Taking It To A New Level, Air Required, Hot Preferred

Michael Hedges November 6, 2017 Follow on Twitter

Those who reign supreme in the digital realm see things differently. It is the lofty perch, the money, the power, not to forget pizza on demand. Clear air is everywhere, turbulence under control. They eat what they want. Betting on that bubble bursting is a fools game.

Social media enterprise Facebook took the monthly active user metric to a new level earlier this year, pushing past 2 billion during the second quarter. Figures for Q3, released last week, hit 2.072 billion, up 15.9% year on year. That’s 27.3% of the world’s population. Revenue for the last quarter, noted by AdWeek (November 2), topped US$10 billion, 98.1% from advertising, up 57.3% year on year.

In terms of market capitalization, the five technology companies - Alphabet (owner of Google), Amazon, Apple, Facebook and Microsoft - are worth US$3.3 trillion, according to CNBC (October 31). If ranked along side gross domestic product (GDP - PPP), the aggregate value of the big five would place 8th, above the UK. Apple’s market capitalization “briefly,” said Bloomberg (November 3), exceeded US$900 billion this past week. “Next stop: 1 trillion?” breathlessly exclaimed CNN Money (November 3). Twitter, the preferred communications medium for US president Donald Trump, said last week it is “close” to being profitable for the first time in its history. At the same time Amazon founder and CEO Jeff Bezos became the world’s richest person, just under US$95 billion, according to Bloomberg (November 4). He briefly overtook Bill Gates (Microsoft co-founder) one day last July but now appears secure at the top. He sold a million Amazon shares last week, worth US$1.1 billion, to fund his new space flight venture. Yes, it’s a new level.

All of this mind, it was no surprise Facebook, Google and Twitter sent the hired help to speak with a United States Senate committee last week trying to get a grip on social media’s impact on elections. The US Senate hearings with the lawyers for the social media giants danced something like the Texas two-step; Senators applying pressure, the lawyers not noticing. Asked several times by Senators to distinguish their business model from that of publishers the lawyers repeated, almost in unison, that they are not publishers but platforms. “That may well be a distinction that is lost on most of us,” replied Texas Republican Senator John Cornyn, quoted by axios.com (November 2). Asked by Senator Al Franken, Democrat from Minnesota, why, as successful crunchers of data, they “could not connect the dots” between political advertising during the 2016 elections and the Russian roubles that paid for them, Facebook general counsel Colin Stretch offered that it was complicated. The likelihood of the highly successful - and rich - media/tech companies facing legislative backlash, at least in the near term, is remote.

Not to appear completely unmoved by the torrent of criticism about standards, practices, transparency, taxes and anything else loosely connected, the social media companies first applied a charm offensive. Facebook and Google sent outreach teams far and wide to assuage grumpy publishers and the politicians who need them. Facebook CEO Mark Zuckerberg visited schools in Italy to talk about media literacy, distinguishing between real and fake news. Ad sales structures have been reconfigured.

More concrete - and not too costly - steps have appeared, largely since the German NetzDG law came into effect October 1st, raising fears within the internet technology world that other countries might copy and paste. The German law requires online providers of a certain size to remove hate speech content of any kind within 24 hours or face fines sufficiently large to attract their attention. Free speech advocates have targeted the law for repeal, giving the big social media networks a public relations ally.

It is hardly a coincidence that the well-known social media and online platforms have taken steps to reduce certain content emanating from the Russian Federation. Twitter stepped out in late October, “off-boarding” advertising on the platform from Russian state-owned RT (Russia Today) and Sputnik. Twitter chief executive Jack Dorsey said (October 26) the US$1.9 million in “projected earnings” would be donated to research into “malicious automation and misinformation.

The next day (October 27) Google News stopped listing content produced by websites operated by the Federal News Agency (FAN), outted last March by Russian news portal RBC as part of the infamous St. Petersburg “troll factory” Internet Research Agency. Both appear to be “owned” by Evgeny Prigozhin, known locally as the personal chef for Russian president Vladimir Putin. The “troll factory” spent US$2.3 million targeting the 2016 US election campaign, reported RBC. Some of that was spent with Facebook and Instagram. Facebook’s Russian footprint in limited, young people preferring the home-grown VKontakte. Banishment from of Federal News Agency content from Google News seems to have been brief, reported Vedomosti (November 5), as access has been “unlocked.”

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