Who Owns and Controls Social Media? They Do. That’s Why Steemit Matters.
By Richard Kaplan, @steemship
Facebook, Twitter, and Reddit are controlled by Chase, Goldman Sachs, Morgan Stanley, mega-corporations, rich individuals, and governments like the United States and Saudi Arabia. Who do you think controls content and sets their agendas?
Facebook Users Have Become Dollar Signs
Wall Street values Facebook at more than $350 billion. Facebook has great technology, it has built a successful business, and it has established itself as the face of social media. But most of Facebook’s valuation comes from its users: one billion of them around the world.
Why are Facebook’s users worth so much? A company with access to one billion people is a huge market for advertisers. Companies want to reach Facebook’s users to sell them products and services.
When big companies come calling, Facebook and other social media sites are only too happy to sell them data they have gathered on their own users. They are only too happy to sell advertising to these companies. Advertising is content that someone has paid to put in front of you. And Facebook is happy to let big corporations dictate the content that Facebook’s users see first.
Why would Facebook and other social media sites sell out their users this way? Even if the Facebooks of the world began as tiny, innocent startups with good intentions, they now are owned by mega-corporations and rich individuals. These owners and shareholders demand constant growth and increased profits; truth and privacy are less important to them.
Control of Content and Privacy
They see people as money. Users are a commodity to be squeezed and mined for information, so that these same companies or their clients can turn around and target the site’s users with the right kind of advertising. Then they can sell lots of products and services, and make more money off the site’s users. When you post there, all you are doing is fueling their vicious cycle, and you certainly do not get paid for posting or voting like you do on Steemit.
As @cryptoctopus wrote in one of his Steemit posts:
“Facebook allows people to share their life, opinions and beliefs to people they know. But what if Facebook had a bias and kept on silencing opinions it doesn't like? Just think about the collusion with Germany to censor conversations regarding mass-immigration or the Gizmodo article about how a former Facebook worker came out and said that they routinely suppressed conservative news and finally the news about how the social network banned a Canadian libertarian” for criticizing Facebook’s practices.
(*Note: this quote was used with @cryptoctopus’ permission. A link to his post can be found at the end of this article)
Who Owns Facebook and Twitter? Mega-Banks and Government Control
Both Facebook and Twitter are owned by large shareholders, including J.P. Morgan Chase, Goldman Sachs, BlackRock, Morgan Stanley, Clearbridge, Vanguard, and T. Rowe Price, each of whom own around one percent or more of one of these companies. Morgan Stanley, which owns 5% of Twitter, has a huge amount of potential control over that company’s content.
When your largest shareholders are mega-banks and institutional funds, they either control or have the power to control the agenda and content. But they’re not the only ones. Goldman Sachs, Morgan Stanley, and Chase are all mega-banks on the so-called “too big to fail” list of the United States government and other powerful governments worldwide. They are considered “systematically important” banks and the world’s major governments permanently stand ready to bail them out if needed.
In fact, the connection between government and mega-banks is far closer than this. While the U.S. Federal Reserve is supposedly independent, it handles the vast majority of its transactions through its 12 regional Federal Reserve Banks. And guess what? These are not independent at all.
The CEO of J.P. Morgan Chase sits on the board of the New York Federal Reserve, the largest and most important of the regional central banks. The regional feds actually hand out STOCK to their member banks. Guess who these are? The same big banks who loan money to the government, which loans it back to the banks, who loan it out to people with the government guaranteeing the loans, but the government has to go back to the banks for more money to pay interest because it can’t afford to pay off its own loans, and they tack on a few more zeroes every time the money moves.
Here is a link to the U.S. Debt Clock, which shows you in real time just how much money is being spent. The situation in most other countries is not much different in terms of governments owing money that no one has. Whether it’s real or fictional, we don’t really know anymore: http://www.usdebtclock.org
Want Some Other Examples of Government Control? How About the Saudis?
In some other countries, the links between the government and private sector are even more of a sham. Saudi Arabia is 100% controlled by the Saudi royal family. The Saudi government owns Audi Aramco, its state oil company, which is the most valuable company in the world (valued between one and ten trillion dollars). Every senior member of the Saudi government is either a member of the royal family or extremely close to it. The royal family is descended from the founder of Saudi Arabia, who had hundreds of children, including 45 sons. The richest member of the royal family currently is Prince Alwaleed Bin Talal Alsaud, whose net worth is estimated at $30 billion.
Did I mention that Prince Alwaleed owns 5% of Twitter? The Saudis have as much control over Twitter as Morgan Stanley with its 5% stake.
How about Reddit? Isn’t it Clean? No, Don’t Go There.
We didn’t even touch on Reddit yet. Shall we even go there? Reddit is owned by Conde Nast publications. Oh, Conde Naste, they’re clean, right? They print those luxury travel magazines you see in dentists’ offices. Nope, sorry, they’re not clean at all.
Advance Publications is the parent company of Conde Nast and of Reddit. One of the largest private companies in the United States, Advance Publications has annual revenues of about $8 billion. It operates hundreds of newspapers, magazines, news websites, TV stations, and other media outlets. It is principally owned by the Newhouse family, one of America’s richest families. Forbes ranks them as the 11th richest family in the United States with an estimated net worth of $18 billion.
There’s nothing wrong with that sort of money, but how did the family accumulate so much wealth and control over the media? In her book, “Citizen Newhouse: Portrait of a Media Merchant,” Carol Felsenthal explains how the Newhouse family patriarch, Sam Newhouse, acquired his media empire. It is a tale of stifling content, jacking up advertising rates, and creating news monopolies in one market after another:
“The best tonic for Sam's bottom line was to acquire a city's first newspaper, then get his hands on its second, thereby allowing him to set advertising rates as high as he pleased. He would promise to keep both papers in business and in competition. But he would eventually move in for the kill by merging the two, which generally meant closing the afternoon paper and keeping the morning. He thus created a monopoly money machine of the sort billionaire investor Warren Buffett likened to an ‘unregulated toll-booth.’”
Yes, that’s the family and company that owns Reddit. All of it. Do you think they have some control over Reddit’s agenda and content? I don’t know how the company operates, so let’s just call it potential control. I do know that if I were Reddit’s CEO, I’d pick up the phone every time my ultimate bosses called. And as long as the paycheck of every single person in that building depended on it, I’d damn well do what those bosses told me to do. I might even hire some fascist moderators for my subgroups (okay, maybe I shouldn’t go that far right now).
We could go into Instagram, LinkedIn, YouTube, and a dozen others, but I’ll save that article for another day.
Let’s Recap
Powerful governments control the mega-banks or the mega-banks control the governments (take your pick). The banks and large institutional investors hold enormous control over Facebook and Twitter. A monopolistic and controlling company owns Reddit.
Is it any wonder, then, that social media sites are being asked to bury their criticism of certain governments and companies? Is it any wonder that they collect data on their users, monitor posts, and value money above privacy? Is it any wonder that they control, and allow their advertisers to prioritize, which content people see?
Steemit is controlled ONLY by its community members. There is no agenda besides freedom. Most certainly, there is no large corporation or government calling the shots.
“We still believe in the free and open marketplace of ideas,” as @cryptoctopus wrote. The Steemit community believes that when differing opinions are allowed to compete against one another, everybody learns more about those issues and perspectives. Everybody has a chance to discuss and debate ideas. May the best idea win, and may everyone treat each other with respect and understanding.
The money? Steemit does not have any mega-banks or billionaires to please. Not only does the Steemit community control the content; it also owns the whole project. In essence, anyone posting or upvoting good content gets a chance to share in Steemit’s ongoing growth and profits.
-Peace, Richard, @steemship
Related Post (source of quotes): https://steemit.com/steem/@cryptoctopus/confession-of-a-facebook-ad-man-and-where-i-am-moving-to-next
Other Sources (good toilet reading):
https://www.federalreserve.gov/faqs/about_14986.htm
http://web.archive.org/web/20080614141842/http://www.fsforum.org/about/who_we_are.html
http://www.globalresearch.ca/who-owns-the-federal-reserve/10489
http://www.nytimes.com/books/first/f/felsenthal-newhouse.html
http://qz.com/519388/this-saudi-prince-now-owns-more-of-twitter-than-jack-dorsey-does/
http://www.forbes.com/profile/newhouse/?list=families
Epic rant like I like'em! +5%
EDIT: It seems that I cannot type fast enough.
As soon as I submitted, I saw this on CNN.
Microsoft Buys LinkedIn: http://money.cnn.com/2016/06/13/technology/microsoft-linkedin/index.html
hah, when i was reading, i got the same message in my inbox:')
I get the sentiment but I think one needs to be careful when making such definite statements. It's obvious that Steem's shares can be purchased by anyone, including the entities you listed above, and the only reason this has not happened yet is because the whole blockchain industry is so young and we are tiny.
So for me it's not the case who the shareholders are but rather what kind of power and influence they can have. In this respect Steem can be quite resilient. Actually, it could be quite interesting if Goldman Sachs had one percent of Steem shares and at the same time could not have any control over Steem's content.
Everything is for sale, including a stake in Steemit. The difference here is that every user has the power to earn more STEEM Power, which is analogous to being a shareholder, both in terms of potential payment and potential influence. Blog posting and voting is rewarded here, 50% of it with STEEM Power and the rest may be converted to such a stake if one so chooses. Over time, that power can grow proportionately. Anyone can be a factor here.
With Facebook, Twitter, and Reddit, the only ticket to ownership and control is money. That provides the potential of enormous control. I am not saying such abuse of control is par for the course on a daily basis, but we have seen several prominent examples of that control being used/abused. It is only fair to speculate that the ownership has some influence. After all, the CEO and day-to-day management of each of these social media sites hold their jobs only as long as their efforts reward their real bosses, the shareholders.
Excellent article, I talk about similar ideas in my ethics research paper: https://steemit.com/paper/@nphacker/the-ethicality-of-the-use-of-data-mining-techniques-by-large-technology-companies
Awesome paper. Seems like a lot of great minds in the crypto space realize these problems!
Excellent article with source material, links, and funny little animations. I approve, thanks for the read.
how do you link pictures in your steem post. do you just post the pic url?
Beneath the post editor you can see the link "Styling with Markdown is supported." Click on it and it will bring you to a quick little cheat sheet where you can see how to style your post. Here's a more comprehensive tutorial.
No you have to use a Markdown format:
I endorse this terminology:')
Good read! It really underscores the true value of Steemit!