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There's been a debate raging throughout 2016 about Facebook's (NASDAQ: FB) role in the world. On one hand, the social network has become one of the largest content distribution platforms ever created. On the other hand, Facebook doesn't really create much of the content that gets shared on its platform. The curve ball is that Facebook's News Feed algorithms and content curation play a huge part in what people actually see. This raises an inevitable question: is Facebook a tech platform company, or a media company?
Mark Zuckerberg has historically fought back against the perception that Facebook is a media company. In August, Zuckerberg explicitly said, "No, we are a tech company, not a media company." This assertion was directly predicated on the fact that Facebook does not produce content, instead focusing on building and operating the platform itself while providing tools for publishers and content creators.
A couple months later in an interview with The Wall Street Journal, Chief Product Officer Chris Cox added:
Well, it seems that the young billionaire CEO is ready to accept that Facebook is a form of media company, even if it doesn't create content.
A sudden change of heart
Zuckerberg starts and ends every week with a 1-on-1 meeting with COO Sheryl Sandberg to discuss that week's happenings. The pair decided to livestream their last 1-on-1 of 2016, and during the conversation Zuckerberg made an implicit admission (emphasis added):
The executive's comments suggest that he is slowly coming around to the fact that Facebook is a sort of hybrid company that sits at the intersection between technology and media. Given the sudden change of heart, you can't help but wonder if the fake news controversy has shifted Zuckerberg's perception of his own company, given the possibility that Facebook influenced last month's election in some form or fashion.
Putting the "media" in "social media"
Interestingly, this is also a topic that Twitter (NYSE: TWTR) has grappled with. Likewise, ex-CEO Dick Costolo proclaimed in 2012 that "Twitter is not a media company." The rationale was the same: "We don't create our own content. We're a distributor of content and traffic."
Whether these companies acknowledge it openly, Facebook and Twitter have become powerful entities that directly affect what information people see. Facebook's active curation in particular gives it incredible power -- and responsibility -- while Twitter continues to experiment with limited curation.
The whole semantic debate is kind of silly when you remember that this entire sector is referred to as the social media sector.
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