A Wall Street View on Social Media

Is all new technology progress? Interesting question. I guess you will different answers, depending on who you ask. But if you ask hedge fund billionaire, Paul Singer, at Elliot Management on Wall Street, you’ll get the following answer:

“Ask yourself the following set of questions: Do people seem better informed today in the developed world? Smarter? Is the discourse more sophisticated? The answer is a resounding “no” to all those questions.”

Elliot Management

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Well, if the new communications technology is not progress, what is it then? I do not dare to answer that question. Still, Elliot Management makes some valid points in their latest letter to investors.

The following extract is published by Wall Street blogger Zero Hedge. To read the full letter you’ll have to subscribe to it personally.

“Some technology represents unquestioned progress, despite causing real challenges to the employment prospects of citizens who are made redundant. For example, recent advances in science and medicine have merely scratched the surface in terms of enhancing our ability to find cures for diseases in an increasingly focused way at sharply diminished cost. Also, the technology of moving people and goods in vehicles and organizing their movement on roads contains tremendous opportunities for cost and energy efficiencies, as do the areas of resource extraction, the development of alternative energy and the efficiency of food production. These are just a few obvious and impactful areas in which technological progress has lots of headroom for human betterment.”

“On the other hand, some technological progress is not really progress at all. Innovations in the technology of communications, including social media, provide increasingly powerful and robust platforms to disseminate information. Unfortunately, these same increasingly powerful and robust platforms are also used to spread information that is untrue, and to package information in tiny bits of faux-knowledge that (because of their sheer volume) leave little room for neither more comprehensive reading nor discussion and contemplation. This fact reinforces our view that young people need to be taught the basics as early as possible – of history, political science, philosophy and civilization. In the absence of that grounding, all of these Twitter and Facebook bits alight on a population that lacks the tools to sort or analyze what they are reading while scrunched over their Androids. (Interesting word, Android; maybe in a thinly-veiled joke, it is meant to describe the hooked users and not the device…)”

“The technology of communications also democratizes news and opinion. Although this development may seem positive at first blush, it also has some powerful negative aspects. Whatever one thinks about the “mainstream” media’s biases, there is at least a set of standards and professional codes of conduct that are more or less followed by established media outlets. Writers are edited, and editors seek to protect franchises against irresponsible communications. Bloggers, by contrast, do not really have to adhere to any such constraints, and making them hew to any standards of professional responsibility is difficult at best. The “blogosphere” effectively makes the dissemination of news and opinion a kind of dense windy fog.”

(h/t: zerohedge.com)

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The Social Media Personality Disorder

The Power of Social Media Is Nothing To Joke About

The Invisible Footnotes of EU’s Media Control Directive

Welcome to Watergate Hotel, Mr. President

The (Very) Small Difference Between Influence and Manipulation

 

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Zuckerberg: US Government Is A Threat To Internet

Facebook-boss, Mark Zuckerberg, seems to be pretty upset by the latest news reports on the US government agency, NSA, trying to build something like a malware empire by setting up a bogus Facebook server to intercept traffic and fool users. On his personal Faceboook page, Zuckerberg lashes out against the NSA, the USA government and its president.

“I’ve called President Obama to express my frustration over the damage the government is creating for all of our future.”

Mark Zuckerberg

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Earlier this week we wrote about Google’s Eric Schmidt directly claiming that the company was attacked by the NSA, and now Zuckerberg is publicly stating that the government has become a threat to the internet.

It’s about time both Google and Facebook and all the other major tech companies show their true colours, take a stand in this matter and act on it.

Facebook-Zuck writes in a status update – dated March 13 – that he personally called the US president, Barack Obama, to give him a piece of his mind.

“I’ve called President Obama to express my frustration over the damage the government is creating for all of our future.”

Zuckerberg also writes – more or less directly – that the US government is a threat to the whole internet.

This is why I’ve been so confused and frustrated by the repeated reports of the behavior of the US government. When our engineers work tirelessly to improve security, we imagine we’re protecting you against criminals, not our own government.

The US government should be the champion for the internet, not a threat. They need to be much more transparent about what they’re doing, or otherwise people will believe the worst.

Google recently announced that all of its searches are encrypted, but that’s probably just a start.

As the guys over at Techdirt.com points out: “The tech industry has to move to a world where encryption is the norm, and not the exception any more. It may suck in the way that it sucked when homes and cars finally “required” locks, but at this point it’s a necessity.”

Decrypted & Related:

 All Human Rights Reserved (h) 2014

Twitter Stocks Tumble on Social Insecurity

The company that runs the popular micro blog platform – Twitter – released Thursday their first financial report since it got listed on the Stock exchange in November last year. Not good. The stock tumbled 24%, making this the worst day in the stock market for Twitter. The reason for the Twitter dump is based on the same assessment that sent the Facebook shares tumbling just after their initial public offering (IPO) – will this company ever be profitable?

“These risks include the possibility that: our user base and engagement do not continue to grow; advertisers reduce or discontinue their spending on Twitter; data partners reduce or discontinue their purchases of data licenses from Twitter; and Twitter experiences expenses that exceed its expectations..”

Twitter Inc.

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Oh, dear! This does not look good for Twitter. The total number of new accounts continued to rise in the last quarter of 2013, but at a much slower pace than earlier. But more alarming;  the actual usage of Twitter have started to decrease.

While Chief Executive Officer Dick Costolo said in an earnings call that he is focused on reversing the trend, Twitter’s stock fell as low as $50 in New York today and was at $50.60 as of 9:35 a.m. Before today, the shares had more than doubled since debuting on the stock market at $26 on Nov. 6

Costolo said on the earnings call that the company has a plan to increase the number of users and engagement, primarily by making the site easier to use.

“Up until last year, our growth has been viral and organic,” he said. “Growth was something that happened to us.” Now “it will be a combination of changes introduced over the course of the year that will start to change the slope of the growth curve.”

But that may be easier said than done.

In the forward-looking investor relations statement, Twitter Inc. reports:

“This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Twitter’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, Twitter’s expectations regarding its revenue, adjusted EBITDA, capital expenditures and stock-based compensation expense for the first quarter and full year 2014. The Company’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the possibility that: our user base and engagement do not continue to grow; advertisers reduce or discontinue their spending on Twitter; data partners reduce or discontinue their purchases of data licenses from Twitter; and Twitter experiences expenses that exceed its expectations. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in the Company’s filings with the Securities and Exchange Commission..”

The future of Twitter is insecure, plain and simple.

“Twitter needs to answer the question about whether it can ever become a mass-market product, or whether it’s more destined to be a niche for news junkies,”  Robert Peck, an analyst at SunTrust Robinson Humphrey Inc. in New York, says in an interview with Bloomberg News.

“Depending on how fast it’s growing, that’s what we’re willing to pay for it.”

Here’s the full report from Twitter Inc.

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All Human Rights Reserved (h) 2014