Pando

This is why Facebook will never become Yahoo (or Twitter)

By Sarah Lacy , written on January 28, 2016

From The Disruption Desk

When Facebook was starting to surge, I met with a then very much on top but increasingly defensive member of MySpace’s management team.

“Look, we are just very different companies,” they said to me over Vietnamese food. “And we have 100 million members. That’s essentially one out of every three people in the US. We’re just not worried.”

Ah yes. The words said by every embattled tech company that doesn’t yet get that it’s embattled. Before Google there was always an Internet darling of the public markets of each era-- Netscape, eBay, Yahoo… and they spent a few years on top and then things went very wrong. Amazon is exempt from the pattern because it never was “the darling.” eBay was in Amazon’s time. Google was the first to break the trend, and Facebook was the second.

They’ve done so by different mechanisms. Facebook has made earlier and savvier acquisitions. Google had such a god damned amazing core business model that it had the luxury of time and money to figure out what else it was and it threw nearly everything at the wall. But both have stayed paranoid, both have taken new markets being formed as threats to theirs. Neither goes around saying “Look they just do something different. Look at how many users we have!”

To wit: Messy human social networks couldn’t be farther from what algorithm oriented search is. And even that, Google felt it needed to have a stake in. In a departing interview with Walt Mossberg and Kara Swisher then Google CEO Eric Schmidt sounded downright crestfallen at his “failure” in social. We should all fail as spectacularly as Google-- one of two companies essentially tied for largest market cap with Apple at about $500 billion. Google did fail at social-- but not for lack of trying. But it won spectacularly with early Web 2.0 purchase YouTube and one of the best acquisitions in the history of tech, Android.

It’s no coincidence that both Google and Facebook are two of the only companies that seem to make acquisitions work-- whether large or small.

Facebook may be even better at surviving the four year Internet darling curse. It got the promise of messaging as the next thing after social so quickly and spent so aggressively with multiple bets it makes you wonder if Mark Zuckerberg is a time traveler.   

The only company to carve out a non-Facebook foothold in that space has been Snapchat. And that’s in part because it’s very DNA is so orthogonal to Facebook. It’s in larger part because it was the only one who wouldn’t sell.

But it’s beyond just that. It’s little micro things. Consider Bloomberg’s profile with Chris Cox on changing one most core Facebook features you can imagine: The Like button. It’s being swapped out for “reactions” a series of adorable and very mobile-like animated emojis.

There are so many elements of this story that speak to what Facebook has done so well and why it stays so unbeatable:

A willingness to change everything.

You could argue a Like button is as iconic to Facebook as 140 characters and reverse chronology is to Twitter. Similarly, Timeline was a major change to the look of profile pages. And obviously ripping messaging out of the app was a very dramatic change.

Not changing things for the wrong reasons or just to change them.

Facebook has revisited the Like button many times, but not changed it yet. One of the biggest things demanded by the outside world was a “dislike” button. It sucks to hit “like” when a friend’s mother dies, for instance. “I wish Facebook had a dislike button” may be a more common comment on the site than “LOL.”

But Facebook was concerned it would start to make the site too negative. Facebook is to Buzzfeed the way Twitter is to Gawker. The latter are “give people what they want!” the two former are “we think people want things that are upbeat.”

Say what you want about Facebook’s censorship and whether it goes too far. It’s a happy place to be. Twitter feels abusive. The same people come off different in each environment. On Twitter, I can’t compliment another journalist’s work without winding up in a fight. (This happened last week.) On Facebook, I share baby pictures and tell people how much I support them in rough times or how great their new profile picture looks.

That’s not an accident. Facebook has artfully constructed a different mood. Facebook was widely criticized for “toying” with users emotions by testing their reactions to certain things shown in their feeds. But to scale something that large and keep it from becoming a cesspool is… well, mostly unheard of on the Web.

An audience that lets it.

It’s not that Facebook hasn’t had massive user backlash. But it’s learned from it, and the audience has learned from Facebook. They may not hugely trust the social network, according to various brand surveys, but they mostly get that it’s a benign dictator and at the end of the day it’s Facebook’s house. Facebook doesn’t roll back when it commits, and users mostly grow to like whatever they were protesting against-- whether the Newsfeed or Messenger as a stand alone app. Contrast that to a place like Yahoo or Twitter that just didn’t make changes for so long, the user contract was very different and far more volatile.

Never sunsetting.

Yahoo has spent ten years arguing why the things it does are totally in line with where the market is going. It doesn’t need to change! For years, it was a graph showing time spent online and ad dollars spent online, arguing at some point the latter would simply catch up to the former. And voila! As one of the largest sites on the web, Yahoo would benefit. Didn’t happen.

Next it was pointing to assets like IM and Flickr arguing, “We were always social! We were social before social!” They weren’t and the arguments made little difference in reality. Then it became, OK, look, here’s what people do on their phones: “They check news, entertainment, sports, stock scores, messages-- those are all the things we’ve always done!” Yep. But they weren’t doing it on Yahoo. They still aren’t.

Similarly, Twitter has spent years believing it just needs to better communicate what it’s for. If having hashtags and Twitter handles on every single news, television, sporting event and awards show doesn’t do that, I’m not sure what a celebrated new CMO will.

Facebook never got trapped in this thinking. Photos were the core of Facebook, and when Instagram took off, Facebook could have shrugged and said, we’re so much bigger and our photos are in your social graph! Instead they took the threat seriously. Ditto: Messaging. They knew messaging was just a tiny thing within the big desktop app. To reinvent it and make it modern they had to break it. They didn’t just sit back and say “People send X-billion messages on Facebook everyday. Ergo we’re the largest in messaging!”

Not only that: Facebook has created or bought three new valuable properties in WhatsApp, Instagram, and Messaging. It’s future was right there. And still it continues to innovate on the core Facebook property. With reactions, it has taken something very mobile-like and updated one of the most desktop-like looking aspects of Facebook in the “Like” button. Yahoo has nothing close the Facebook’s newer, hotter properties and can’t even breathe new life in its own properties.

Former embattled Twitter CEO Dick Costolo has often said his biggest mistake was running a company at the same time Mark Zuckerberg was running Facebook. There’s a lot of truth in that.