Why is Mark Zuckerberg so concerned about his ‘charity’ initiative that he had to re-jig it in the face of opposition, star in another breathless video about it, and start a misleading campaign about it among users in India? Bear with me, it’s an interesting story.
Facebook is in a bit of a jam, and opposition to this one pet project in India is probably pointing to the seams of a larger story worldwide. But it all starts with a simple pair of numbers.
A rocky road on Wall Street
Facebook has about the same number of users as Google: about 1.4 billion. That’s one out of five people on earth. And the social network made US$12.4 billion off them last year – that’s about US$ 8.65 per person on their service.
While Google made $66 billion off about the same number of people – almost $46 per head – a revenue efficiency more than 5 times that of Facebook. And that gap isn’t narrowing nearly fast enough.
Revenue growth to support Facebook’s stratospheric stock price at 60 times earnings is a big challenge, I’d imagine. Oh, and even at 5 times the revenue efficiency, Google’s Price-to-Earnings (P/E) ratio is less than half of Facebook’s – so the pressure on the Facebook stock price can only increase with time.
There’s only so much you can squeeze out of the first world – the current billion or so people – even though Facebook has cut virality, decreased organic reach and tried every which way of getting someone, anyone to pay more for visibility on its once-open social network. A more desperate measure was probably needed.
What they realized they needed to do – for their own future and that of their stock price – was to look beyond these 1.4 billion people to find new users. And, at the same time, to stop these new users from going over to their rivals in Mountain View, California.
These new users are in China, India and the rest of the developing world. China has locked Facebook out. India, with a billion people yet to get on the net is probably seen as the great white hope for the future of this stock.
Hey poor people, please don’t Google
Enter Internet.Org. A clever strategy was announced with fanfare last year under the guise of an apparent not-for-profit mission “to connect the unconnected on earth”. The world welcomed the new face of Mark Zuckerberg, twenty-something billionaire philanthropist.
The Facebook CEO visited India, had the obligatory photo-op with the Prime Minister, and it was only a few months later that one figured out what the effort was all about.
Looking under the hood has actually shown a different reality. First, there’s no NGO. This is just a division of Facebook. Second, it is absolutely for-profit in every way. There is no not-for-profit part of it whatsoever. Third, as you’ll figure out: this is really the “Facebook Poor People Acquisition Department”.
And fourth, it’s not just about pushing Facebook down the throats of the unwired – but it’s also about making sure they don’t get a taste of Google or any other big boy in the process.
So who’s outside the first 1.4 billion?
These are mostly poor folks – but a growing number of them have mobile phones. Today, you get data-enabled handsets for as little as $50 without a contract. And in India at least, the largest number of these users are on the pre-paid model – people topping up their phones with an average of $2 or so a month to pay for voice and data.
One can convincingly argue that these folks are most in need of true, open internet connectivity.
If you want them to come out of their poverty in the fastest way possible, you’d want to make the widest and best resources of the internet open to them. Their education, careers and futures depend on having the same access to the information that we all – Zuckerberg included – have grown up on and take for granted.
You can imagine that a poor kid in a Chhatisgarh village in central India should be able to see Khan Academy videos, her Dad should be able to look up agricultural spot prices on Google or a commodity exchange and perhaps her Mom could look for a better-paying job at a top job board.
But natch, none of these are part of the so-called “Internet” that Facebook offers the poor. Videos in fact, are not available at all, presumably to conserve bandwidth so it can be retained for more important things like villagers sending each other Candy Crush requests.
Internet.Org: a lie in name and in intent.
This Facebook effort is neither about the Internet, and nor is it a “.org” – the traditional domain for a not-for-profit.
It’s just about acquiring folks from the bottom of the pyramid as Facebook users. So Facebook can, over time, get that $8.65 more for each of them, while at the same time making sure that Google doesn’t get their $46 from each of them.
I’m no apologist for Google – but it’s interesting that the world’s gateway to the internet doesn’t feature in 10 of the 11 countries this Facebook effort runs in. And in the 11th, it runs in a way the user can search Google from within the free-data service – but has to pay for data to see the search results. Quite pointless, really.
But it’s not just Google. There’s no Alibaba, there’s no Amazon, there’s no eBay. No place these folks can buy, or sell or trade. There’s no Kiva or other bottom-of-pyramid money service. No loans they can receive. No government sites, no banks. No Coursera or EdX or Khan Academy – so it’s not about education either.
Forget about entertainment – there’s absolutely none of that. And no LinkedIn, of course. You name any possible site of importance to someone who needs information and opportunities, and it’s not there. But, hey, I guess they you can always poke folks in the next village!
Earlier, there was no system to how Facebook picked the sites it would feature alongside itself in its so-called “free internet package”. It was entirely arbitrary. They were raked over the coals for this crime among greater ones. But then, selectively facing only this criticism, Zuckerberg announced version 2.0 of the product – where all else remains the same, but where an app that wanted to be part of Facebook’s cabal could submit itself through a lead form to be “considered for acceptance”.
This is basically rearranging the deckchairs on the Titanic – not that this makes much of any difference to the basic problem.
It’s the Splinternet!
In reality, this is an effort to splinter the internet. To create a gulag of unimportant sites alongside the 800-pound gorilla Facebook. And to capture the poor and the needy for free inside, so they could be hooked on this free cocaine of chat and profiles forever; and not discover the actual internet that lies outside these walls.
So the real internet outside, where other sites that can be more useful to these users, or make more money from them than Facebook can, can never touch them.
That’s exactly what’s happened in Kenya and Indonesia – where people say they’re not on the Internet, but they’re on Facebook. Or worse, that yes, Facebook means the internet.
The internet by definition is a vast collection of interlinked sites – over a billion of them, at last count. And Facebook offers about 0.0000002% of this to the user. With none of the new ones that come up around the world virtually every minute being added to that list.
Where’s the public interest?
I’ve been asked – hey, what’s your problem? It’s capitalism. Let it be. 0.00000002% is better than 0%, right?
Actually, I don’t believe so. Let Facebook pull its stunt. Then Google will. So will Twitter. And eBay. And each telco. And each e-com company. And soon we’ll have hundreds of thousands of different so-called internets around the world used by a handful of people each who can’t talk or connect to each other. Instead of one internet of a billion and growing sites, always connected to each other.
We can’t give up the essentially connected nature of the internet – something I believe is critical to a thriving future for our planet – just because Zuckerberg needs to get his revenues up and stock price from crashing.
Further, this is public property we’re talking about. My point is straight-forward. In most of the developing world, there is little landline- or cable-based internet access, which may be privately-owned and where, one could argue, the owner of the network can do damn well as they please. This was Comcast’s defence, I believe, which was outlawed in the US anyway. Most of the access in this part of the planet is via the mobile phone. And these phones connect on spectrum owned by the government and the people of those countries.
Spectrum that is licensed by these governments to private and public telecom operators under certain terms and conditions. So what conditions should the government apply here?
The issue is new because these stunts are new. But a bunch of us are trying to lobby the Indian government to clearly demand that all spectrum users MUST allow equal and non-discriminatory internet access to all users to the fullest extent allowable by law. We believe if India legislates this, the rest of the world can learn from this and follow suit. And stop this dirty masters-of-the-universe type deed from happening.
We’d like the government to disallow differentiated internet experiences engineered by providers – so Comcast’s roasting of Netflix’ nuts over a fire till they coughed up money to get normal bandwidth speeds restored would never happen in India.
To not allow this, ever, on government-owned spectrum at least. And to not allow zero-rating services on spectrum either – which is what the Facebook Poor People Acquisition Program is, which denies users access to 99.99999998% of the world’s websites.
A million emails were sent to regulators in India – unprecedented, in fact – to encourage them to make the right decision. The government seems to have woken up to the fact that the internet could be broken and fragmented under its nose and has started making somewhat conciliatory noises.
But the fight is far from over
The telcos have fought back with a misleading consumer missed-call campaign, to try get some semblance of public support in their favour. Facebook has started a desperate effort – not called Internet.org any more here, but “Connect India” – and is pushing it to the inboxes and news feeds of all Indians on the service. It has also – oh mother of ironies – started a Change.org petition in its favour to counter the one started against it earlier.
They’re the ones with the big bucks on their side. So we could yet lose.
All we have are a few words on screen, and perhaps the support of readers like you. Guess this might just be the time for me to request you to share or forward this piece
No room for charity?
So is there no room for a well-meaning act? I have absolutely nothing against charity – if done with good intent and with no strings attached. Or it just becomes the modern version of the missionary “I’ll feed you only if you accept my God as yours too” Faustian bargain.
If Facebook’s founder truly wants to be seen as a future Nobel Peace Prize winner, sure – then arrange with telcos to give away bandwidth. A half a gig or even a gig of net usage free to users every month where they can go wherever they want online. I understand Mozilla and other folks feel this way too. And to not restrict users to only sites that the Facebook tech team “considers for acceptance”. In fact, to not even force people to use Facebook with their free bandwidth.
That would be an amazing act. Are you listening, Mark?
I do hope better sense – and failing which, public pressure prevails. Not this dirty bargain called Internet.Org version 2, where they’re seducing the poor user into accepting a substandard and shoddy sliver of the internet. And denying them opportunities that they, like every other human being in the first world, truly deserve.
I do believe that, in the long run, the stock price of a company reflects what the public thinks of them more than just the discounted cash flow generated by future earnings.
From that point of view too, here’s an appeal to Facebook: Shut this internet.org thing down, guys. It stinks.