The new country of Facebook

Sitting in his home in San Francisco’s Nob Hill, arachnophobe Tim Suzman is watching a virtual spider creep across a virtual table. If he can keep calm, he’ll watch a larger spider and then a larger one, until eventually he can cope with a computerised spider crawling across his hand.

Wearing an Oculus virtual reality headset, Suzman can see the room – and the spiders – in 360 degrees. At first, he was as anxious around virtual spiders as real ones but after weeks of practising, he can now soothe himself even when a live medium-sized spider is busy building a web on his wall. “When I see a spider in real life now, rather than my first reaction being, ‘Ugh, that’s freaky,’ it’s, ‘OK, I’ve been in this situation before and it wasn’t so bad’ – even though my brain is thinking about what happened in virtual reality,” he says.

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One day, Suzman may be curing phobias on Facebook, which bought Oculus earlier this year for $2bn. It is the company’s biggest bet on the internet’s long-term future – and its own. But this will not be the Facebook we know. Instead, the vision is for an all-encompassing site where people conduct more and more of their daily activities.

Suzman quit his job two months ago to found a business called Fearless, which he hopes could eventually enable Facebookers using virtual reality to visit their therapists on the site. He imagines a day when stepping into a virtual world would be as common as picking up a smartphone and perhaps even more useful. “The most straightforward way would be to create a virtual room and the two people can be talking as if they are meeting in person,” he says. “A therapist in any country could offer the same service locally to anywhere in the world.”

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Virtual reality is just the most futuristic part of Facebook’s broader plan to transform itself into something much larger than a place to post photos of your food or watch videos of bunnies. Entrepreneurs such as Suzman are lured by its huge audience: Facebook is simply where the people are. The site is on course to become home to more inhabitants than any country in the world, its 1.3 billion-plus users taking it within a whisker of the population of China, the largest nation on the planet.

If Facebook were a country, it would be the second most populous in the world, just behind China

This milestone figure matters to the man who once opined that power in his generation was “moving from countries to companies”. In that statement, he implied that heading up a company such as Facebook could put him on a par with world leaders.

Mark Zuckerberg, Facebook founder and chief executive, was a billionaire in his twenties, but is devoting his thirties to building this new country of Facebook. “The best thing to do now, if you want to change the world, is to start a company. It’s the best model for getting things done and bringing your vision to the world,” Zuckerberg told Kate Losse, an early Facebook employee who became his speech writer and quoted him in her book The Boy Kings: A Journey Into the Heart of the Social Network.

Therapy on Facebook is only the start. The company is preparing the site so it can deliver services virtually that were once the province of the nation state: from healthcare to education. These features may be grafted on to the main site as with apps on pages, or be standalone apps. Just as Facebook citizens currently flick through the news feed and friends’ profiles, and “like” with a click of a button, in the future they could also be clicking to visit doctors in virtual reality on their profiles, take university courses or send dollars to distant relatives via messages.

In the early days of Facebook, a poster reading, “We’re only 1 per cent done”, hung on the company wall. An updated sign might now read, “We’re only 5 per cent done”.

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For a sense of how Facebook is going to change, we can travel from the heights of Nob Hill to council estates across Salford in the north of England, where tenants are using Facebook to pay their rent.

Based on current trading prices of about $80 a share, Facebook is worth about $208bn. That’s more than both Disney ($151bn) and Coca-Cola ($179bn)

Visiting the Facebook page of Salix Homes, the company that manages the estates in the centre of the city, residents can pay using an app embedded there. When the UK government made many people receiving housing benefit responsible for making rent payments directly, Salix turned to where tenants were already spending their time, on Facebook.

In the first few months, more than a third of Salix’s Facebook followers had used the app – mostly via their mobile phones. Facebook has flourished on mobile, where more than half its users are, and few people on the Salford estates have conventional computers. “A lot of people say that they don’t access the internet, but do access Facebook, not perceiving it as the internet as such,” says Salix’s James Allan.

The company is not alone in seeing Facebook as the ultimate place to reach people, an enabler for even very private services. Facebook has the ability to reach the masses wherever they live – because they also live on Facebook. London and San Francisco-based start-ups are working on ways for people to buy stocks, for example, or transfer money across borders on Facebook, and school teachers in the US are returning pupils’ assignments in private Facebook groups to discuss their homework.

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Facebook is no longer a social network. Four years ago, Mark Zuckerberg used to rhapsodise that everything was destined to be social. Two years ago, on Facebook’s first earnings call as a public company, he said the word “social” 24 times. But the word has fallen out of favour. On a recent call, he mentioned it just once.

“Social” is too limiting for Zuckerberg’s quest for dominance, too closely associated with much smaller rivals such as Twitter and Snapchat and with the doctrine of “sharing”, which is no longer suitable for everything Facebook wants to become. David Kirkpatrick, author of The Facebook Effect, a book on the company’s rise, points out that healthcare and finance are “naturally very private and closed” and not at all social. “Facebook has big opportunities that it has not even begun to tap in the personal data realm,” he says, adding that Facebook knows who you are better than any government issuer of ID. “If they could reassure on privacy, they could be a natural repository for a gigantic amount of healthcare information.” Facebook’s reachable, sortable mass is what lures companies to do business on the platform and keeps users locked in to using it like a utility – not necessarily its ability to “share” with friends. Its intimate knowledge of the likes and lives of the vast number of people who spend time on the site is becoming far more important than its previous sales pitch of being a social network.

Instead, Zuckerberg has a new, three-pillared mantra that rolls off the tongue of everyone at Facebook just as readily as the “S” word once did. The chief executive described his vision to investors for the first time on an earnings call last year. It starts with “Connecting Everyone”– a mission to make sure every one of the world’s 7.1 billion people can access the internet and, with it, Facebook. At its most outlandish, this means bringing in drone engineers who used to work for a tiny company in Somerset, England, to develop unmanned aircraft in the hope that they can beam down connectivity from the sky. At the duller end, it means contracts with network operators to make its apps free for customers, so that everyone with a feature phone can access a sliver of the information online.

According to a 2014 poll conducted by the Pew Research Center, the average adult user in the US has 338 Facebook friends

However, where the first pillar is ambitious, the second and the third border on the zealous. “Understanding The World” sounds like the goal of a school swot but it really means Facebook categorising all the information on its site – the updates, the likes, the pages – and making its own searchable database of information to rival Google. You can already use Facebook’s “graph search” in some regions to look for “friends who like trail running”. But one day you might use it as a more in-depth function, say, for photos of your colleagues’ cats before 1995 or family members who have made Facebook comments about the war in Iraq. As Zuckerberg explained, it is not simply about day-to-day updates but “building up long-term knowledge about the world and being able to answer questions for you that no other service can”.

The third pillar is the most difficult for current users to picture. Zuckerberg wants Facebook to help “build the knowledge economy”, to become a place where people create jobs, companies and growth and support “a larger economic shift in the world based on information and ideas”. Rather than wasting people’s productive time, it should increase productivity by giving people the tools to educate themselves and an audience for their businesses – in industries such as finance, education and healthcare.

Cory Ondrejka, vice-president of engineering at Facebook, told the Financial Times that Facebook’s mission has always been clear internally and was discussed “every minute since I joined four years ago . . . Mark’s vision for making the world more open and connected is about those three pillars: connect everyone, understand the world and build the knowledge economy using those two facts,” he said.

Zuckerberg indicated what he thinks Facebook could look like in the future when he acquired Oculus back in March. He let his guard down to gush about all the possibilities Oculus could enable without users leaving the house. “Imagine enjoying a courtside seat at a game, studying in a classroom with students and teachers all over the world, consulting with a doctor face-to-face or going shopping in a virtual store,” he said.

Ondrejka, who has recently been working closely with Oculus, thinks Facebook’s foray into virtual reality was also inevitable. “It is the next platform with the ability to share entirely new experiences. Virtual reality was always going to be a part of Facebook’s DNA in the very, very long term,” he says.

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However, this new Facebook – almost a country in its scale – could also be a tricky place to live. Lacking either a constitution or a vote on Facebook’s direction, its citizenry have entered a deal with the site that they are increasingly depending on – without knowing what it will become.

Adi Kamdar, a privacy campaigner at the Electronic Frontier Foundation, warns it could be hard to be a citizen in this “convoluted empire”, especially when Facebook has already lost many users’ trust even as a caretaker of photos and posts. “You start off with a single service that is a social network and build a profile about yourself, your friends, where you live, which you trust will be used in that capacity and maybe even used for ads,” he says. “But then all of a sudden it is synced up with your health information or used to create a payments system. This information you gave to them in one paradigm has expanded exponentially.”

He says consumers could benefit from a single company handling so much – creating “cool products” personalised for their needs – but they should be aware that “the company they are giving their information to now isn’t the company it is going to be a year from now, five years from now, 100 years from now”.

Astra Taylor, the author of The People’s Platform, which criticises large companies for dominating life online, says Facebook could commercialise areas which have previously been advert-free. “Traditionally, the classroom has been about the dissemination of information between a teacher and a student, it wasn’t an entity beholden to advertiser,” she says. “Facebook can’t value communications for their own sake. Whatever is being communicated, they have to wring data out of users.”

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Social is too limiting for Zuckerberg’s quest for dominance

Facebook’s mission stands the most chance of success in emerging markets, where there are fewer incumbents in industries such as finance, education and healthcare with the funds for a fightback.

In the developing world, where institutions and traditional corporate players often have a more feeble footing, Facebook could establish itself as the platform to reach the people. In fact, it is already using its apps to offer basic services, often through its Internet.org arm. Internet.org was founded by Zuckerberg in 2013 with a goal of making the internet 100 times more affordable through partnerships with mobile phone companies, deals with telecoms carriers in emerging markets and futuristic technologies. It is also clear about its role in spreading Facebook, as well as the internet, by whatever means necessary. In Zambia, for example, people can access basic healthcare information such as tips for pregnant mothers for free on an Internet.org app. In India, Facebook broadcasted debates during the national elections to inform voters in the world’s largest democracy.

This quick and easy way to access information which can be hard to come by is obviously attractive to users. If your choice is between sending money by Facebook or a money lender on the corner, or contacting a well-qualified doctor on the other side of the world rather than an under-resourced clinic in your town, it could be an easy decision to make. To some, putting this kind of power in the hands of Facebook is worrying. Evgeny Morozov, the author of To Save Everything, Click Here, warns that Facebook could become a “de facto provider of infrastructure” and services that people used to expect to receive from the state, making it hard to opt out: “As much as I’d like to believe Internet.org is a purely humanitarian mission, I don’t. I think it is a way of capturing an emerging market one way or another. If Facebook doesn’t, then Google will capture them.”

This new Facebook – almost a country in scale – could be a tricky place to live

Taylor warns that, contrary to Facebook’s message of creating opportunity for users in developing economies, it could introduce a new division in the digital landscape. Facebook often strikes deals with telecoms companies to allow access to its app for free, which she argues could give the user a false choice between, for example, learning or receiving healthcare advice on Facebook, or paying for expensive data plans in order to find the information elsewhere online.

In Rwanda, working with the government and edX, the open online learning platform co-founded by Harvard and MIT, Facebook is developing an app with which Rwandan students can participate in free lessons over data connections as slow as 2G. Lou Wang from edX, who has led the partnership, says the company wants to expand the app across the developing world after it unveils it in Rwanda next year. “We’re talking about reaching individuals on their long commute to work,” he says, “to make sure those two hours aren’t wasted . . . allowing them to take advantage of that time and educate themselves, giving them major opportunities that didn’t exist before”.

Taylor says this potential involvement in education might not be welcomed in the west. “A certain privileged population wouldn’t stand for it: it is hard to see where Facebook would fit into the American education system but for those who don’t have other options for internet access it feels like another degree of digital inequality.”

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Facebook might have an almost unique opportunity to remake services across emerging markets because it enjoys a certain Silicon Valley gloss. Technology companies have been celebrated for developing free services that help improve people’s quality of life, even during a global recession where money was tight for most. In this new dotcom boom, start-up fever has spread around the world fuelled by the idea that a simple app can make a fortune. But after the Edward Snowden revelations, accusations of tax evasion and conflicts with the authorities in the European Union, some are beginning to question whether technology companies can do no wrong.

Facebook may indeed improve the world for millions. But could this affection for Silicon Valley and its relentless pursuit of innovation lead us to entrust too much to one gigantic company? “When Facebook does this it is considered entrepreneurship and innovation,” notes Morozov. He invites a comparison with the banking industry. “If Goldman Sachs was creating a series of independent states around the world, I don’t think it would be as unproblematic – because Goldman Sachs cannot lie as effectively as Facebook. No one would ever suspect them of trying to improve the world.”

Hannah Kuchler is the FT’s San Francisco correspondent

Photographs: Getty; Bloomberg

Illustrations by Harry Haysom