Most of Silicon Valley would be happy to forget the past couple of weeks – Apple’s revenue has declined for the first time in a decade, Google has become embroiled in a new stand-off with the European Commission that will almost certainly be long and painful, and the less said about Twitter at the moment the better – but Facebook can do no wrong.
Amid a below-par set of results for the technology world, Facebook smashed investors’ expectations last Wednesday. It has now done so for 13 quarters in a row, an unparalleled run that has defied both the traditional economics of large companies, and pure common sense.
Traditionally, successful internet start-ups experience “hockey-stick” growth. After a slower period in which it steadily picks up users, it hits a self-sustaining inflection point where the line shoots upward.
At some point, though, this is supposed to slow down: the forces of market saturation and fatigue tend to see a company reach a mature state of stability.
Of course, this has turned Facebook into a financial powerhouse. Profits trebled in the first quarter of the year to US
$1.5 billion ($2.2 billion) for the first quarter of 2016. The company is now worth some $330 billion, $50 billion of which is Zuckerberg’s.But somehow this isn’t happening to Facebook. The website now has 1.65 billion people log on to it at least once a month. Given that this is around half of the world’s internet population, you might think it would be losing steam, but there is no sign of this: 63 million more people have joined in the past three months, and the growth rate is actually accelerating.
But it isn’t the money that makes Facebook as formidable (or worrying, depending on where you sit). It is its all-encompassing, unrivalled orbit. The company dominates the mobile internet, and is consuming everything that might pose a challenge.
As I write this, four of the top six apps on the iPhone’s store are Facebook-owned. Contrary to claims it is becoming old hat, people are using it more, not less: People spend 50 minutes a day – one in every 20 minutes awake – on either Facebook, Facebook Messenger or the company’s photo-sharing app Instagram, Zuckerberg said last week.
This is without even counting WhatsApp, the world’s most popular messaging app.
Every time Zuckerberg has identified a threat, he has moved to meet it. In 2012, when Facebook was struggling to deal with the ascent of the smartphone, he bought Instagram, whose hockey stick moment was just approaching.
Sensing the power of messaging, Facebook paid US$19 billion for WhatsApp two years later. The rise of smartphone-based video broadcasting has been led by Twitter’s Periscope app; Zuckerberg has made live video Facebook’s biggest priority this year.
Predicting what comes next is impossible, but when you have enough firepower, you don’t need a crystal ball. Facebook has a big hand in most of the purported technologies of the next decade: virtual reality, artificial intelligence, chatbots. Some of these might never take off, but it won’t matter: Facebook will be involved in whatever does.
At times it looks like the only thing that could slow it down is running out of internet to conquer, but don’t worry about that: it will soon be beaming internet to the ground from solar-powered drones.
Naturally, as a founder and chief executive, Zuckerberg is at the centre of this. But more so than normal. As he once again pleased investors last week with the latest set of blowout results, Facebook proposed a share restructuring that saw the 31-year-old strengthen his control of shareholder voting power, letting him sell shares without losing power. There’s no chance of investors voting the proposal down at next month’s AGM. But should the growing dominance of Facebook, and Zuckerberg within it, be a cause for concern? Strengthening Zuckerberg’s power was received well, if anything, last week: most of his bets have made Facebook stronger, despite being questioned at the time, and the proposals were seen as evidence of his commitment.
As for Facebook itself, it has moved so fast that the rest of the world has been unable to keep up. It has upended the media, politics and advertising. There are enough opinions on the merits of its growing power, but it is a safe bet to say that authorities will take at least an interest.
Its use of personal data is also under continuous scrutiny, especially in the post-Snowden climate. Facebook’s promotion of chatbots are seen partly as an attempt to bypass Google and Apple’s control of smartphone app ecosystems, potentially opening a new front in technology’s platform wars.
It’s very likely that Facebook, and Zuckerberg, will own the future. But it will have to deal with the repercussions.