Lazy pundits are fond of equating the evils of Facebook Meta with the "don't be evil" ethos of Google Alphabet, with the sole reason being that both are in the advertising business, but this past week has laid bare the differences between the two, and NYMag.com's Pivot podcast lays out the differences very, very simply:
Kara Swisher: There are Big Tech winners and losers in this week’s earnings, and Alphabet is making it look as easy as ABC. [...] On Tuesday, Alphabet announced a 20-for-one stock split. But they weren’t popping corks all over the Valley. Shares of Meta, the company formerly known as Facebook, fell more than 20 percent, in part due to the impact of Apple’s privacy changes. [Emphasis added.] Also, issues around growth; also, the money they’ve been spending on the Metaverse.
Yes, I know that Zuckerberg blamed recent iOS changes which block apps from sharing data with each other, and the effect that those changes are having on the business of surveillance advertising, but Google Alphabet are also in the advertising business, and their business is booming. Surely something else has to be at work, right? Maybe one of these two companies is in the advertising business, while the other is just in the surveillance business full stop, with advertising as a sideline?
[Swisher:] And again, the spending on Meta is insane — they lost $10 billion on that division, the Reality Labs division [...] 2022 could bring challenges for both Alphabet and Meta [...] but the big thing was this $10 billion cost for the Metaverse investment. So what do you think about the situation?
Scott Galloway: This is the quarter that Google disarticulates from Facebook, much less Pinterest and Snap. Search is its own form of communications and advertising that continues to just grow. [...] Facebook, for the first time in 18 years, had a decline in daily active users. It’s never registered that.
Yes, it's definitely sounding to me like Google Alphabet is in an entirely different business than Facebook Meta... and Facebook Meta's bid to rebrand itself as a real-world Ready Player One product isn't going at all well.
Galloway: He’s doing exactly the right thing strategically. The problem is the tactics make no sense. The people in this universe are not impressed with the universe he envisions, and specifically the portal. [...] The Reality Labs group grew from $1 billion to $2 billion, but to spend $10 billion to get to $2 billion … If he pulls it off, it’ll be one of the most impressive feats in — not even corporate renewal — but vision around maintaining growth. I don’t think they’re going to. I think this thing is already a giant flaming bag of shit.
I think that last line illustrates just how quickly Facebook Meta has fallen from grace, here. As recently as a month ago, it was looking like Zuck had successfully flipped the script, changing his company's narrative from Frances Haugen's whistle-blowing and under-oath testimony to Facebook's plan to shove us all kicking and screaming into a Facebook Meta-dominated VR future.
Now, pundits are openly talking about Meta's VR initiative in the past tense, having noticed that nobody under the age of 25 would be caught dead using this thing, and describing the entire division of the company as a "giant flaming bag of shit." Although, to be fair, that same description would apply equally well to Facebook Meta as a whole.
So, no, Google Alphabet and Facebook Meta are not in the same business. They are not equivalent, or interchangeable. Google Alphabet provides services that people like, and which they use in increasing numbers, while Facebook Meta is a giant flaming bag of shit" which shed a record-sized chunk of their valuation in a matter of days, and whose leader has continued to refuse to change the ethical direction of the company, even as he bets the entire enterprise on a dystopian VR future which nobody wants.
These companies are not related, and they are demonstrably not the same. Clearly, changes to the business environment which chopped the legs out from under Facebook Meta have had no impact on Google Alphabet at all, except to increase the size of their business... at Facebook Meta's expense. There is no equivalence here. So can we please stop lazily equating them? Just... stop.
This has been one of two aspects of the Facebook Meta for the past few years which I've found really, really frustrating. The first was that Facebook Meta, regardless of how evil the actions, or how feculent their headlines, seemed to be immune to consequences: no matter how bad the news, their earnings, profits, and share price just kept going up. That's now changed; Facebook Meta has now shown themselves to be vulnerable to consequence in a way which is going to haunt them for a long time to come.
The other aspect, though, was this false equivalence angle, one which Facebook Meta has been perfectly happy to encourage. Because if Google Alphabet and Facebook Meta are impossible to distinguish from each other, if both of them are equally targets of antitrust actions, and draconian regulations, then Google Alphabet could be forced into the role of reluctant ally with Facebook Meta, in spite of the simple fact that they really have very little in common.
Well, no more; we now have a clear demonstration of just how different these two companies are. We can rein in the evils and excesses of Facebook Meta without having to deliberately kill Google Alphabet in the process. Reasonable rules which pose an existential threat to Facebook Meta, don't present any serious difficulty to Google Alphabet at all. So can we please do that now? Pretty please?