Market Intelligence Research

Yes, this article has a sensational title, saying that you shouldn’t get your news from Facebook.  You’d have to be a fool to believe the opinions of your former classmates, or worse, the views of people you don’t even know, or still worse, to believe advertisements or apparent news stories on a site like Facebook.  The point of this article, though, is that by not editing its content, or, at least making sure that the advertisements and posts on its site aren’t destructive, Facebook has set itself up for government intervention.  It is sad, really, because Facebook’s users should damn well know better that the advertisements and posts can be garbage, biased, or false.  But, who said most voters are smart?

Just like when sell side analysts were blamed for the Internet stock craze in the 1990’s, mom and pop investors should have known better to listen to these analysts spouting their views to the media – views, by the way, they didn’t pay for – but they didn’t.  Then the government intervened, threatening investment banks to change their ways.  And over time, much as a result of this debacle, budgets for sell side research has been decimated.

Companies have to do a good job of making sure they don’t hurt the public, regardless of the rules currently in place.  When people get hurt, the public look back on the actions of companies and lay judgement on past actions.  I take heart in the idea that some companies are quite moral.  Take for example, when just before the Great Recession of 2008, Mr. Ford, then then CEO of Ford, made the decision to no longer create gas-guzzling Expeditions and embarked on a program to make aluminum-based frames for the most popular truck in the US – the F150 – to save on fuel costs.  I look back at this as a very moral – and smart move.  And when the recession hit, demand for Ford products were slightly higher than for Chrysler and Chevy products, and Ford didn’t need a bailout like General Motors and didn’t have to get acquired like Chrysler.  History judges.

Back to Facebook, it is now clear that the Russian Federation posted stories to Facebook in a likely successful attempt to change the outcome of the 2016 US Presidential election.  Consider that there are spies all around the world, using old style methods of information gathering and influence peddling. It should be no secret that each country intends to learn about their allies and enemies and pursue covert activities to influence events to improve that country’s plight.

Remember how upset Germany was with the US when the Snowden information revealed that US was tapping phone calls made by German PM Angela Merkel?  She and other German authorities were very upset with the US and took diplomatic actions and put into place information privacy laws that would subtly change the influence US companies would have in Germany – and therefore the European Union.  This has had a chilling effect on US interests in Europe.

I think it would be reasonable to expect the US to penalize Russia for its influencing of the US 2016 election.  But how?

• The US Government can ask nicely.  That won’t work, so long as the US continues to attempt to influence policies of other countries.
• The US can put up electronic barriers between Russia and the US.  That won’t work because of the structure of the Internet today.  To change the Internet’s architecture would be detrimental to US interests.
• The US could require US-based news agencies – and social media – to police their content.  That will backfire and would almost certainly change the advertising industry and potentially infringe on free speech.

Or, the US can rely on self-policing by the social media giants themselves.  Google, Facebook, Twitter, Reddit and all the others had better hurry up and fix this.