The tech giant’s carefree years of unregulated, untaxed growth are coming to an end.
Facebook is projected to boost sales by 46 percent and double net income, but make no mistake: It had a terrible year. Despite its financial performance, the social media giant is facing a reckoning in 2018 as regulators close in on several fronts.
The main issue cuts to the core of the company itself: Rather than “building global community,” as founder Mark Zuckerberg sees Facebook’s mission, it is “ripping apart the social fabric.”
Those are the words of Chamath Palihapitiya, the company’s former vice president of user growth. He doesn’t allow his kids to use Facebook because he doesn’t want them to become slaves to “short-term, dopamine-driven feedback loops.”
Palihapitya’s criticism echoes that of Facebook’s first president, Sean Parker: “It literally changes your relationship with society, with each other … God only knows what it’s doing to our children’s brains.”
.. Facebook, like Google, books almost all its non-U.S. revenue in Ireland with its low corporate tax rate — and pays most of it to a tax haven for the use of intellectual property rights. The practice resulted in a 10.1 percent effective tax rate for Facebook in the third quarter of 2017.
.. On Tuesday, Facebook announced that it will start booking revenue from large ad sales in the countries they occur, not Ireland.
Sean Parker unloads on Facebook “exploiting” human psychology
- “The thought process that went into building these applications, Facebook being the first of them, … was all about: ‘How do we consume as much of your time and conscious attention as possible?‘”
- “And that means that we need to sort of give you a little dopamine hit every once in a while, because someone liked or commented on a photo or a post or whatever. And that’s going to get you to contribute more content, and that’s going to get you … more likes and comments.”
- “It’s a social-validation feedback loop … exactly the kind of thing that a hacker like myself would come up with, because you’re exploiting a vulnerability in human psychology.”
- “The inventors, creators — it’s me, it’s Mark [Zuckerberg], it’s Kevin Systrom on Instagram, it’s all of these people — understood this consciously. And we did it anyway.”
“Because I’m a billionaire, I’m going to have access to better health care so … I’m going to be like 160 and I’m going to be part of this, like, class of immortal overlords. [Laughter] Because, you know the [Warren Buffett] expression about compound interest. … [G]ive us billionaires an extra hundred years and you’ll know what … wealth disparity looks like.”