The problem with Facebook
This chart says it all. A new study discovers that the vast majority of Facebook apps are an utter waste of time. But oh yeah — Facebook is worth $9 billion, or $15 billion. And Slide is worth half a billion because it makes that super important FunWall application.
Context & Ripple Effects
This 2008 post from The Secret Diary of Steve Jobs lands mid-way through the first great Facebook valuation argument. Months earlier, coverage had asked what Facebook was actually worth and then amplified a study calling it a $5 billion waste of time — the same research this post leans on to mock Slide's half-billion-dollar valuation for FunWall. By late 2007 the debate had swung between $5B and $100B, and it kept going: skeptics were still disputing a $33B figure in 2010.
First-order effects
- The study directly undercuts the platform-economy pitch behind Facebook's $9–15B valuation: if most apps are junk, the developer ecosystem is inflating the number rather than justifying it.
- Top app makers like Slide face an immediate credibility problem — their valuations rest on engagement metrics the new data suggests are largely empty time-wasting.
Second-order effects
- Developers are pushed into a land-grab dynamic where scale beats quality — RockYou! overtaking Slide in app installs shows the winner-take-most race that follows when distribution, not utility, is the currency.
- Advertisers and future investors get a reason to discount raw engagement numbers, forcing Facebook to defend its valuation on grounds other than app-ecosystem activity.
Third-order effects
- If the pattern holds, social-platform valuations decouple from measurable user value and become narrative-driven — a recurring cycle of hype, skeptical studies, and contested numbers that repeats across every subsequent Facebook valuation milestone.
- The episode foreshadows a structural tension: platforms monetizing attention regardless of whether that attention produces anything useful, which eventually invites both advertiser skepticism and regulatory scrutiny.
The trend: Social network valuations repeatedly outrun evidence of real utility, making each new Facebook price tag another round in a long-running argument over whether attention itself is worth billions.