Facebook chief executive Mark Zuckerberg unveiled a major strategy shift on Wednesday, declaring tha
The new platform will complement the original Facebook service, an open forum where over 2 billion people exchange news and information, but also marks a significant pivot for the company and the social media industry.
The billions of dollars spent annually by advertisers to reach Facebook users has made Zuckerberg one of the world’s wealthiest men. But users are growing increasingly uneasy with the underlying premise of the company’s business model: tracking their personal data and selling it to advertisers and others.
On Wednesday, Zuckerberg said consumers are now demanding a more private, more personal online experience.
“I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever,” Zuckerberg wrote in a blog post. “This is the future I hope we will help bring about.”
The move follows a brutal series of crises at Facebook. The company has been implicated in efforts by the Russian government to tamper with the 2016 US presidential election. Personal information on about 50 million users was illicitly obtained by Cambridge Analytica, a political consulting firm with ties to Donald Trump’s presidential campaign. Data on millions of other Facebook users was stolen by hackers, and Facebook was used to spread hateful and misleading messages that may have inspired murderous violence in the nations of Myanmar and India.
The scandals have hammered Facebook’s reputation. Roger McNamee, an early investor in Facebook and author of “Zucked,” a highly critical book about the company, said that Zuckerberg’s announcement is partly intended to break the cycle of bad news. “Their brand is getting crushed,” said McNamee. “They need a PR win.”
David O’Brien, assistant director of research at Harvard University’s Berkman Klein Center for Internet & Society, compared Zuckerberg’s statement to the 2002 “Trustworthy Computing” memo issued by Microsoft Corp.’s cofounder Bill Gates. Back then, Microsoft had developed a terrible reputation for building insecure, easily hacked software. The top-to-bottom transformation of the company’s security practices announced by Gates helped rescue its image.
“This is the Trustworthy Computing moment all over again,” said O’Brien.
Zuckerberg said that all the messaging services would use end-to-end encryption to ensure that nobody — not even Facebook — could view the contents except senders and recipients. This would make it impossible for Facebook to use the information for marketing purposes, raising questions about how the company will profit from the service.
In addition, Facebook will redesign Messenger, WhatsApp, and Instagram so that they will seamlessly communicate with one another, instead of operating as separate, incompatible services. This part of the plan was previously announced in January. Critics of the company said that it was intended to fend off a possible demand by US antitrust regulators that Facebook divest one or more of its messaging services. If the three messaging networks are tightly connected, such a divestiture could become almost impossible.
But Michael Cusumano, a professor at the MIT Sloan School of Management, thinks app integration is also paving the way for Facebook to become a financial powerhouse. The New York Times has reported that the company is looking to establish its own cryptocurrency, a potential rival to bitcoin. Cusumano said that this could enable Facebook to become an international currency exchange system, enabling users to instantly shift money anywhere in the world through the merged instant messaging network. Facebook could profit either by charging fees or by earning interest on money deposited by users.
If it works, Facebook would make a fortune off the messaging system, even without advertising revenues, Cusumano said.
The new network would also embrace the concept of self-destructing messages first popularized by Snapchat. A user could order the software to wipe any message after a month or a year. Or it could be programmed to archive old messages indefinitely.
Snapchat’s parent company, whose stock was already trading about 40 percent below its March 2017 initial public offering price, fell 2 percent on Wednesday. Facebook rose less than 1 percent.
Zuckerberg also promised that Facebook would only store its users’ information in countries that respect human rights, especially privacy. “Upholding this principle may mean that our services will get blocked in some countries, or that we won’t be able to enter others anytime soon,” Zuckerberg said. “That’s a trade-off we’re willing to make.”
By contrast, Apple has agreed to store information about its Chinese customers in China, raising the possibility that the Chinese government might force the company to hand over information about political dissidents.
It’s unclear whether the proposals will lead to changes at the original Facebook service. The company has said it will soon enable Facebook users to delete their entire usage history. But it’s unknown whether they’ll be given the option to delete data selectively — for instance, by wiping out their comments and posts after a year has passed.
Longtime Facebook watchers reacted to the news with a mixture of praise and skepticism. “Privacy safeguards for Facebook users are long overdue,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center. “Nonetheless, Facebook dominates the Internet messaging market. To ensure competition and innovation, there should be other companies, and Facebook should be required to divest WhatsApp.”
McNamee said that better private messaging does little to change the fact that Facebook uses a variety of other methods to monitor the behavior of billions of Internet users.
“They track people everywhere,” said McNamee. “So until they stop tracking people everywhere, they’re going to remain a huge challenge for consumers.”