And that, it seemed, was what the stock market cared about; as long as people kept using the services, they could continue to be monetised. Everything else was secondary.
But last Friday seems to have changed that. Facebook's sudden stock collapse of $120bn dollars? That’s unprecedented, and all caused by a slower-than-anticipated rate of growth. Twitter’s $6 bn drop? It posted its first-ever decline in user numbers following a purge of upwards of seventy million fraudulent accounts.
While it’s been a long time coming, in both cases it’s the direct end result of trying to have it both ways: serving shareholders and users alike. You can’t walk that tightrope forever.
It’s to be expected that a publicly traded company will prioritise creating value for shareholders – and bots, Russian spies, and manipulative ad campaigns on its platform all drive those hot shareholder dollars.
Facebook and Twitter taking pains to satisfy their users by, say, purging millions of bot accounts, was met with fierce resistance by Wall Street, which puts both companies in a bind: how do we deliver the ROI our shareholders expect while keeping the service worth using? It’s the tightest of Gordian knots.
But at the end of the day, they must respond to the problems they’re facing, even though it’s painfully clear that there is very little distance between the rock of investor confidence and the hard place of user satisfaction in which to navigate.
And the first priority of a company like Facebook has to be its user base; for as much as shareholders revolted, their dividends depend, ultimately, on people being willing to use the websites they’ve invested in. Unless that bridge is crossed, the rest of this is entirely academic.
That means regaining user confidence has to be the goal. From a communications standpoint, both Facebook and Twitter need to have the confidence to continue on their current route, and that has to be communicated to a skeptical user base.
These social media giants need to work to shift the conversation away from the financial hit they took last week and keep it on their ongoing commitment to the user experience – perhaps by listing initiatives they are currently working on, and opening them up to user comment.
In Twitter’s case, users need to be confident that the platform’s weaknesses (and the very things that make it attractive to abuse, particularly a lack of strong moderation) are being addressed, reopening it up to new users.
Facebook must reify their commitment to clamping down on misinformation and protecting user data. And their users need to be made acutely aware of that commitment.
Unless social media retains value to its users, it will lose value to its investors. Users need to know they matter. Right now, they do not. That’s the problem.
Eric Yaverbaum is CEO of Ericho Communications