Social Media: ‘Superfund Sites’ for Reputation Risk!

A current challenge that Facebook is experiencing, commenced with…(a.) the introduction of continuous – infinite ‘newsfeeds’ in which there is no conventional – readily understood (human conditioned) stopping or transition points, combined – integrated with (b.) ‘tagging’.  This is largely how Roger McNamee, author of ‘Zucked: Waking Up to the Facebook Catastrophe’ sees it, and I agree!

Kindly, some argue, and it may well be the case…Mr. Zuckerberg and Facebook, as-a-whole, may not have accurately projected or understood what affects, if any, these two significant policy-practice changes would produce, as McNamee suggests, even though, to his admission, he has no direct evidence that was the case.

Again, kindly, Mr. McNamee suggests…Facebook, ala Mr. Zuckerberg and Ms. Sandberg may have exercised various resistance to introducing
additional exploitative technologies which no doubt, are consistently and aggressively pitched.

I suspect too…some of these (additionally exploitative) technologies ala the infinite ‘news feeds’ and ‘tagging’, etc., to name just two, were characterized, as they often are, as constituting the natural – obvious technological progressions for Facebook that would (a.) contribute to sustaining – attracting users, and (b.)ultimately function as preludes to developing additional streams of revenue.

Mr. McNamee believes Mr. Zuckerberg and Ms. Sandberg’s initial resistance to introducing…these exploitative technologies may have, broadly speaking, merely been wore down overtime – in degrees, but probably in large part the erosion of their resistance emerged from the external pressures of Facebook going public, i.e., its initial public offering (IPO) on May 18, 2012, with a peak market capitalization of over $104 billion, to become the largest IPOs in history.

Specifically, Facebook’s leaderships’ capitulation manifested as…allowing other applications to integrate, acquire, and exploit Facebook user lists and (personal) data for their benefit. But of course, not without Facebook extracting substantial fees for that privilege.

This, according to Mr. McNamee, is what emerged from…Mr. Zuckerberg and Ms. Sandberg’s capitulations, i.e., changing Facebook’s policies to permit this to occur.  Perhaps this and other related decisions were reached, with less than optimum insight regarding the range – depth of variously adverse (longer term) effects they would, rather rapidly, begin producing. Some of which, users and others would take umbrage, once realized.  Perhaps too, this was another instance, of, no doubt countless more to come for the social media sector as-a-whole, made in the proverbial ‘uncharted water’.

I. Tagging

Essentially, tagging functions as follows…technologies are introduced for the purpose of distinguishing – identifying humans, ala Facebook friends, in a posted photograph and/or post, and sending those humans a message, i.e., a ‘tag notice’. 

Such notifications, throughout one’s ‘friends list’ presumably, and actually…influence – encourage the recipient to read the original post. This activity, Mr. McNamee, and numerous others, describe as constituting…

  • a personal sense of validation combined with a felt need to reciprocate which, in turn, leads to ‘virality’, to what was initially, at least, a relatively fairly-innocuous, mundane, and probably harmless posting.

Perhaps what occurs, variously on the not-so-good end of such communications, in the effected Facebook users’ world…is akin to a previously reported response by Mr. Zuckerberg to a reporter’s question…

  • ’a squirrel dying in one’s front yard (conceivably) becomes more relevant to one’s interests and worthy of communicating to ‘friends’ than to the larger global realities, (for instance) children dying from malnutrition and/or disease in un – under-developed or war-ravaged countries. 

Perhaps, it is not too much of a dramatization to suggest another outcome related to ‘tagging’ and perpetual ‘newsfeeds’ that would variously affect Facebook users is…

  • their vision of the world turning very much inward, and
  • now, users can receive ‘keystroke speed’ validations, along with opportunity for reciprocal (keystroke speed) communication.

II. Facebook’s Continuous – Infinite Newsfeeds

It is also reported that, at some point, Mr. Zuckerberg – Ms. Sandberg may have, in some manner, recognized that Facebook’s ‘newsfeeds’ were becoming less (user, receiver) neutral in terms of…

  • language, tone, emphasis on persuasion, contemptuousness of specific individuals, ideologies, and conspiratorial characterizations, etc. 

Perhaps, this absence of neutrality…and noticeable shift to the above, i.e., the introduction of acrimony, contention, and discord was, in part, a consequence – related to the policy change that permitted ‘tagging’ which likely contributed to unearthing – unleashing and communicating much more specific biases, some of which, it has been shown, were generated by BOTS which exacerbated the rancor, again at keystroke speeds.

Reporting on this, coupled with Mr. McNamee’s insights…articulated expertly in his book, suggests Mr. Zuckerberg may have indeed held perspectives on these matters, ala potential – probable outcomes upon executing ‘continuous newsfeeds’ that may trend toward expression of biases and less neutrality. One can only conjecture that he (Mr. Zuckerberg) kept those perspectives out of this particular-decisional equation.

Obviously, I don’t know, I wasn’t there. However, outcomes, far less open to argument, are the realities that…

  • many Facebook user experiences were being variously altered without their knowledge or understanding, and
  • there were no filters, so to speak, put in place to neutralize these altered user experiences, which, not-so-arguably became the ‘real prime space for BOTS to thrive’.

Through my lens as an intangible asset strategist and risk specialist…the time is now for ensuring principals, at the discussion stage, are fully aware – positioned to legitimately foresee-anticipate the potential adverse influence, if any, their introduction may wield, e.g.

  • when they are cognizant of such influence and how it can, could, will be adversely applied merely by changing – not changing – adopting – not adopting particular-policies which may – could have mitigated, if not minimized, user – society risks and adversity may elevate.

My counsel to business leadership and decision makers…with respect to avoiding-mitigating the emerging – asymmetric reputation risks this morning, this afternoon, tonight, and their repetition tomorrow…

  • someone needs to be ‘in the room’ to respectfully inform how, and in what waysm policy changes may affect what users, regulatory – oversight bodies, and ‘the world’ thinks relative to this company’s reputation.

III. Fiduciary Responsibility

Too, circumstances as I have described above, at least, in my view… constitute fiduciary responsibilities as cited in Stone v. Ritter, wherein a Delaware court (2006) drew attention to board – director oversight (management, stewardship) of compliance programs and company assets.  In part, the court’s decision read…

  • ensuring the board is kept apprised of and receives accurate information in a timely manner that’s sufficient to allow it and senior management to reach informed judgments about the company’s business performance and compliance with the laws’… 

A fiduciary responsibility as this Delaware Court laid out in…Stone v. Ritter, translates as being kept apprised and informed.  Now that’s decision-making that goes to the very heart of today’s go fast, go hard, go global intangible asset intensive – dependent businesses, which obviously Facebook is one. 

IV. Reputation Risk

At some point, better sooner than later…once the often already undeniable facts intellectually register with decision makers as actually being undeniable, company principals are fiduciarily obliged to take responsibility for their actions and decisions…

  • with respect to Facebook, in this instance, they have yet to bear the cost or consequences of what they do – did…the consequences, argues Mr. McNamee.

Should such or similar actions – policies by the Facebook’s, et al manifest as full blown reputation risks…highly likely, I believe. And, it may be necessary to produce evidence that their leadership had not ‘thought through the problems and adverse outcomes that a change in policy may before them, at an intellectual level?

  • instead, solely through a business model, financial objectives and mission.

The issues and challenges which theFacebooks’s, Instagram’s, Twitter’s, Google’s etc., have presented for their respective, but highly intertwined, global populations of users, often to mediate and regulate independently. The more brazen consequences of which, users have experienced in the recent 2 – 4 years, are, what I suspect, merely constitute the initial minimums, ala, the Cambridge Analytica’s, algorithmically manipulative BOTS, and cellphone farms, etc.

What these tech – social media companies are…variously influenced to do, what they are-capable of doing, if so moved, and what they permit – tolerate on their platforms…

  • eventually, probably sooner than later, will trigger – materialize from bombastic political hyperbole and posturing by those sectors – entities seeking some manner – level of intervention, i.e., oversight, regulation, and remediation, etc. 

Again, through my lens, these are indeed, extraordinarily challenging issues which…at minimum, should seek mediation of the technological, the intellectual, and the ethical with the inevitabilities of the future. 

But, the distinctions between legitimate – illegitimate applications…as of now, appear to lie, almost exclusively, with an application’s developer and the prospective buyers, some of whom, to date, have exhibited little or no obvious deference to the sense of assuming responsibility for a consequence.

The consequence(s), which are all but sure to eventually materialize and cascade…throughout the relevant technology – social media sectors, will surely be framed in milieus of the ideological, political, and legislative.

And, the no doubt, various ways ‘these issues’ have already and will be framed…i.e., as blatant – knowing disregard for consequences in favor of generating revenues. The initial hit (risk) to companies will likely be, as noted here, to their reputation.

Most respectfully, these, and other similar issues before us…are variously challenging for the operationally unfamiliar to fully grasp ‘what the issue is, it’s consequence, if left as is, and what, if anything, should be done about it’.

An important note to readers…the inspiration underlying this post originated from a 12-minute segment from NPR’s ‘On The Media’ aired February 9, 2019 in which co-host Bob Garfield interviewed Roger McNamee, author of ‘Zucked: Waking Up to the Facebook Catastrophe’. Some of the language – concepts in this post evolve directly from Mr. McNamee’s interview. I am responsible however, for re-conceiving the interview in the context of ‘company reputation risk’.

Michael D. Moberly, February 12, 2019 St. Louis [email protected] the ‘Business Intangible Asset Blog’ since May 2006, 650+ published posts, where one’s attention span, business intangible assets, and solutions converge’!

Readers are invited to explore more blog posts, position papers, video, and books at https://kpstrat.com/blog

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