More of why Facebook is finished

Since CNN doesn't have a blogger button to share, I am cutting and pasting this article from CNN.   Here is the URL:  http://us.cnn.com/2013/06/21/tech/social-media/facebook-contact-bug/index.html?hpt=hp_t2

Facebook bug exposes some contact information

By Heather Kelly, CNN updated 10:46 AM EDT, Sat June 22, 2013 | Filed under: Social Media

(CNN) -- A newly discovered Facebook bug may have inadvertently compromised the contact information of 6 million users, the company says.

The bug, which has since been repaired, was part of the Download Your Information tool, which lets Facebook users export all the data from profiles, such as posts to their timeline and conversations with friends. People using the tool may have downloaded inadvertently the contact information for people they were somehow connected to.

Some people upload their contact lists or address books to Facebook, which the company then uses to suggest new friends they can connect with who are already using the service.

Though the number of people impacted is sizable, the actual spread of their contact information appears to be limited. The phone numbers and e-mail addresses were not exposed to developers or posted publicly. It is only shown to people they had at least a tentative connection with, and who may have already had their contact information. Even in that pool, it was only exposed to people who had used the data-exporting tool.

"For almost all of the email addresses or telephone numbers impacted, each individual email address or telephone number was only included in a download once or twice. This means, in almost all cases, an email address or telephone number was only exposed to one person," Facebook's security team said in a post.

The company says it has no evidence that the bug was "exploited maliciously" and that there have been no complaints so far.

The social media company announced the bug on Friday afternoon. The issue was discovered by a third-party security researcher who submitted it through Facebook's White Hat program.

Facebook's White Hat program is set up so that people such as security researchers can report any vulnerabilities they find on the social network and get a reward for $500 and up in return. These types of programs are common at Internet companies.

"Your trust is the most important asset we have, and we are committed to improving our safety procedures and keeping your information safe and secure," read the post.

People who were affected by the bug will receive an e-mail from Facebook.

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Guess What Tech Stock is Gonna Tank Today?

It's 8:47 AM. About 13 minutes before the market opens. Guess what famous stock is going to tank again today? (says he gleefully -- he who predicted that Facebook is dead man walking).

Update 2:12 PM EDT. It's at 28.36 down $3.06 and that 9.62%. Now if it loses half of what's its at now, it might be getting near the range of a buy.

Update 4:07 PM Market Close. Facebook closed at 28.75 3.16 9.9% down almost 10%

This downward slide isn't over. The market will ultimately correct.

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I oughta be a stock analyst instead of a geek

Instead of rising with a bullet, Facebook stock is deflating like a bullet wound in a balloon. I ought to be a stock analyst instead of a geek. I can pick them better than widely reported analyst Arvind Bhatia. His total paeans of praise for Facebook is either due to lack of objectivity (through payment or self-delusion) or simply that he made a huge mistake, and really isn't that smart when it comes to the stock market. It reminds me of the time where a kindergarten class outperformed a bunch of Wall Street analysts by picking stocks that they knew and loved (McDonalds, ToysRUs etc).

This Facebook IPO price was so wrong on so many levels, and yet greed made the underwriters do it anyway. It is now 18 percent below IPO price. The hedgefunds who bought the stock are not going to have a good year. Warren Buffet was vindicated.

Now two days on the market doesn't mean much in the long term, but it means a lot to the optics of the deal. The market is waking up after a 2:00 am orgy and finding itself in bed with a ugly woman, a male midget and Doberman (with all due respect to plainer women, smaller men and angrier dogs).

The correction is taking place. My bold prediction is that it WILL reach the $14 per share mark where it belongs. Actually it belongs lower than that, but lets see if they are made of sterner stuff.

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Why Facebook Will Not Overtake Google

Last night I watched a video that interviewed a stock market analyst called Arvind Bhatia associated with the firm Stern Agee. He was quite bullish on Facebook, saying that it will overtake Google etc etc in advertising revenues once it monetizes the mobile market. It was quite obvious that he is enamored with Facebook and Mark Zuckerberg.

It reminded me of the tech boom that collapsed in 2001-2002. People were raving about waterfont property on the Internet, only to discover that it didn't exist. Facebook is now undergoing an IPO frenzy, and the opening price suggests that they are capitalized at 100 times their trailing revenues. For any other stock, this valuation would be sheer fantasy. Surely that if something is too good to be true, it is.

With the unbridled optimism of Wall Street, they are charging ahead, forgetting that one piece of exploding Muslim-fanatic underwear on an airplane can turn unbridled Wall Street optimism into deep despair.

As I was listening to analyst Arvind Bhatia, I was struck by a couple of things. He was demonstrating a zeal for Facebook that seem to transcend the rational practicality of most stock pickers.

Let's look at some aspects of Facebook and its IPO. First of all, the smartest stock picker in the world, Warren Buffett is not participating. This tells you something.

Secondly, Facebook says that they have a billion users, yet all they can garner is $4 per user per year. Facebook has not yet figured out how to monetize its users, and specifically it has not figured out how to do so without violating their privacy. Google has.

Bhatia the analyst says that Facebook has a lot of personal information that can be used to direct advertising to. While this is true, a lot of that personal information is not that useful in getting monetized. For example Bhatia mentioned that Facebook knows what high school that I went to. After many years of graduating, our high school displays the entire spectrum of graduates who have go on to greatness, and others that have gone on to jail. There is no smooth curve of socio-economic demographics to glean out of that kind of information.

When doing a comparison of Facebook and Google, Google has the upper edge. First of all, they have an order of magnitude of intellectual capital compared to Facebook. Facebook has a bunch of php coding freaks brogrammers. Put plainly, Facebook isn't smart enough to take their info to the next level.

Google has the smartest guys on the planet developing algorithms. There is a huge difference between the two. It is the same reason why in spite of the fact that China makes all of our stuff, they will never overtake us in development and innovation. All of the intellectual capital resides in the free universities and companies in America that are unfettered by dogmatic rules when it comes to science and thinking. The profit motive is a very strong innovation driver, especially when it is coupled to a strong research base. Facebook doesn't have a strong research base like Google does.

There is another problem with marketing and Facebook. Many of the top bricks and mortar stores have closed their Facebook stores. Why ? Part of the reason is that the information on Facebook is too open. Facebook blasts out the fact that you play Bejewel or that you were looking at the adult diapers page on Facebook. I don't want all my Facebook friends to know that. I carefully screen the pics that I put up on Facebook to show that I haven't gained 20 pounds, yet if I am shopping at the "husky" page, my friends will know. Liking the Viagra page will tell my friends that there is trouble in sex department. Looking at the singles ads will let my wife's friends know that I am checking out the menu. I don't want my godson to know that I am turned on by lithe, exotic dark skinned beauties on the Victoria Secrets page.

Facebook crosses too many personal lines. And they don't know how to fence that. Whereas Google deals with pure algorithms, Bayesian inference and data mining. I am reminded of the Target customer that sent a teen some pregnancy coupons based on extensive data mining of the fact that young pregnant women buy some sort of skin cream coupled with a renewed interest in health and vitamins. They had detected the fact that she was pregnant before she told her parents. Google has this capability and Facebook, the way that it is configured, does not. And trying to change Facebook, will be like trying to put lipstick on a pig and taking it to market.

The biggest factor is that everyone is stating that Facebook has unmonetized potential. And they put a high valuation on that. My contention is that the valuation of the user base is way too high. There is a common misconception that every user base can be turned into a marketing base. That is simply not true. The older folks on Facebook just find it an easy way to keep up with people that normally they wouldn't make the effort to do so. But in no way, will they buy anything off Facebook. What the analysts fail to realize, is that many people want a social network just to be social and not to shop. The valuations of the user base are overly optimistic.

So while the emotions of Wall Street may inflate the price of Facebook, I am reminded of what goes up must come down. They don't have the strong basics that Google does of pure substantiveness in their model, and if they anger enough people, Facebook will overnight become another MySpace. Facebook is particularly vulnerable to someone coming along and making something better that doesn't violate my privacy the way Facebook does. You can't knock Google off that way without a billion dollars to do some research and develop some better technology. And when the Facebook collapse happens, we will all wonder why we never saw it coming.

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Invest in Facebook ~ Not on your life

Regular readers of this blog will know that I consider Facebook to be dead man walking. They will become like MySpace. Why? Because they are not making money the way they should. They are trying to monetize themselves and change the way they operate by selling private data. In the words of Jimmy Fallon~ Facebook is selling 330 million shares. Great now you can own a piece of the website that completely owns you.

Not only will they alienate their user base, but they have a couple of problems. First, many of their users are fake. The private data is not real. Facebook themselves will publicly admit that "at least 5%" of their users are fake. Using their figures, that means that 50 million Facebook accounts are fake. I'll bet that the real number is much higher than they are willing to admit.

Secondly, for a billion users, they are only making $3 or $4 dollars per user. That is not enough to sustain the business model long term. Secondly, it tells you that their paradigm is not suited to business. Several Fortune 500 companies have abandoned their Facebook storefronts.

The biggest reason that you shouldn't invest in Facebook, is that the smartest stock player in the world, Warren Buffett is giving Facebook stock a pass. His chief investment officer had strong words about not investing in Facebook. You can read the article by following this link:

http://money.cnn.com/2012/05/06/news/buffett-facebook/

So, that is why I am not investing in Facebook, and it further reinforces my belief that Facebook, like Microsoft, has had its day. The only way to go is down. Microsoft has already turned that corner.

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Microsoft - Facebook Partnership ????

I signed out of Facebook this morning (yes I am still on it, but not for long) and this popped up when I signed out.

When did Microsoft get into bed with Facebook and how much did they pay to do so? This has to be some serious cash for Facebook from Microsoft to do this. But Microsoft has the cash and they are desperate. Not only has the Internet Explorer browser lost it number one dominance, but their search engine Bing has failed to ignite as well.

I was already used to the numerous Microsoft ploys to sneak Bing into the metrics of search engine usage. For example, when you sign out of a Hotmail account, it re-directs to an MSN page. Over half of the links are faux-links with teaser titles that make you think that you are getting an interesting article, where in fact it turns out to be a link to a Bing search. To me, that is a real bait and switch tactic.

But this latest Bing on Facebook thing must be really good for the bottom line of Facebook. I can't even imagine what Microsoft would pay for that exposure, but it would have to be hefty. As for a prediction, I still don't think that it would make a dent in Google -- at least not among the tech cognoscenti.

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Classmates.com -- Another MySpace in the Making?

A few years ago, I signed up on Classmates.com. I did it out of pure curiosity to find out where my peers in high school ended up. I enrolled in the free registration and had my name posted on my school page and my year of graduation.

They had all sorts of features such as someone coming by and signing your guestbook, or sending you a message. Of course to read who signed your guestbook, or to open your messages, you had to pay a monthly premium. I never did pay the monthly premium. I was never that curious.

Then along came Facebook. It was easy to find your classmates with a recent picture, and if their privacy settings were low, you could find out who they were married to, who they were working for, and in general determine that they didn't surpass you in the game of Life. However in my case, my classmates are respected members of the Mayo Clinic, top universities, have played professional sports and made my resume look like I was an under-achieving failure.

Linked-In is even better at connecting with people from the past. I've noticed that Linked-In suggests possible connections of people that I have never emailed, but have Googled. How does that happen?

Anyway, Linked-In has enabled me to connect with a family member who didn't want to be found. It is superb at finding out degrees of separation between you and anybody.

So where does that leave Classmates.com. I regularly get spam from them, begging me to pay to read to see who signed my guestbook four years ago. The spam sounds more and more desperate.

In addition, Classmates.com is now trying to suck me into a "Memory Lane" thing where it matches movies, music and trivia to the year that I graduated. That isn't going to induce me. I don't need reminders of how old I am, and thanks to iTunes and others, I already have all of the music from that era that I would ever want.

So I am thinking that Classmates.com is another MySpace in the making. It can't be sustainable when Facebook and Linked-In do the job of connecting people much more efficiently with a bigger information load. If there is such a think as stock in Classmates.com, now is the time to sell short, if you haven't already!

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Facebook vs Google+ or Google Circles --Creating the Ultimate Social Network

In a previous blog post, I predicted the eventual demise of Facebook. This article further explains why I think that.

To start with, Facebook introduced a whole plethora of new paradigms in social media. They were innovative. They created new ways of interacting with people. They revolutionized social media.

For example, we can maintain relationships in a lazy fashion by pressing the "Like" button. In that fashion we can "connect" with someone (in some sort of fashion) in less than a second.

We can have more "friends" than in real life. Indeed, Facebook (and MySpace) have challenged the definition of friend. And they have redefined how we interact with them.

But in this ever-changing world, paradigms change over night. A new paradigm is introduced, it goes viral, reaches a tipping point, creates a critical mass and suddenly it makes unwittingly billionaires out of its inventors. Everyone thinks that this is the end of the story. It's not. What was created, eventually dies.

The entire life cycle ends in death. MySpace suffered old age and near-death dropping in value to a tenth of what it sold for. Nothing is forever, and cycles are a lot quicker in a highly inter-connected world.

So, did Google create a better mousetrap with Google+ or Google Circles? I have not seen Google+ or Google Circles, but it seems that it is more closely in line with non-virtual real life social networks.

With Facebook, a friend has full privileges to my online life, unless I undertake an onerous task of specifically blocking specific people for instances of specific things. That's not how real life operates.

The knowledge that I disseminate about myself in real life depends on the audience. For example when I travel on business through my home town, several hours away, I may stop in and see one of my siblings, but I do not want them to tell my parents who live in the same city that I am there on that occasion. My mother would insist of making a meal, and keeping me there for hours when I am time constrained. I prefer leisurely planned visits so that I can take my time and enjoy catching up with my parents. So, for that particular day, I want a certain sibling to see my status but not my parents. At other times, I want my parents to know that I am coming. Connections and statuses are dynamic depending on circumstance and Facebook cannot allow for that easily.

Another example is that a young niece of mine wants me to see some prom pics, and pic of her new boyfriend, but doesn't want me to see comments about him that her friends make.

All of the content has to have the ability to be controlled irrespective of who belongs to what circle. Generic circles with generic privacy settings, of family, friends, co-workers, etc do not work all of the time.

Human nature is such that we are all somewhat egotistical and narcissistic. So even though I know that I am in the circle of co-worker with one of my fellow cubicle drones, I tend to think that I am his/her most important friend, and that person does absolutely nothing to dispel that notion.

The closer that any new social network mimics this intrinsic human behavior, the more successful that it will be, and it will supplant the older paradigms.

So die Facebook die. You have been good to us, but unless you fundamentally change, you are on the way to the boneyard. Is Google+ the new way to go? Maybe, however as a humanist I would like to believe that a bunch of engineers cannot come up with the next best thing since sliced Facebook. It would have to be some unkempt guys spooging code for the fun of it, and not some dark force of dominance who's motto is "Do No Evil".

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Facebook -- Dead Man Walking

A couple of years ago, it would have been heresy to say that MySpace was irrelevant.

It is now a ghost of what it was, and it IS irrelevant. Facebook has moved in and trounced it. However, I will posit that Facebook is dead man walking and they don't know it.

Facebook is losing members. Facebook is losing relevance. Facebook will go the way of MySpace. I can hear the gasps now.

In the technology sphere, what goes up, must come down. Remember how Lotus Notes once dominated the market space. Remember DEC -- Digital Equipment. Let me take you further back. Lowell Massachusetts was the home on Wang -- a company that went from zero to the stratosphere with dedicated word processors. They went the way of the dodo bird.

Those crazy valuations of Facebook that one is hearing about should be a sign to investors. Get out now, and sell short. You won't regret it.

What will come next? I don't know. But what history teaches us, that fad cycles are getting shorter and shorter, and a plethora of new offerings are coming to the market daily. One of them will reach the tipping point, go viral, and make a new billionaire, leaving the oldies (of less than ten years) in the dust.

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