Academic Sees Facebook Chasing Amazon
September 17, 2018
I assume the one trillion dollar Amazon poobah and the world’s richest hombre will not friend Facebook. The assumption is that the information in “How Facebook AI May Help to Change the Way We Shop Online in the Future” is accurate. The author is an accounting instructor at Villanova University. We do not have that type of expert in Harrod’s Creek. We do have some fast money guys from the health care outfits down the road, however.
The main point of the write up is that Facebook has some smart software which will change the way people shop. Maybe not in Harrod’s Creek, but certainly in a big city where the economic action is. (Keep in mind that insurance fraud is a core competency of some in the Commonwealth of Kentucky.)
I learned that:
The most powerful algorithm is called FBLearner Flow: Facebook could use its massive data on user preferences to anticipate the products that consumers want before consumers even realize it, and could work with retailers on predictive shipping.
Facebook also has DeepText and DeepFace. The trio of smart software adds up to a potential threat to Amazon.
The dismal performance of some facial recognition and image analysis systems is not a problem for the Facebook wizards. I learned:
DeepFace is used to identify people in photos and suggest that users tag people they know. In reality, DeepFace can recognize any face in any photograph on its own. This facial recognition algorithm is actually 97 percent accurate, incredibly even higher than humans who fall a close second at 96 percent accuracy, and the FBI at 85 percent.
The write up suggests that Facebook’s technology could, maybe, possibly could edge toward mind control.
Whatever.
My thought is that Facebook can snag more ad revenue. I think that Facebook ad gains might come at the expense of the Google. Google, unlike Amazon, seems to be drifting with Loon balloons, employee push back, and electric scooter investments. Amazon’s ads are just fly wheeling up and trying to build Mr. Bezos’ much beloved momentum.
Our research suggests that Amazon is implementing a game plan that once was associated with the pre 2006 Google; that is, a number of large scale plays for core business expansions. These range from policeware to back office financial services to replacing existing retail infrastructure with the Amazon equivalent of old school retail.
Ads, therefore, will be a billion dollar plus business at Amazon. Are those product listings ads or objective product summaries. That’s a question to ponder.
But ads may not become much more than just another Amazon revenue stream.
Facebook has to find revenue. Amazon, thanks to the cleverness of the happy Amazonians, is wallowing in revenue streams. Some employees may be unhappy, but most customers are thrilled for Amazon’s gentle approach to vendor lock in.
Net net: Facebook will do ads. Facebook will do smart software. Facebook will also have to figure out how to dodge the bullets regulators are now stuffing into regulatory weapons to tackle with “we’re sorry, we’ll do better” approach to business.
Stephen E Arnold, September 15, 2018
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