Imperial ambitions - FACEBOOK
From The Economist - April 2016
Mark Zuckerberg prepares to fight for dominance of the next era of computing
NOT since the era of imperial Rome has the "thumbs-up" sign been such a potent and public symbol of power. A mere 12 years after it was founded, Facebook is a great empire with a vast population, immense wealth, a charismatic leader, and mind-boggling reach and influence. The world's largest social network has l6 billion users, a billion of whom use it every day for an average of over 20 minutes each. In the Western world Facebook accounts for the largest share of the most popular activity (social networking) on the most widely used computing devices (smartphones); its various apps account for 30% of mobile internet use by Americans. And it is the sixth-most-valuable public company on Earth, worth some $325 billion.
Even so, Mark Zuckerberg, Facebook's 31-year-old founder and chief executive, has even greater ambitions. He has plans to connect the digitally unconnected in poor countries by beaming internet signals from solar-powered drones, and is making big bets on artificial intelligence (AI), "chatbots" and virtual reality (VR). This bid for dominance will bring him into increasing conflict with the other great empires of the technology world, and Google in particular. The ensuing battle will shape the digital future for everyone.
Empires built on data
Facebook has prospered by building compelling services that attract large audiences, whose attention can then be sold to advertisers. The same is true of Google. The two play different roles in their users' lives: Google has masses of data about the world, whereas Facebook knows about you and your friends; you go to Google to get things done, but turn to Facebook when you have time to kill. Yet their positions of dominance and their strategies are becoming remarkably similar. Unparalleled troves of data make both firms difficult to challenge and immensely profitable, giving them the wealth to make bold bets and to deal with potential competitors by buying them. And both firms crave more users and more data-which, for all the do-gooding rhetoric, explains why they are both so interested in extending internet access in the developing world, using drones or, in Google's case, giant balloons.
The task is to harness data to offer new services and make money in new ways. Facebook's bet on AI is a recognition that "machine learning" - in which software learns by crunching data, rather than having to be explicitly programmed - is a big part of the answer. It already uses AI techniques to identify people in photos, for example, and to decide which status up-dates and ads to show to each user. Facebook is also pushing into AI-powered digital assistants and chatbot programs which interact with users via short messages. Next week it is expected to open up its Messenger service (which can already be used to do things like order an Uber car), to broaden the range of chatbots. And Facebook's investment in VR - it bought Oculus, the cheerleader of this emerging field, for $2 billion in 2014 - is a bold guess about where computing and communication will go after the smartphone.
But Facebook faces rivals in all these areas. Google is using AI techniques to improve its internet services and guide self-driving cars, and other industry giants are also investing heavily in Al though with the deepest pockets and the most data to crunch, Facebook and Google can attract the best researchers and most promising startups. Facebook lags behind Amazon, Apple, Google and Microsoft when it comes to voice-driven personal assistants; when it comes to chatbots, it faces competition from Microsoft and a host of startups eager to prove that bots are the new apps. And its push into VR - which Mr Zuckerberg sees as a stepping stone to "augmented reality" (AR), where information is superimposed on the real world - pits it against formidable rivals, too. Microsoft has jumped straight to AR with its HoloLens headset, its most impressive product in years, and Google, already active in VR, has invested in Magic Leap, a little-known AR startup.
The scale of Facebook's ambition, and the rivalries it faces reflect a consensus that these technologies will transform how people interact with each other, with data and with their surroundings, and will help devices and services anticipate your needs (Google's Inbox app already suggests replies to your e-mails). Conversational interfaces will let you look things up and get things done by chatting to a machine by voice or text. And intelligent services will spread into a plethora of products, such as wearable devices, cars and VR/AR goggles. In a decade's time computing seems likely to take the form of AR interfaces mediated by AI, using gestures and speech for inputs and the whole world as its display. Information will be painted onto the world around you, making possible new forms of communication, creativity and collaboration.
This is the ambitious vision that Facebook, Google, Microsoft and other technology giants are working towards. But along the way there are certain to be privacy and security concerns. Crunching all that information to provide personalized services looks a lot like surveillance, and will cause a backlash if consumers do not feel they are getting a good deal in return for handing over their personal details (as the advertising industry is discovering to its cost) - or if security is inadequate.
Power from the people
There will also be worries about concentration and monopoly, and the danger of closed ecosystems that make it hard for people to switch between services. Facebook's plan to offer free access to a limited subset of websites was blocked by India's telecoms regulator, which argued that it was "risky" to allow one company to act as a gatekeeper. And Germany's competition authority is investigating the way Facebook handles personal data. As its dominance grows, Facebook can expect to face more such cases, as Microsoft and Google did before it.
Striking a balance between becoming ever more intimately entwined in billions of peoples' lives, making huge profits as a result and avoiding a backlash will be one of the biggest business challenges of the century. Even in ancient Rome, emperors could find that the crowd suddenly turned against them. So applaud Mr Zuckerberg-and fear for him, too. ■