Facebook’s new internet.org is evil

Why is Mark Zuckerberg so concerned about his ‘charity’ initiative that he had to re-jig it in the face of opposition, star in another breathless video about it, and start a misleading campaign about it among users in India? Bear with me, it’s an interesting story.

Facebook is in a bit of a jam, and opposition to this one pet project in India is probably pointing to the seams of a larger story worldwide. But it all starts with a simple pair of numbers.

A rocky road on Wall Street

Facebook has about the same number of users as Google: about 1.4 billion. That’s one out of five people on earth. And the social network made US$12.4 billion off them last year – that’s about US$ 8.65 per person on their service.

While Google made $66 billion off about the same number of people – almost $46 per head – a revenue efficiency more than 5 times that of Facebook. And that gap isn’t narrowing nearly fast enough.

Revenue growth to support Facebook’s stratospheric stock price at 60 times earnings is a big challenge, I’d imagine. Oh, and even at 5 times the revenue efficiency, Google’s Price-to-Earnings (P/E) ratio is less than half of Facebook’s – so the pressure on the Facebook stock price can only increase with time.

There’s only so much you can squeeze out of the first world – the current billion or so people – even though Facebook has cut virality, decreased organic reach and tried every which way of getting someone, anyone to pay more for visibility on its once-open social network. A more desperate measure was probably needed.

What they realized they needed to do – for their own future and that of their stock price – was to look beyond these 1.4 billion people to find new users. And, at the same time, to stop these new users from going over to their rivals in Mountain View, California.

These new users are in China, India and the rest of the developing world. China has locked Facebook out. India, with a billion people yet to get on the net is probably seen as the great white hope for the future of this stock.

Hey poor people, please don’t Google

Enter Internet.Org. A clever strategy was announced with fanfare last year under the guise of an apparent not-for-profit mission “to connect the unconnected on earth”. The world welcomed the new face of Mark Zuckerberg, twenty-something billionaire philanthropist.

The Facebook CEO visited India, had the obligatory photo-op with the Prime Minister, and it was only a few months later that one figured out what the effort was all about.

Looking under the hood has actually shown a different reality. First, there’s no NGO. This is just a division of Facebook. Second, it is absolutely for-profit in every way. There is no not-for-profit part of it whatsoever. Third, as you’ll figure out: this is really the “Facebook Poor People Acquisition Department”.

And fourth, it’s not just about pushing Facebook down the throats of the unwired – but it’s also about making sure they don’t get a taste of Google or any other big boy in the process.

So who’s outside the first 1.4 billion?

Because internet.org isn’t really about social service at all

It’s the Splinternet!

Where’s the public interest?

But the fight is far from over

No room for charity?