Time for Zuckerburg to Face the Music of the Public

Editor's note: Douglas Rushkoff, who writes regularly for CNN.com, is a media theorist and the author of "Program or Be Programmed: Ten Commands for a Digital Age" and "Life Inc: How Corporatism Conquered the World and How We Can Take it Back."

(CNN) -- We all knew he'd eventually get around to it: Mark Zuckerberg is expected to finally bring Facebook public. The company is reported to be preparing to file for an IPO -- initial public offering -- through which anyone will be able to buy shares of the social networking company on an open stock exchange.

As a media theorist, I used to ignore these business shenanigans. Who cares if these companies are private or public, profitable or in the red? How many non-Wall-Street-Journal readers even knew what an IPO was back before the Internet created the likes of AOL, Netscape, and Google?

But the fact is we do now think about the stock market. Many of us are aware that Apple's market capitalization is fast approaching half a trillion dollars, making it either the largest or second-largest company in the world behind Exxon Mobil - depending on the week. So when we hear that Facebook is preparing for an IPO that will likely dwarf Google's entrance to the public markets in 2004, particularly considering that the company doesn't sell tangible goods or services in the traditional sense, we can't help but wonder what this will mean for the future of Facebook, its users, its competitors, and the greater economy.

The way it appears at first glance - particularly for those who have been following Mr. Zuckerberg since he launched "The Facebook" from his college dorm or, better, those who have seen the movie "The Social Network" - is that the Zuckerberg juggernaut is continuing unabated.

This new form of media -- social networking -- will not only redefine the Internet, change human relationships, create a new marketing landscape, and challenge Google, but it will now rescue and alter the economy itself. Like virtual kudzu, it will infiltrate the financial markets, creating new sorts of opportunities for this peer-to-peer "social" economy to take root. We will all make our living playing Farmville, or designing new versions of it, or investing in companies that do.
Facebook expected to be largest tech IPO

In reality, however, I don't think we are witnessing Facebook's victory over the financial markets as much as its acquiescence to them. Yes, Apple challenged Microsoft for software supremacy, just as Facebook now challenges Google for Internet supremacy. But there's another operating system churning away beneath all this high tech activity, and it's called corporate capitalism. If a company is big enough -- and that means simply holding enough money -- then sooner or later that money influences the rest of the company's activities.

In Facebook's case, it meant approaching the legal limit of 500 investors, which triggers a requirement to open the books to regulatory scrutiny. It also meant dealing with a few thousand coveted employees who took jobs at Facebook instead of Google or Apple or anywhere else because they were hoping to get in on a big thing. The promise of cashing in a few million dollars worth of stock options helps many a programmer make it through a late night of coding.

The same goes for those who invested in Zuckerberg five or more years ago and want to cash in before the "social web" bubble pops, if it's going to. Facebook was taking so long to get to market that many people had begun selling their shares privately on what are known as secondary markets, putting Facebook's valuation even further out of the company's own hands.

Simply becoming a multi-billion-dollar company changes the essence of its goals, activities, and purpose. Its bloodstream becomes filled with cash, and cash has its own agenda. For just like print, TV, or the Internet, money is a medium, too. It has biases, or tendencies, programmed right into it. The kind of money we happen to use -- bank-issued central currency -- is biased toward lending. That's why we call our system "capitalism." It's about the capital: Our money is designed to favor those who lend it to others who actually use it to build companies or create value.

The more money a company takes in, the more obligated it becomes to function in accordance with the properties and rules of money. For example, since becoming public, Google has had to prove its devotion to its shareholders' interests by cutting pet programs, showing earnings' growth, and demonstrating focus over big dreams. Out with public experiments like Google Labs, in with products like Android try to compete with Apple's iOS and G+ to compete with Facebook. No more touting that employees get 20% of their work hours to do whatever they want. It's a real corporation, now, and has to behave like one.

By all accounts, Zuckerberg was trying to delay this eventuality as long as possible. He knows that becoming the CEO of a public company will not be nearly as much fun, or as free, as running an Internet startup. However much we may not like his vision for our future, his primary purpose was to change the world. He wanted to create the operating system on which human social activity took place.

What he has ultimately succumbed to, however, is the fact that Facebook was running on top of another operating system all along. Instead of revolutionizing our reality, by filing an IPO Mark Zuckerberg is finally getting with the program.

SOPA Lobbying Dollars Going to Waste

The controversial anti-piracy bills that attracted tens of millions of dollars of lobbying for and against the proposed laws ironically were killed by free publicity.

"Old" media companies spent huge sums of money in support of the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA). Those opposed -- Internet and "new media" companies -- lobbied hard and spent gobs too, though far less than their more organized rivals.

But Silicon Valley had a trick up its sleeve that trumped the millions of dollars more in lobbying muscle and the more established Washington presence of the old media guard: They reached out directly to their users for free.

Google, Wikipedia and others altered their homepages and websites in opposition of the bills last week, making the issue a topic of popular discussion across the country.

"The Internet really flexed their muscles during this fight, and their infrastructure helped them advocate their positions that others don't have at their disposal," said Michael Beckel, money-in-politics analyst at the Center for Responsive Politics.

It helped that the two bills were an issue that the public cared about. The opposition movement was trending on Twitter, and thousands of protesters joined in New York and San Francisco on Jan. 20 in opposition of the bills.

"When you have an issue that is salient, and the public cares about it, the money matters less," said Lee Drutman, data fellow at the Sunlight Foundation, a nonpartisan research organization. "Money matters more when it's a behind-closed-doors issue that hasn't faced much public scrutiny."

Lobbying analysts also note that it's really hard to change the status quo and pass legislation. Silicon Valley had the advantage of playing defense, which is a much better position to be in, experts said. There are so many hurdles to jump before a bill becomes law, so being on the opposition is always a good start.

It may have been painted as a David vs. Goliath fight initially. But the end result proved that the most money doesn't always win in Washington.
SOPA explained: What it is and why it matters

Media companies like Comcast (CMCSA, Fortune 500), Viacom (VIA), News Corp. (NWS), and CNNMoney parent Time Warner (TWX, Fortune 500) led the support of the bills, each spending millions of dollars on the issue.

Media lobbyists, including the motion picture, recording industry, cable, and broadcaster associations, also added millions of dollars to the fight, as did credit card firms Visa (V, Fortune 500), MasterCard (MA, Fortune 500) and American Express (AXP, Fortune 500).

Loads of cash were spent by the opposition as well, but most of that came from Google (GOOG, Fortune 500). After the search giant's millions, there was a steep drop off in lobbying dollars, with Yahoo (YHOO, Fortune 500), eBay (EBAY, Fortune 500), Amazon (AMZN, Fortune 500) and Microsoft (MSFT, Fortune 500) lobbying in the hundreds of thousands of dollars each.

Lobbying totals are only very rough estimates because companies often include multiple bills and issues in their lobbying reports to Congress. But Washington analysts said SOPA and PIPA were among the hottest issues in the fourth quarter.

SOPA and PIPA Hears the Internet Roar

When the entire Internet gets angry, Congress takes notice. Both the House and the Senate on Friday backed away from a pair of controversial anti-piracy bills, tossing them into limbo and throwing doubt on their future viability.

The Senate had been scheduled to hold a proceedural vote next week on whether to take up the Protect IP Act (PIPA) -- a bill that once had widespread, bipartisan support. But on Friday, Senate Majority Leader Harry Reid said he was postponing the vote "in light of recent events."

Meanwhile, the House of Representatives said it is putting on hold its version of the bill, the Stop Online Piracy Act (SOPA). The House will "postpone consideration of the legislation until there is wider agreement on a solution," House Judiciary Committee Chairman Lamar Smith said in a written statement.

The moves came after several lawmakers flipped their position on the bills in the wake of widespread online and offline protests against them.

Tech companies, who largely oppose the bills, mobilized their users this week to contact representatives and speak out against the legislation. Sites including Wikipedia and Reddit launched site blackouts on January 18, while protesters hit the streets in New York, San Francisco, Seattle and Washington, D.C. Google (GOOG, Fortune 500) drew more than 7 million signatures for an anti-SOPA and PIPA petition that it linked on its highly trafficked homepage.

The tide turned soon after the protest, and both bills lost some of their Congressional backers.

"I have heard from the critics and I take seriously their concerns," Smith said Friday in a prepared statement. "It is clear that we need to revisit the approach on how best to address the problem of foreign thieves."

PIPA and SOPA aim to crack down on copyright infringement by restricting access and services to sites that host or facilitate the trading of pirated content. (Click here for our explainer: What SOPA is and why it matters.)

Backed by media companies, including CNNMoney parent Time Warner, the bills initially seemed on the fast track to passage. PIPA was approved unanimously by a Senate committee in May.

But when the House took up its own version of the bill, SOPA, tech companies began lobbying heavily in opposition -- an effort that culminated in this week's demonstrations.

Reid hinted that PIPA may not be dead yet, saying: "There is no reason that the legitimate issues raised by many about this bill cannot be resolved."

Meanwhile, alternative legislation has also been proposed. A bipartisan group of senators introduced the Online Protection and Enforcement of Digital Trade Act (OPEN) on January 18 -- the same day as the Wikipedia site blackout.

Among other differences, OPEN offers more protection than SOPA would to sites accused of hosting pirated content. It also beefs up the enforcement process. It would allow digital rights holders to bring cases before the U.S. International Trade Commission (ITC), an independent agency that handles trademark infringement and other trade disputes.

California Republican Darrell Issa introduced OPEN in the House, and Oregon Democrat Ron Wyden introduced the Senate version. OPEN's backers had posted the draft legislation online and invited the Web community to comment on and revise the proposal.

Soon after SOPA and PIPA were tabled, Issa released a statement cheering "supporters of the Internet" for their protest efforts.

He wrote: "Over the last two months, the intense popular effort to stop SOPA and PIPA has defeated an effort that once looked unstoppable but lacked a fundamental understanding of how Internet technologies work."

SOPA and PIPA - Its Not a Middleton

NEW YORK (CNNMoney) -- While Internet giants staged a massive online protest against proposed anti-piracy legislation, hundreds gathered in New York for an in-person show of opposition.

Members of the New York tech community massed outside the offices of U.S. senators Charles Schumer and Kirsten Gillibrand on Wednesday afternoon in a protest coordinated by NY Tech Meetup, a local networking group.

"We're here to make sure our senators know that the New York tech community, which employs tens of thousands of people, really will not take no for an answer," said Nate Westheimer, one of the protest's organizers. "The provisions that are being suggested right now would undermine the way the Internet works."

Similar protests are scheduled to take place Wednesday in San Francisco, Seattle and Washington, D.C.

The online and offline protests are aimed at a pair of bills currently under consideration in Congress: the House's Stop Online Piracy Act (SOPA) and the Senate's Protect IP Act (PIPA). The bills aims to crack down on copyright infringement by restricting access to sites that host or facilitate the trading of pirated content. (Click here for our explainer: What SOPA is and why it matters.)

Supporters, including CNNMoney parent company Time Warner, say measures like SOPA and PIPA are needed to crack down on rampant online piracy. Opponents counter that the bills are full of vague and broad mandates that could wreak havoc on the Web.

That's the line taken by those who turned out for Wednesday's protest in New York.

"We showed up because we think Congress is misinformed about the gravity of what they're proposing," said protester Dan Herman, the founder of business software maker ChatID.

Sebastian Delmont, the "chief geek" at real estate website StreetEasy, said he came "because I want to save the Internet."

Waving a placard with an anti-PIPA poem on it, he added: "Proponents of the bill say, 'Well, what is the alternative to piracy?' We've shown them over the years. It's iTunes, it's Netflix. People pirate for convenience. When they have cheap options that are convenient, they don't pirate."

Senators Gillibrand and Schumer released a joint response to the protest.

"There are two important issues in this debate: continued freedom of expression on the Internet and the ability to block online piracy. We believe that both sides can come together on a solution that satisfies their respective concerns," they said in a written statement.

The pair of anti-piracy bills have sparked an all-out war between Hollywood and Silicon Valley. The legislation enjoyed rare bipartisan support and had been on track for a quick passage until the tech industry mounted a fierce opposition. Now the bills have turned almost toxic in Washington.

"We're at a tipping point," a Senate Democratic aide told CNN on Tuesday.
"It will either become a huge issue or die down a bit, and that will determine the future of this."
SOPA explained: Why it matters

Schumer, who sits on the Senate Judiciary committee, voted in favor of PIPA in May when the committee approved the bill and sent it on to the full Senate for consideration. That vote was unanimous, with complete bipartisan support.

PIPA is currently slated for a Jan. 24 vote in the Senate, but the massive blowback from the Internet community has many lawmakers reconsidering. Six senators who backed the bill in May sent Senate Majority Leader Harry Reid a letter last week asking him to delay the vote.

"The process at this point is moving too quickly," they wrote. "We have increasingly heard from a large number of constituents and other stakeholders with vocal concerns."

That's exactly what those protesting on Wednesday hoped to get across.

Local tech leaders, including Google (GOOG, Fortune 500) head of public policy Andrew McLaughlin, Reddit founder Alexis Ohanian and tech writer Clay Shirky, made speeches at the protest, while the crowd chanted slogans including: "This is what democracy looks like."

That's a rally cry that's also popular a few blocks further south, at New York's Occupy Wall Street protest.

"This might be a very big turning point for people," said rally coordinator Westheimer. "As the generation of technologists you see today get a little bit older, you're definitely going to see them get more in politics."