From note to Loup Ventures subscribers posted Friday:
People are upset that FB abused their trust, although it doesn’t seem that users are upset about social media in aggregate… Apple and Amazon are relative safe havens.
- We expect over the next year investors will look favorably on Apple given the company’s privacy-first ethos in an age where privacy is becoming a more prevalent topic.
- Amazon will also likely benefit from the Facebook blowback given Amazon relies less on data to run its business than ad-focused companies.
- The biggest risk to Facebook is attrition and, to a lesser, extent regulation.
Apple’s privacy ethos. Tim Cook has made privacy a religion at Apple. It impacts everything from secrecy around new products to Apple Pay‘s anonymous transaction framework. In fact, Apple has a section on its website that outlines all of the ways Apple protects user privacy across all of the ways one uses their devices…
Amazon is service-first. Amazon’s focus is on delighting the customer through the services they provide. While Amazon does sell targeted ad space on their website, the “Other” revenue segment, which mostly constitutes advertising revenue, was less than 3% of total revenue in the Dec-17 quarter ($1.7B out of $60.5B). Advertising has never been a focus of the company, and it’s inconceivable they would abandon their current core businesses to pivot to an ad-first model that leaves them exposed to the risks we’ve highlighted in this note.
My take: I’m skeptical about this talk of positive blowback for Apple and Amazon. I suspect a lot of the anger at Facebook is a proxy for anger about the results of the 2016 election.