MorningWord 11/23/16: Silicon Valley’s Black Mirror

by CC November 23, 2016 10:09 am • FREE ACCESS

It’s been a newsy year for Facebook (FB). In the Spring, at the height of the presidential election primary period, a former employee made news by stating that curators routinely suppressed conservative news stories in their Trending Topics section.

These new allegations emerged after Gizmodo last week revealed details about the inner workings of Facebook’s trending news team—a small group of young journalists, primarily educated at Ivy League or private East Coast universities, who curate the “trending” module on the upper-right-hand corner of the site. As we reported last week, curators have access to a ranked list of trending topics surfaced by Facebook’s algorithm, which prioritizes the stories that should be shown to Facebook users in the trending section. The curators write headlines and summaries of each topic, and include links to news sites. The section, which launched in 2014, constitutes some of the most powerful real estate on the internet and helps dictate what news Facebook’s users—167 million in the US alone—are reading at any given moment.

The backlash was pretty severe and the company ended the curation and went straight algorithmic for the section. The results? Disastrous. It turns out the wisdom of the crowds is not that wise. Facebook now has a fake news problem, and the backlash against the company is even more severe.

Both controversies are related:

Facebook executives conducted a wide-ranging review of products and policies earlier this year, with the goal of eliminating any appearance of political bias. One source said high-ranking officials were briefed on a planned News Feed update that would have identified fake or hoax news stories, but disproportionately impacted right-wing news sites by downgrading or removing that content from people’s feeds. According to the source, the update was shelved and never released to the public.

“They absolutely have the tools to shut down fake news,” said the source, who asked to remain anonymous citing fear of retribution from the company. The source added, “there was a lot of fear about upsetting conservatives after Trending Topics,” and that “a lot of product decisions got caught up in that.”

There’s a whole host of historical reasons why cracking down on fake news would be asymmetrical. Right wing media rose in response to perceived liberal bias in mainstream media. Because it’s less established, with less mainstream gatekeepers it’s a much bigger free for all. And any hint of “elites” controlling access to information (like the Facebook curators controversy) leads to an opening for new players (in this case fake news sites like EndingTheFed from Macedonia). But this risks a media environment where no news is trusted, and at the same time, anything can be believed.

Since the election, the company (and to a lesser extent other social media platforms) have been called out for their inability to suppress fake news, with some going as far to say it influenced the election itself. Here’s an analysis from Buzzfeed. Note the the timing of the end of curation in May:

In the final three months of the US presidential campaign, the top-performing fake election news stories on Facebook generated more engagement than the top stories from major news outlets.


During these critical months of the campaign, 20 top-performing false election stories from hoax sites and hyperpartisan blogs generated 8,711,000 shares, reactions, and comments on Facebook.

Most are assuming that the fear of backlash tied Facebook’s hands, but others, like Elad Gil’s (here) wonder whether the company even wants to “address the problem”. And maybe more damning for a giant tech company, they just suck at machine learning.

For the most part, critics recognize that this is no small task. But observers have been less than assured by CEO Zuckerberg’s public commentary, which has seemed tone deaf so far. And the company’s plan to fix the problem is less clear than mud.

And it’s not just fake news that’s a problem for Facebook. The latest, from the NYT’s Tech reporter Mike Issac is having to do with Facebook’s openness to suppressing real news in China as an entry into the company’s last great user frontier:

The social network has quietly developed software to suppress posts from appearing in people’s news feeds in specific geographic areas, according to three current and former Facebook employees, who asked for anonymity because the tool is confidential. The feature was created to help Facebook get into China, a market where the social network has been blocked, these people said. Mr. Zuckerberg has supported and defended the effort, the people added.

For a company that sports one of the largest public market capitalizations on the planet, just $9 billion shy of Exxon’s (XOM) $360 billion, despite Facebook having just 10% of XOM’s sales, finding ways to grow their 1.7 billion strong user base will be imperative to continue to justify their valuation and allow them to use their currency to make acquisitions (paid nearly $20 billion for WhatsApp in 2014 which had no revenues and 60 employees) and to finance their future plans in VR, AI, etc.

Former Facebook employee, Antonio Garcia Martinez, author of the WSJ & NYT’s best seller Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, pointed to the simple math that could eventually halt the company’s global domination and its stock’s advance. From page 352, (chapter titled Monetizing the Tumor):

“The company can solve this by either making more humans (hard for even Facebook), or connecting what humans there are left on the planet”


Ben Thompson who writes the StraTechery Blog, wrote this AM that while the story is a “bombshell… it’s not a surprise in the slightest”, putting simple math behind their intentions:

Facebook in general and Mark Zuckerberg in particular could not be more craven in their expressions of ardor for China’s 1.4 billion potential Facebook users (721 million on the Internet, up from 705 million in 2015), and no wonder: access to the Chinese market is the single most transformative possibility when it comes to Facebook’s growth prospects. Not only would access to China be a (massive) short-term gain for Facebook proper, but it would also provide a longer runway for Facebook’s diversification efforts (Instagram, WhatsApp, Messenger, Oculus) while providing a market for those very same products.

Now Zuck wasn’t the guy who created a company suggesting “You can make money without doing evil“, but as Thompson points out:

Zuckerberg is deluding himself if he thinks that Facebook will be a positive force for openness if it is allowed into China: not only will the Chinese government lean heavily on the company to engage in self-censorship, it will use Facebook’s acquiescence as evidence of the superiority of China’s approach.

This debate started publicly in the Spring when people were in charge of machines, then got worse into and out of the election when it was shown how bad things can be when the machines take over. Now it’s reached c-level cubicles where the company (like many before it, including Google) feel the need to satisfy Wall Street, at the possible expense of the greater good. (These companies often argue that information, even if censored, is the greater good. The jury is still out on that.)

Whether Facebook likes it or not they are now gatekeepers to information for much of the world. And with great power comes great responsibility. Whether it’s fighting fake news or having the balls to avoid participating in propaganda in exchange for market share.

And this theme isn’t just confined to Facebook and news. Silicon Valley runs on an assumption that machine learning and wisdom of the crowds is the fastest path to greater efficiency. And that is true. But greater efficiency doesn’t always mean better.

Simply, sometimes the real world hits you in the face. AirBnB seemed caught off guard that a complete free for all for rentals with access to renters profile pics would result in wide-spread discrimination. Facebook seems caught off guard that a free for all sharing system would push the craziest, most tabloid and fake news to the most prominent spot. (have they never checked out at a supermarket?)

Let’s face it, Silicon Valley is a bubble. And I don’t mean a bubble of market capitalizations. A lot of optimistic futurists head to the Valley with dreams of bringing to life all those amazing things they read in the sci-fi books from their youth (we were promised jetpacks). But with the possibility of Facebook fast forwarding us into a post-fact Orwellian world, and the sharing economy heading towards ranking all our real world interactions with a star rating, what seems to be missing is any realization that a lot of those sci-fi books were about a dystopian future.

The answers are not easy. And we don’t envy the tough choices that need to be made. But ironically, what could be a good start in helping Silicon Valley navigate these real world issues, is a less sycophantic Silicon Valley media. Coverage of these latest controversies has been promising (click the hyperlinks in this post to see some great reporting). Hopefully this is just the beginning of the conversation.