Wednesday 26 September 2018

All-conquering internet giants have begun to scale back their ambitions

Mark Zuckerberg
Mark Zuckerberg

James Titcomb

It must take a special kind of masochist to run a tech company these days. It was not long ago that Mark Zuckerberg and his peers were feted as wizards of innovation. Today, they are pummelled from all sides. Personal fortunes worth billions of dollars help, but do they make up for daily accusations of tainting democracy and ruining a generation of minds they have faced in the last year?

Tech companies were criticised before then, but they would be bolder about challenging it. Facebook's introduction of the news feed in 2006 was met with a user backlash but the company proceeded anyway. Google's psychological tests, which analysed how minute alterations to the colour of text affected users' propensity to click links, were seen as innovative uses of data, not manipulations. Acquisitions of Instagram, YouTube and Periscope generated little competition scrutiny, and often excitement.

Bold, ambitious mission statements were common. Tech companies talked about making themselves as vital as utilities: becoming the portal to the world's information, or the new town square. There seemed to be bold opportunities for them to conquer finance, transport and media.

It is impossible to miss that things have changed. While these companies may still be growing rapidly, and remain, on balance, popular among the majority of people, excitement and awe has been replaced by allegations of monopoly power, Facebook poisoning minds and YouTube aiding terrorism.

It is clear that Silicon Valley failed to spot this swell early enough, which allowed it to build. Zuckerberg's dismissal of fake news as a problem, and Google's defence that YouTube was merely a "platform" did not cut the mustard.

Now they have reversed course. Last week, after a year in which advertisers have fled YouTube, for fear of appearing in front of unsavoury or illegal videos, the site pressed the nuclear button. YouTube announced that it would no longer allow advertising on channels that fail to amass 4,000 hours of viewing in a year, a bar that cuts off thousands of smaller users. Higher-earning channels in the company's "preferred" programme, which lets them generate better advertising rates, will be manually reviewed, making a mockery of the company's claims that algorithms are the best way to police the site.

Facebook is doing its best to cut ties with the news industry that it once courted. It announced earlier this month that it would relegate publishers in the Facebook news feed in favour of friends and family.

Over the weekend Zuckerberg (right) unveiled a new policy of giving publishers "trust ratings" to determine their prominence. Paranoid about appearing to look like the arbiter of truth, it says trust rankings will be determined by surveying users. Leaving aside the clear problems with this approach - that the same partisan audiences that allowed fake news to spread will punish outlets they disagree with - Facebook's move demonstrates a broader trend. Faced with unprecedented criticism, threats of regulation and wider concern over their impact on society, the internet giants are retreating from their once lofty ambitions.

Zuckerberg once wanted Facebook to be the world's "personalised newspaper". YouTube was built on the idea that indie filmmakers could supplement their income with adverts. The steps they have taken this month mean neither can be true today. Facebook and Google are realising there are areas they do not want to dominate.

One internet company executive I spoke to said the investment his company was making in monitoring and removing offensive content meant inevitable cuts in other areas. The result, he said, would not only be fewer sales staff, but fewer of the innovative new features and projects his company had planned.

This is not to say that these companies will not continue to grow rapidly. The shift towards digital advertising, emerging markets coming online and their increasing expertise in targeting will take care of that. But perhaps their all-conquering attitudes are fading.

They know, for instance, that acquisitions will become more difficult as fears about their monopoly statuses mount. Facebook in particular has a long history of buying start-ups that pose a potential threat. Past deals such as the company's $19bn (€15bn) takeover of WhatsApp four years ago would be a much trickier affair these days. Google antitrust cases in Europe may curb its influence. Other grand projects, such as plans to offer free internet to the world, seem to have gone quiet recently. (© Daily Telegraph, London)

Telegraph.co.uk

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