Big Tech: How fake is it?

By Craige McMillan

Another report on Facebook’s fake accounts emerged this week, but other reports have been out there for a while. I’m beginning to wonder if Big Tech is not simply big deception.

Entitlement isn’t only a welfare-based mentality. It affects all of humanity to varying degrees. Once all the hoopla is removed, Facebook’s income model is much like a monthly magazine. Publishers target a magazine at a specific group of people, hoping to get them to subscribe to the publication. The subscriptions offset some of the cost of producing the magazine every month (building, salaries, writers, printing, mailing, etc).

Most of the income, however, comes from advertisers, who believe they have a product or service that would interest readers of this publisher’s magazine. Advertising rates are set based on whatever the publication decides. Sales of advertising are based on whatever advertisers decide that exposure in the publication is worth to their bottom line.

There was always a huge temptation in the publishing business to inflate the number of subscribers. A higher number of subscribers makes the advertising space more valuable. Most magazines, the ones that still survive in print, have their circulation figures audited annually. The gray area is that lots of places get free subscriptions: medical offices, hotels, airports – any place with significant traffic. Thus “paid subscribers” became the gold standard for advertisers to judge cost per view.

Facebook touts its product as “free,” but it fails to mention that it sells detailed personal information about every mouseclick, and probably by now every thought. Who do they sell it to? Advertisers and lots of places we would never suspect. But you see, at its heart, Facebook is nothing more than a glossy magazine, published electronically, which pays little to nothing for its content (the stuff you create, which belongs to them). Your “subscription fee” is whatever they are able to make by selling and reselling your personal information.

Advertisers want to know the reach and effectiveness of their advertising. Facebook makes this very easy. But is it also very true? What if, as this most recent report suggests, half of Facebook’s accounts are bogus? Bots with made up personal information. Facebook sells “likes,” but do you care if a bot likes you? They also sell advertising, but what if half the “subscribers” that advertisers are buying are really fake? Are bots big consumers?

Advertising results are reported by computer. So were magazine subscriptions, and they quickly grew inflated before subscription auditing appeared. The truth is that without access to Facebook’s algorithms, no one has any idea if their advertising (or any other reporting) is true or fake. And these aren’t magazines; they are huge public companies.

Suppose Facebook were to agree to annual audits of their subscriber numbers and advertising? Let’s say they hire a big accounting firm. One of two things will happen. The fee Facebook pays to the accounting firm will be so large that no real inquiry takes place, results are accepted as reported, and certified as true. Or, the accounting firm demands access to Facebook’s computer code that generated its reporting. Do they get to see the real code? Was it the code running during the time in question? How would the auditors know?

It’s not just Facebook. Google sells advertising that helps your search ranking. But Google’s business is organizing the internet, which they do by … no one knows. Google also controls search ranking. Google and Facebook have roughly 80 percent of internet advertising. Does anybody know what the real numbers are for either of them?

As I mentioned at the start of this column, the entitlement mentality is not unique to the welfare world. Ambitious entrepreneurs, backstabbing coworkers and intellectual property billionaires are no less subject to the entitlement mentality than the rest of us. Perhaps they are more susceptible, because their egos are bigger.

Deception digs its own grave. Sooner or later, the organization, its employees and investors pay the price. If a small start-up firm applies some polish to lackluster results, that’s bad news for the investors when the truth comes out. If a public company reports deceptive results, it is much worse and can destroy people’s retirements.

The problem is: What if you were fudging the numbers before going public? How do you stop without convincing early stock owners that they made a bad investment, causing them to sell? You keep fudging. Eventually, the hole gets so big … well, you get the picture. You can’t get out. Faced with reporting real results that indicate their empires are shrinking, and fudging the numbers to make things look good, which way do you think Big Tech would go?

Earth’s Final Kingdom, book four in my Armageddon Story series, is almost ready!

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