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Opinion We all learned a painful lesson from Facebook. Now Facebook is learning it, too.

Mark Zuckerberg in 2020. (George Frey/Bloomberg News)

In 2015, some professors at Virginia’s Sweet Briar College faced an unusual problem. Through the college, they had purchased homes on campus. The land underneath them, however, was still owned by their employer. And now the college was closing, and presumably selling the campus to someone who might want to use that land for something else.

Happily, Sweet Briar was rescued at the last minute by its alumnae. But the financial cavalry don’t always ride to the rescue just in time, so the plight of the professors nonetheless stands as a vivid example of a wise business adage: “Never build your house on someone else’s land.”

For years, Facebook has been teaching that lesson to businesses that built their strategies around the platform. And now Facebook is itself getting schooled, which is why I bring this up.

Meta, Facebook’s parent company, just had a truly horrific earnings call. The platform lost roughly half a million users in the fourth quarter of 2021, the first time its user base has declined in the company’s history. As in any business that’s dependent on network effects, there is a real risk that the shrinkage will accelerate, as each departing user makes the network less valuable to those who remain.

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But Facebook’s problem on the revenue side is, if anything, bigger. Over the past decade, Facebook has had an enormous competitive advantage in the ad market, because of its huge reach — almost 2 billion users a day! — and its ability to precisely target advertising to those users. Alas, recent changes to Apple’s IOS have made it a lot more difficult for companies like Facebook to track the activities of their mobile users.

Facebook, and Facebook analysts, have known this was coming for a while. But on Wednesday, Facebook quantified the damage: an expected $10 billion in 2022.

That’s a lot of money, even for Facebook — 8.5 percent of its 2021 revenue and fully a quarter of last year’s profits. Unsurprisingly, Meta shares plunged on the news. The company’s stock has lost a quarter of its value since Wednesday.

What Facebook is experiencing is a feeling we in the media knew all too well during the platform’s rise. Those users? They were spending time reading about their friend’s baby instead of reading news content written by professionals. And those digital ads Facebook was selling? They were gobbling up market share that used to belong to us news outlets. Without ads, a lot of publications went into precipitous decline.

No hard feelings, of course; all’s fair in love and free-market competition. However, the media was understandably eager to get our hands on some of that sweet, sweet traffic. We scrambled to build Facebook pages to woo readers, and when Facebook started limiting the reach of free pages, we supplemented our traffic by buying ads. We optimized our content for sharing and massaged our headlines to make them compulsively clickable. When Facebook went mobile-first, we mobilized, and when the company informed us that streaming content was the future, we duly pivoted to video.

Whole outlets were built around the clickbait Facebook seemed to want … and then died when Facebook, having encouraged all this activity, abruptly changed the algorithms to favor something else. The outlets that survived tended to be the ones that had largely given up trying to appease this jealous god and instead turned to alternative business models, such as selling subscriptions to a comparatively select few.

Through all the complaints of journalists and other business owners, Facebook blandly explained these changes as doing what was best for the users. But I wonder how that sounds down at Meta headquarters now that Apple has essentially done the same thing to Facebook?

In 2012, Mark Zuckerberg decided to take the company all in on a mobile-first strategy. This was disruptive, at first, but in time, he would be seen as a visionary prophet leading his company to the promised land.

The problem is, that land wasn’t owned by him. Zuckerberg had shifted his company away from the open platform of the browser and onto a closed system where Apple set the terms. For a long time, that was a very good deal for Facebook — but when Apple decided to alter the deal, Facebook didn’t really have much recourse.

There’s a lesson in that, even if you aren’t planning to launch a media site, or a social media platform. Our ferocious arguments about who should be kicked off Spotify, or Twitter, are fundamentally about the same problem: So much of our public life takes place on a handful of technology platforms, where what we see and whom we reach is determined by policies set by some faceless programmer in Silicon Valley. We are all of us tenants of the digital manor — even, it turns out, some of the lords.

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