Users and Customers

Monday, 2 April 2018

Fascinating, wide-ranging podcast interview (with an excellent transcript) between Vox’s Ezra Klein and Facebook CEO Mark Zuckerberg:

Klein: One of the things that has been coming up a lot in the conversation is whether the business model of monetizing user attention is what is letting in a lot of these problems. Tim Cook, the CEO of Apple, gave an interview the other day and he was asked what he would do if he was in your shoes. He said, “I wouldn’t be in this situation,” and argued that Apple sells products to users, it doesn’t sell users to advertisers, and so it’s a sounder business model that doesn’t open itself to these problems.

Do you think part of the problem here is the business model where attention ends up dominating above all else, and so anything that can engage has powerful value within the ecosystem?

Zuckerberg: You know, I find that argument, that if you’re not paying that somehow we can’t care about you, to be extremely glib and not at all aligned with the truth. The reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can’t afford to pay. And therefore, as with a lot of media, having an advertising-supported model is the only rational model that can support building this service to reach people. […]

But if you want to build a service which is not just serving rich people, then you need to have something that people can afford. I thought Jeff Bezos had an excellent saying on this in one of his Kindle launches a number of years back. He said, “There are companies that work hard to charge you more, and there are companies that work hard to charge you less.” And at Facebook, we are squarely in the camp of the companies that work hard to charge you less and provide a free service that everyone can use.

I don’t think at all that that means that we don’t care about people. To the contrary, I think it’s important that we don’t all get Stockholm syndrome and let the companies that work hard to charge you more convince you that they actually care more about you. Because that sounds ridiculous to me.

There is certainly something to Zuckerberg’s argument here, but the speciousness of the way he formulates it is that a company working hard to charge you more money is undeniably incentivized to care more about you, if you can afford their product or service. I think it’s undeniable that Apple cares more about the hundreds of millions of people who buy its products than Facebook cares about any of its billions of users.

The more apt Tim Cook quote that applies here is this long-standing internet adage: “When an online service is free, you’re not the customer. You’re the product.” Amazon is undeniably focused on low prices. But Facebook doesn’t charge low prices — they charge high prices. To their customers: advertisers. And a cursory look at their financials indicates they’ve been working hard to raise those prices.

The linguistic trick Zuckerberg pulls here is that nowhere in the entire interview does he mention the words user or customer. He only says you (in the plural sense) and people. That’s a dodge, because unlike Apple — and Amazon — Facebook’s users are not its customers — and most of the controversies they are dealing with today all stem from the fact that they favored their customers (advertisers willing to pay ever-higher sums for ever-more-invasively-targeted ads) at the expense of their users.