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caplin point laboratories limited (524742) ✌️【Market Analyst】✌️ Free stock market analysis and data updates to help you select the best investment portfolio. Achieve steady growth and avoid losses with expert predictions and real-time market insights. A version of this story appeared in 【 - Free Stock Market Practical Discussion Forums 】 Business’ Nightcap newsletter. To get it in your inbox, sign up for freehere.

Facebook is full ofAI slop. X is full of “free thinkers” peddlingconspiracies. Google’s search results are telling us toeat rocks. More and more, it feels like the internet has gone bad.

caplin point laboratories limited (524742) ✌️【Market Analyst】✌️ Real-time global stock trend and futures data to help you plan investment strategies for long-term returns. The term, coined in 2022 by theauthor, journalist and activist Cory Doctorow, refers broadly to the deterioration of services (especially online) as a result of giant companies extracting maximum profits from their customers. In a 2023 essay forWired, Doctorow laid out the basic arc of enshittification, or the process by which platforms die.

“First, they are good to their users; then they abuse their users to make things better for their business customers; finally, they abuse those business customers to claw back all the value for themselves. Then, they die.”

In other words: Products are good when they first hit the market, because companies need to lock in as many consumers as they can to achieve the huge scale they desire. Once everyone’s using the product, the company refocuses on creating value for business partners, padding its profit margins and letting the product corrode. Eventually, the company maxes out what it can extract from its business partners, too, and the whole thing fades into obsolescence.

Once you wrap your head around the idea, you start to see enshittification all around — not only online, but across the economy, in services that have beenpicked over by private equity(vet clinics,nursing homes,prisons, countlessotherindustries) or in the products peddled by highlyconcentrated industries. The Australian dictionary Macquarie even crowned it the2024 word of the year, noting its power to capture “what many of us feel is happening to the world and to so many aspects of our lives at the moment.”

On Tuesday, shortly after Meta’s CEO announced awidely criticized planto dispense with fact-checkers, I spoke with Doctorow about the future of social media and how “enshittification” can help us make sense of our collective online angst.

Cory Doctorow:I think of enshittification as a theory about what happens when you have power without consequence.

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Doctorow:There’s a law, the Digital Millennium Copyright Act, that makes it illegal to break digital rights management. So for example, if Audible (which is owned by Amazon) sells you one of my audiobooks, they require that it have digital rights management that locks it to Audible’s platform forever — you can’t unlock it, quit Audible and take your books with you.

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Doctorow:Meta is a great example because they go through this pretty neat set of stages… They had this very straightforward value prop, which was like, just tell us who matters to you, and we’ll show you everything they post. And their pitch to the general public was, Facebook is like MySpace, but we won’t spy on you.

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Doctorow:Facebook at a certain point goes to publishers and says, create a Facebook page, post short excerpts to it, don’t worry about how many people follow you — we’re going to recommend it to users. So we’re going to show users things that they never asked to see in order to take some value away from them and give it to publishers.

You see the same thing with advertisers. Facebook not only offers to use surveillance data to benefit advertisers in the form of targeting, but they also invest heavily in anti-ad-fraud and in services to advertisers. So if your ads are not performing, they’ll help you figure it out, but also, if someone’s ripping you off, they’ll help you get your money back.

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Doctorow:Right, once the advertisers were fully committed to a Facebook strategy, advertising got way more expensive and the amount of ad fraud you got was crazy. So the advertisers are getting screwed, the publishers are getting screwed, the end users are getting screwed.

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Doctorow:Zuckerberg is insulated from the consequences of making bad choices until he’s not, right? Until things reach a breaking point, and then he tends to panic. Tech calls these panics “pivots,” but they’re just the outcome of being the CEO of a company that posts anemic growth or even a contraction in its user base and sees (Wall Street) just go nuts on you.

First, it was the Metaverse… which is like a not-very-successful video game that they spent billions on. Zuck could do that because he controls the majority of the voting shares and because he had huge cash reserves.

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It could be a way to continue to post growth if users will tolerate it. But the equilibrium that Zuck has shot for, with Facebook and with Instagram, has been a service that is nearly so bad that people want to leave.

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caplin point laboratories limited (524742) ✌️【Market Analyst】✌️ Professional stock market analysis, real-time data, and expert recommendations for high-potential stocks. Take advantage of market opportunities and improve your capital growth with strategic investment plans. This is where Facebook is. They are trying to maintain this equilibrium where they extract enough that they keep their shareholders happy, but not so much that people leave. They’re now at the end of a long run of extremely bad choices. I’m not shorting Meta stock, but I think that they are on the path to becoming a kind of zombie — something like MySpace is today. You know, MySpace still exists. You can go to MySpace. It’s just AI-generated slop and and spam.

Doctorow:In terms of the future of enshittification, these platforms that have hollowed themselves out, where there’s just no value left in them except this kind of awful lock-in. It’s the old “we go broke a little, and then all at once.”

I do think there is reason to be hopeful. As a science fiction writer, I know that prediction is a mug’s game. But as an activist, I’m like, well, you take the weakest flank where you can make the biggest strategic advance, and you march on that flank. And there are a lot of weak flanks in global big tech.

I’d say the last one is the potential for an alliance between people who are angry about other kinds of monopolies, because it’s not just tech — people are really angry about grocery monopolies and oil monopolies, sea freight monopolies, eyeglass monopolies. One company, EssilorLuxottica, owns every eyewear brand you’ve ever heard of and every eyewear store you’ve ever shopped at, and they make more than 50% of the lenses, and they own EyeMed, the largest insurer in the world, and they’ve raised the price of glasses 1,000% in the last decade.

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