Facebook has four distinct groups of stakeholders, but it’s doing an awful job in its relationship with each.
Despite the urgency stemming from the outrage over Facebook’s data-collection practices, the company has become increasingly dysfunctional.
Founder Mark Zuckerberg waited five days before responding to the data scandal, but he failed to apologize.
That and other Facebook behaviors are very strange considering that to survive it must immediately mend relationships with consumers, policymakers, shareholders and advertisers.
The latter three — policymakers, shareholders and advertisers — are unhappy over Facebook’s treatment of consumers.
The growth-at-any-cost memo defending data collection by Facebook Vice President Andrew “Boz” Bosworth, completely blows up Facebook’s false propaganda about what it does.
Such debacles are merely the latest covering several years as Facebook continues to incur the wrath of critics. This includes a six-point indictment by a leading professional publication, AdAge.com. AdAge is a daily must-read for advertising professionals.
AdAge columnist, Simon Dumenco, posed this question: “Facebook Under Siege: Will It Ever Grow Up?”
It doesn’t look like it.
“Despite Facebook’s Harvard-dorm-room roots, the company’s M.O. is more stubbornly childish than post-collegiate,” he wrote in a January 2013 issue.
“Think of Facebook as a self-absorbed, petulant brat, one that doesn’t understand how to play well with others – users, investors, partners, competitors,” he explained.
His six criticisms:
1. The social medium showed its true colors as being anti-social when it provided privacy shortcuts for account-holders, but then quickly squashed the service.
2. Facebook uses “shifty (if technically legal) tax-dodging practices.” He wrote Facebook employs a disingenuous technique called the “Double Irish.”
Excluding its U.S. revenue, Facebook’s global advertising revenue is funneled through Facebook Ireland, which launders money and moves it to the Cayman Islands. This means Facebook’s non-U.S. revenue $1.34 billion in 2011 had a tax rate of .3 percent.
3. Facebook’s Instagram tried a new Terms of Service form of chicanery, but was forced to cancel it. The policy meant Instagram could sell your pictures without paying you.
4. Facebook is an undesirable business partner. It works to maximum its profits by constantly “changing the rules of the road for partners.” Mr. Dumenco cited Zynga as an example of being victimized by Facebook.
5. Facebook CEO Mark Zuckerberg was allegedly part of the Poke coding team, which is accused of ripping off the Poke app by modeling it. Poke “…lets lets users send self-destructing texts, videos and images…”
6. Facebook joins Amazon in refusing to use the advertising sector’s Ad Choices, which is the accepted ad-privacy program. This means advertisers must spend an inordinate amount of money and time to address privacy issues.
For more details, you can read Mr. Dumenco’s column here.
From the Coach’s Corner, I’ve tried to keep an open mind about Facebook, but as a business-performance consultant I’ve had my doubts. (Disclosure: I do maintain a small presence on Facebook merely for SEO reasons for this portal, and I recommend other businesspeople do the same – if Facebook starts showing maturity.)
Here are some of the Biz Coach articles that mention Facebook:
‘Why Facebook Is Failing Marketers’ — Forrester Study — As a digital advertising option, hundreds of savvy marketers rank Facebook last in “business value” according to a critical Forrester Research study.
9 Tips to Evaluate Online Advertising Options — Are you at a point at which you want to advertise your company on the Internet? But you’re unsure which sites are the best for you? The options are endless and can be confusing. The last thing you want to do is to market a product or service that doesn’t reach the right people.
Government Warns Business in Ruling Against Costco on Social Media Policy— Many companies encourage their employees to promote their offerings and services on social media. But beware, it was bound to happen: The trend has caught the attention of the National Labor Relations Board (NLRB), which can dictate your social media policy.
Facebook Privacy: Advice for Job Seekers and Employers — The practice by some companies to require job seekers to reveal their Facebook passwords so they can spy on the applicants’ private information prompts a couple of Biz Coach reactions: For job applicants and companies. For job seekers: Any company that would require disclosure of your Facebook password is an undesirable employer.
“Ethics is knowing the difference between what you have a right to do and what is right to do.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.