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Thursday January 23, 2014 7:12 am

The Problem with Facebook [Video]

The problem is the only way Facebook has found to make money is by treating all entities on the site as advertisers and charging them to share their content.

This business plan backfires because 1) not all entities ARE advertisers and 2) it was the content from these people, specifically friends, family, and creators that made the site worth visiting in the first place.

Now the incentives are misaligned:

  • Individuals want to see great content, but they are now seeing more paid content and organically shared content which appeals to the lowest common denominator (babies, weddings, and banal memes)
  • Creators want to reach fans but their posts are being throttled to force them to pay to be seen
  • Brands and advertisers have to pay once to advertise their page on Facebook, and then pay again to reach the people who have already liked their page. Plus Facebook is not a place where people generally go to buy things.

Facebook stands in contrast to other social media like Twitter, YouTube, and Instagram where all content is shared with all followers.

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