldn’t be possible without doing some shady shit behind closed doors. SO if this is the DEMISE OF FACEBOOK, WHO CARES there will be some other A$$H0LE, making another one like it next year…. Hopefully, these new people and this new site will be conscience of people who are struggling when they make their millions and give a little to their communities, instead of just a school…

  • Ricky Ricardo

    How can anyone take, “Free” seriously? No wonder why the country is doing so well… (Sarcasm, if you haven’t caught on)… Nobody should be taking Facebook, Myspace, LinkedIn, Twitter seriously, nobody with a real business. No person who work long hard hours to serve the public, town, nation, and worldwide businesses, should take this crap seriously. How are we going to make it out of these economic struggles without charging a little bit for something, like in the old days. Though, I have come accross their ads and these ads aren’t free, so, why not start charging for the use of the site entirely. Because the part of socializing is what gets me, because its a good idea but its free. And, people just love free… I mean look at how useless Facebook really is, most of the time, (because of free), you got people talking about, what they’re doing and most of it is not even that great. For instance, “I’m taking a dump, want to join me.” How can anyone take anyone on there seriously… Or “I’m working out, I’m sweating like a dog, need water, need food, I hunger…” or “Lady Gaga rulez”… I just can’t fathom why anyone would like a ridiculous idea like this social network crap. But, now if you charged it, maybe it will bring on some real money to the country and hopefully get rid of the idiocrisy that is going on on Facebook and maybe all the rest of the FREE sites will start catching on. It might be fun to these people who use it, but they fail to realize there’s nothing amazing about this site, its really not paying your bills its not doing anything useful for you. The only people that shouldn’t have to pay for social networking are the Soldiers, Marines, Seamen and Seawomen, Flyboys and FlyGirls that are trying to contact their families, while they’re serving in the sand box or away from their families.
    Mind you, I’m not a 30, 40 or even a 50 year old. I know that nothing in life is free, why should this be free. I’ve been paying bills for 10 years already, my family has been paying bills since I’ve been on this Earth. Water should be free why isn’t water free. The only time social networking should be free is when, you’re face to face and sometimes that not free, because sometimes, that’s either at school, at work, a bar, at the bus stop, a convenience store, or anywhere you have to pay or be paid to be there. The main argument I’m having here, is, charge a price for stupidity, I might take your FACEBOOK business more seriously.
    To get back to the real argument, its always been dead in my eyes, they might have pursuaded many people to enter this side of stupidity, but all in all, the truth lies in their billions of dollars. NOW has Facebook really helped anyone, with all that money? I’m not talking about a school, I’m talking about the true families that have been truthfully struggling these past few years, with the recession and even all those folks that lost all their homes because the economy is gone to shit. They are a supposed million dollar business, that uses and abuses people true identity and probably sells it to these friggin’ terrorists for money. Because I don’t know how they can be billionaires, millionaires, or thousend dollars richer, then most hard working people. And, It wouldn’t be possible without doing some shady shit behind closed doors. SO if this is the DEMISE OF FACEBOOK, WHO CARES there will be some other A$$H0LE, making another one like it next year…. Hopefully, these new people and this new site will be conscience of people who are struggling when they make their millions and give a little to their communities, instead of just a school…

    • http://twitter.com/KMenex Kyle Milliken

      Water isn’t free because at one point environmentalism and capitalism mixed together and made a swoon of a drink.

  • Bhornbuckle75

    Wow….I don’t think anyone could have put all of that better than you just did! “Facebooks whorish willingness to suck off whomever or whatever is required to keep going may very well ensure their survival. Inevitably, it will probably end up looking a bit like a Tijuana donkey show with advertisers, dataminers and scammers triple penetrating FB in a giant orgiastic pagan freakshow….” …..That my friend was just pure poetry!!! Bravo to you sir!!! B R A V O.

    *clap, clap, clap, clap*——- *more claps rising to meet the first* ————-*and finally thunderous applause*

  • Gustavo

    Discovered Douglas when i got his book Cyberia recommended a few decades ago and admire his work, yet sometimes disagree with him, and this is one of them. fb willl morph, not dissapear, just like when everyone said before google’s ipo that it was just another search engine of dujour….

    • Gustavo

      in addition to that the whole article is based on a false comparison of myspace which is a music oriented tool and poorly designed. the web is littered with casualties that fought against simple, streamlined, clean, effective designed sites that use effective subliminal instead of blingbling in your face advertising tactics :

      google vs yahoo
      gmail vs livemail
      facebook vs myspace

      • Gustavo

        i mean soundcloud vs myspace

  • Gustavo

    Discovered Douglas when i got his book Cyberia recommended a few decades ago and admire his work, yet sometimes disagree with him, and this is one of them. fb willl morph, not dissapear, just like when everyone said before google’s ipo that it was just another search engine of dujour….

  • Gustavo

    in addition to that the whole article is based on a false comparison of myspace which is a music oriented tool and poorly designed. the web is littered with casualties that fought against simple, streamlined, clean, effective designed sites that use effective subliminal instead of blingbling in your face advertising tactics :

    google vs yahoo
    gmail vs livemail
    facebook vs myspace

  • Gustavo

    i mean soundcloud vs myspace

  • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

    Thanks. *bows* I’d like to thank the spirit of Hunter S Thompson…whom I suspect was channeled when that string of words popped into my head.

  • http://twitter.com/KMenex Kyle Milliken

    yea that was good.

  • http://twitter.com/KMenex Kyle Milliken

    what about free nodes?

  • http://twitter.com/KMenex Kyle Milliken

    Water isn’t free because at one point environmentalism and capitalism mixed together and made a swoon of a drink.

  • http://voxmagi-necessarywords.blogspot.com/ VoxMagi

    It may be a little older…but all the wars before that were pretty much sticks and rocks being flung back and forth. Shit only got impressive fairly recently :-)

  • quartz99

    This article shows a fundamental misunderstanding about Facebook. Their product is not the website. Their product is not social networking. Their product is their users. They create and maintain an infrastructure that is centered around getting as much of your attention, time and information as they can, and then marketing that information and attention to businesses. They understand that the only way to get your attention and your information is to make you feel like you get a benefit for doing so, but the networking is secondary. They’ve got a self-replenishing product. They’re not going anywhere anytime soon unless they do something royally stupid.

    For me, the benefit is that I can easily stay in touch with people from college, high school and my childhood, people I probably would have never spoken to again otherwise. I recognize that the way I’m paying for this contact is with a bit of information about myself and knowing that I’m going to have to see ads on the page. You know what? I’m ok with that. Maintaining a website as large as Facebook takes a lot of people, a lot of servers and a lot of money. I’m not willing to pay for that contact with money, so they have to have some other way to pay the bills (not to mention, subscription models invariably fail to make enough money to cover costs) So long as people understand this and only give Facebook information that is already publicly available or that they don’t care if it’s available to every company on the planet, I’d say both sides are getting a good deal.

  • Anonymous

    This article shows a fundamental misunderstanding about Facebook. Their product is not the website. Their product is not social networking. Their product is their users. They create and maintain an infrastructure that is centered around getting as much of your attention, time and information as they can, and then marketing that information and attention to businesses. They understand that the only way to get your attention and your information is to make you feel like you get a benefit for doing so, but the networking is secondary. They’ve got a self-replenishing product. They’re not going anywhere anytime soon unless they do something royally stupid.

    For me, the benefit is that I can easily stay in touch with people from college, high school and my childhood, people I probably would have never spoken to again otherwise. I recognize that the way I’m paying for this contact is with a bit of information about myself and knowing that I’m going to have to see ads on the page. You know what? I’m ok with that. Maintaining a website as large as Facebook takes a lot of people, a lot of servers and a lot of money. I’m not willing to pay for that contact with money, so they have to have some other way to pay the bills (not to mention, subscription models invariably fail to make enough money to cover costs) So long as people understand this and only give Facebook information that is already publicly available or that they don’t care if it’s available to every company on the planet, I’d say both sides are getting a good deal.

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  • http://www.facebook.com/JoshLCannon Josh Cannon

    I think Facebook has hit that Ebay point. There were plenty of Ebay competitors, but when they hit a certain point all of the competitors instantly became irrelevant.

    It’s also clear that Facebook is good at what they do unlike Myspace and Friendster.

  • http://www.facebook.com/JoshLCannon Josh Cannon

    I think Facebook has hit that Ebay point. There were plenty of Ebay competitors, but when they hit a certain point all of the competitors instantly became irrelevant.

    It’s also clear that Facebook is good at what they do unlike Myspace and Friendster.

  • Hereshowie

    Sooner or later they will all disappear and be replaced. What I want is a solid place to blog. I find the friendships that I develop come from the discussions that follow my posting. Peace, howie

  • Hereshowie

    Sooner or later they will all disappear and be replaced. What I want is a solid place to blog. I find the friendships that I develop come from the discussions that follow my posting. Peace, howie

  • http://www.facebook.com/people/Chris-W-Roads/629696293 Chris W Roads

    Facebook is the new pet rock. Sorry people but it turns society hates itself for being a piece of shit.
    I wouldnt drop any money in a social network site knowing this.

  • http://www.facebook.com/people/Chris-W-Roads/629696293 Chris W Roads

    Facebook is the new pet rock. Sorry people but it turns society hates itself for being a piece of shit.
    I wouldnt drop any money in a social network site knowing this.

  • http://www.nickmeador.org/ ndmeador

    I think the beginning of Facebook’s end was in 2008 when they made the site wider to accommodate advertisements. Since then it’s been a steady downhill experience as a Facebook user. Every other week I want to delete my account. But oh, the interconnectivity!!!

  • http://www.nickmeador.org/ ndmeador

    I think the beginning of Facebook’s end was in 2008 when they made the site wider to accommodate advertisements. Since then it’s been a steady downhill experience as a Facebook user. Every other week I want to delete my account. But oh, the interconnectivity!!!

  • DeepCough

    Evil never really dies, it just takes a new form. If Facebook ever does die or get bought out, whatever the case, the only thing that will change is its brand name.

  • DeepCough

    Evil never really dies, it just takes a new form. If Facebook ever does die or get bought out, whatever the case, the only thing that will change is its brand name.

  • amac

    I left Facebook a few months ago because it was generating a lot of noise in my life for nothing. I realized that I didn’t give a damn about what any of my so-called “friends” were thinking or feeling or doing at any given moment of the day. When I started fussing around with privacy and notification settings to filter practically everything out, I realized that there was no point in being there at all… and the fact deleting one’s profile is a somewhat painstaking process only makes Facebook look sleazy to me. Good riddance.