Back in 2017, before the grisly tale of Cambridge Analytica shocked the world into taking private data more seriously, Facebook was facing up to a quite different problem.
Although it had enjoyed more than a decade of year-on-year growth, the California-based social-media giant was experiencing its first decline in its most profitable market. Fewer people from the United States and Canada were actively using the service. Even more worrying were the increasing numbers of young users migrating to other platforms. Facebook, it seems, had attained the one reputation that high-tech companies dread the most. It had somehow become the social media of choice for (gulp) the middle-aged.
How this happened is the story of how modern technology giants fight to remain relevant. It’s about adapting to the ever-changing marketplace, while it also says something about the next evolutionary step of social media. This might not mark the beginning of the end for Facebook, but we can be pretty sure that the success story cannot continue unless it moves with the times.
Facebook's problem is that cool becomes uncool with remarkable speed in the modern world. Corporate collapses might still be a relatively rare phenomenon, especially when we're talking about mega companies, but many of those that have declined or disappeared did so because there was some fundamental flaw in their business model. Napster failed once it tried to make its hugely popular (but completely illegal) file-sharing service legitimate. Yahoo's slump in the face of Google's success started the moment it stopped providing a rival search engine and became merely a one-among-many media platform. MySpace fell victim to its naive belief that users would design their own websites, a task that a young Mark Zuckerberg realised he could make much easier for people on his new Facebook platform.
The rule is that companies will be left behind if they don’t adapt, but those that are nimble hold on to their customer base. Apple has been mercenary when it comes to moving forward. It rarely looks back and, arguably, abandons hardware too quickly. Yet this has also ensured that their products have remained popular. In the modern marketplace, bold innovation and willingness to adapt is key. Even that old fogey Microsoft managed to reinvent itself with class-leading products such as the XBox One and Surface tablets that appeal to younger generations.
Fourteen years after its founding, Facebook is beginning to show signs of a strategic lethargy that runs counter to its continued success. Zuckerberg described 2017 as a "hard year", yet the company still generated US$4.3 billion (Dh15.79bn) in profits. This discrepancy cannot last. Facebook faces an existential crisis that cannot be fixed by money alone. That "middle-aged" problem needs more than a tweak of image or corporate branding. It's a problem with the very structure that underpins its business.
That business is what’s called “Big Data”. Facebook’s success comes from the huge amount of data it has amassed on more than two billion users. That data allows the company to do the kinds of things that are now under government scrutiny: user profiling, targeted advertising, and other dark arts of the data technician’s trade. Amassing data is the reason for Facebook’s success, but it is also the reason why it appears to be having so much difficulty adapting to the changing audience.
One of the principles of software engineering is that data is modelled after the world the engineers wish to copy. J H ter Bekke wrote in his seminal book on data modelling: “A model represents a certain view of the real world.” In the case of Facebook, that model is based on individual lives reconstructed inside a virtual space. If that sounds complicated, the reality is simpler to explain. Facebook repeats the formal structures of our lives. It forces us to register with our real-world names, and even has that prohibition written into its rules: “Pretending to be anything or anyone isn’t allowed.” Most of all, it works around the assumption that data is persistent, leading to the absurd situation by which Facebook profiles have often outlived the user.
The result is that behind the facade of Facebook’s clean front end sits an astronomically huge set of data that makes it very hard for Facebook to change with speed. It was slow to respond when Generation Z moved to Snapchat, Secret, and Whisper: services that can more acutely target the needs of the younger generation. And that, really, is key. We think that social media shapes who we are but, just as importantly, we shape our social media. Companies that succeed are those that recognise the generational change.
Young people brought up in the hyperconnected celebrity age, where individuality is celebrated unlike any other time in our history, seek to escape the limitations of their ordinary lives. They want to self-create themselves online, living behind an avatar that might be bolder, braver, less judged, or simply more “out there”. That freedom to be who they want to be is very different to the limitations offered by Facebook, which demands that they remain the person they are.
Needless to say: that freedom is hugely attractive. It also means that the next generation of social media is being modelled on a very different kind of user. It makes for a different kind of social experience. Facebook’s business model requires it to retain its data, but that puts it at a competitive disadvantage compared with, say, Snapchat, where posts are deleted from servers after a short length of time. Whisper and Secret even allow users to post material anonymously, effectively removing the “face” from Facebook.
Whatever social media becomes, we can be sure it will be very different to what Facebook offered in the past. It will more closely reflect the interests, ambitions and lifestyles of each generation as they come to form the all-important 18-25-year demographic. That evolution will require entirely new platforms, as we saw when Twitter emerged, proving a more liberal experience than the almost authoritarian Facebook. We should therefore look for four trends to emerge.
The first trend will undoubtedly be around privacy. The Facebook scandal has pushed data security back into the headlines, but it has long been an issue, with government concern about the private use of strong encryption matched by new companies offering military-grade encryption. Social media of the future will certainly make use of stronger encryption, and the days of centralised data might even be behind us. As hacks of private photographs of celebrities have proved, even the "cloud" has its limitations. With this will be a more liberal attitude to identity. The popularity of the current anonymous services will continue to grow, although whether this will become mainstream is yet to be determined. Strong anonymity encourages more aggressive behaviour, although, of course, anonymity also protects you from the worst of the trolls.
The second trend will be towards disposable data. A message that self-deletes after a short time requires no long-term storage. It means that these companies will require less expensive hardware, and therefore be more profitable, compact, and adroit. This is not as trivial as it sounds. As we produce more data, we face the problem of what to do with it. When Facebook began, it would never have considered the position in which it would eventually find itself, requiring huge data centres around the globe. This trend surely cannot continue. Economically and environmentally it makes no sense to store data that might never be accessed again beyond the moment it was produced.
The third trend will be transparency of our social media. The distinction between social media and real life will continue to break down. This is already happening in some areas. Google is pushing ahead with this kind of work, tapping into the power of phones to track your position to produce a social-media experience of your journeys. Many gamers are already locked into a social-media lifestyle without having to do much. Consoles from Microsoft, Sony and Nintendo link to social networks to automatically produce content. Wearable technology will integrate into our media lifestyle and, in the not-so-distant future, become more closely integrated with the body. Already you can have RFID chips implanted under your skin, enabling you to interact with technology in a way that means you no longer need to carry a key card or wallet. Expect this to increase, but in ways we cannot possibly imagine.
The last trend is as philosophical as it is practical. Human history has always been recorded in our written documents, yet when those documents and the written record are missing, so our history is missing. The European Dark Ages are dark for precisely this reason. The move to electronic storage has led many to wonder if we are entering into a similar period of history when our written records could be lost. Who, after all, is going to pay for the electronic storage of your great-grandmother's cat videos, this morning's Facebook update about your breakfast, or the Tweets your smartwatch made about your last run? Yet with every problem comes a new opportunity. As social media becomes more temporal, and we learn to disregard the trivial, the automated, and the white noise of everyday life, there will be businesses ready to exploit our need to store our really important information for posterity. Given where we stand right now, that might be a blessing. Our modern belief in storing everything cannot continue. Nor should it. Once we accept that some data is ephemeral, we might begin to take the rest a little more seriously.
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Read more:
After the Facebook scandal, questions of privacy and consent still aboundZuckerberg agrees with European privacy law but does not commit
After years of ridicule, my Facebook-free status is now a source of envy – like it or not
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Arctic Monkeys
Tranquillity Base Hotel Casino (Domino)
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The most expensive investment mistake you will ever make
When is the best time to start saving in a pension? The answer is simple – at the earliest possible moment. The first pound, euro, dollar or dirham you invest is the most valuable, as it has so much longer to grow in value. If you start in your twenties, it could be invested for 40 years or more, which means you have decades for compound interest to work its magic.
“You get growth upon growth upon growth, followed by more growth. The earlier you start the process, the more it will all roll up,” says Chris Davies, chartered financial planner at The Fry Group in Dubai.
This table shows how much you would have in your pension at age 65, depending on when you start and how much you pay in (it assumes your investments grow 7 per cent a year after charges and you have no other savings).
|
Age
|
$250 a month
|
$500 a month
|
$1,000 a month
|
|
25
|
$640,829
|
$1,281,657
|
$2,563,315
|
|
35
|
$303,219
|
$606,439
|
$1,212,877
|
|
45
|
$131,596
|
$263,191
|
$526,382
|
|
55
|
$44,351
|
$88,702
|
$177,403
|
The specs
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Motori Profile
Date started: March 2020
Co-founder/CEO: Ahmed Eissa
Based: UAE, Abu Dhabi
Sector: Insurance Sector
Size: 50 full-time employees (Inside and Outside UAE)
Stage: Seed stage and seeking Series A round of financing
Investors: Safe City Group
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Barings Bank
Barings, one of Britain’s oldest investment banks, was
founded in 1762 and operated for 233 years before it went bust after a trading
scandal.
Barings Bank collapsed in February 1995 following colossal
losses caused by rogue trader Nick Lesson.
Leeson gambled more than $1 billion in speculative trades,
wiping out the venerable merchant bank’s cash reserves.
Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Crazy Rich Asians
Director: Jon M Chu
Starring: Constance Wu, Henry Golding, Michelle Yeon, Gemma Chan
Four stars
Three-day coronation
Royal purification
The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.
The crown
Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.
The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.
The audience
On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.
The procession
The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.
Meet the people
On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
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Price: From Dh126,000
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Specs
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Range: 400km
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COMPANY%20PROFILE
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Match statistics
Abu Dhabi Harlequins 36 Bahrain 32
Harlequins
Tries: Penalty 2, Stevenson, Teasdale, Semple
Cons: Stevenson 2
Pens: Stevenson
Bahrain
Tries: Wallace 2, Heath, Evans, Behan
Cons: Radley 2
Pen: Radley
Man of the match: Craig Nutt (Harlequins)
David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
The%20specs%20
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E2.0-litre%204cyl%20turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E261hp%20at%205%2C500rpm%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E400Nm%20at%201%2C750-4%2C000rpm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E7-speed%20dual-clutch%20auto%0D%3Cbr%3E%3Cstrong%3EFuel%20consumption%3A%20%3C%2Fstrong%3E10.5L%2F100km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3ENow%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh129%2C999%20(VX%20Luxury)%3B%20from%20Dh149%2C999%20(VX%20Black%20Gold)%3C%2Fp%3E%0A
The biog
Marital status: Separated with two young daughters
Education: Master's degree from American Univeristy of Cairo
Favourite book: That Is How They Defeat Despair by Salwa Aladian
Favourite Motto: Their happiness is your happiness
Goal: For Nefsy to become his legacy long after he is gon
