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Mark Zuckerberg doesn't think Facebook is trapping users in a bubble.

There's a popular theory around social media called the "filter bubble." It's the idea that as users naturally subscribe and follow other users that share their interests, they get trapped in a self-reinforcing feedback loop: All they see is more information that "confirms" their beliefs, while dissenting opinions get filtered out.

Sorting algorithms, which show the user what they supposed want to see, only reinforce this "bubble" - cutting off users from the real world.

On Wednesday, Facebook reported its second-quarter earnings for 2016. ( It smashed it, beating Wall Street's expectations on just about every important metric.) On a call with analysts afterwards, one asked CEO Mark Zuckerberg whether he believes this "filter bubble" hinders communication ( transcript via Seeking Alpha):

"Mark, how do you think about this line of thought that because people see things that they are already in line with what they believe, communication is hindered?"

Zuck's response was to shoot down the theory altogether. Here's what he said, emphasis ours:

"So we have studied the effect that you're talking about, and published the results of our research that show that Facebook is actually, and social media in general, are the most diverse forms of media that are out there. And basically what - the way to think about this is that, even if a lot of your friends come from the same kind of background or have the same political or religious beliefs, if you know a couple of hundred people, there's a good chance that even maybe a small percent, maybe 5% or 10% or 15% of them will have different viewpoints, which means that their perspectives are now going to be shown in your News Feed.

"And if you compare that to traditional media where people will typically pick a newspaper or a TV station that they want to watch and just get 100% of the view from that, people are actually getting exposed to much more different kinds of content through social media than they would have otherwise or have been in the past. So it's a good sounding theory, and I can get why people repeat it, but it's not true. So I think that that's something that if folks read the research that we put out there, then they'll see that."

Not everyone agrees with Facebook's research

In short Mark Zuckerberg argues: There's no filter bubble - especially when compared to traditional media. Users' feeds are more diverse in opinions than if they were looking at other sources.

The 32-year-old CEO is likely referring to a peer-reviewed study put out by Facebook in 2015, which asserted that - contrary to the filter bubble theory - users see plenty of media on the social network that runs counter to their beliefs. "An average of almost 29 percent of the news stories displayed by Facebook's News Feed also appear to present views that conflict with the user's own ideology," The New York Times reported at the time.

But not everyone agreed with the results of the survey. Academic Zeynep Tufekci was critical of the sample of users Facebook chose to focus on: "The research was conducted on a small, skewed subset of Facebook users who chose to self-identify their political affiliation on Facebook and regularly log on to Facebook, about ~4% of the population available for the study."

This, she wrote in a post on Medium, is not going to be reflective of the majority of Facebook users. "People who self-identify their politics are almost certainly going to behave quite differently, on average, than people who do not, when it comes to the behavior in question which is sharing and clicking through ideologically challenging content. So, everything in this study applies only to that small subsample of unusual people."

Tufekci added: "The study is still interesting, and important, but it is not a study that can generalize to Facebook users. Hopefully that can be a future study."

So while actively political users may retain a more diverse news feed, she argues, that's not necessarily true of the majority of "ordinary" Facebook users who don't actively try to challenge themselves politically.

Users need to take responsibility for their choices - but so does Facebook

No-one is entirely blameless in this. If users aren't actively seeking out opposing viewpoints, then it's little surprise they don't see any. But at the same time, it's obvious that Facebook's algorithms - trained to show users only the most perfect, engaging content for them - are going to pander to users' confirmation bias.

This isn't helped by the fact that the general public are largely clueless about how Facebook's news feed even works, with "folk theories" circulating about it that can be wildly divergent from the truth. If users don't understand Facebook's mechanisms, it's questionable as to whether they can make informed decisions when using it.

This isn't an abstract academic debate. Facebook is becoming the dominant platform for news distribution across the globe, far more powerful than any single media outlet. If users don't understand why they're seeing certain posts and not others, and how the decisions of Facebook's algorithms can shape the civic discourse, then that's a problem.

Here's a transcript of the question, courtesy of Seeking Alpha:
Carlos Kirjner-Neto - Sanford C. Bernstein & Co. LLC
Hi. Thanks for taking my question. First, some people believe that much of what users see in their News Feed is driven by their behavior and preferences. And as a consequence, the stories they end up seeing are always, or almost always, in line with their existing views and preferences. Does this phenomenon in the end increase - does this phenomenon lead to increased adoption in use of Facebook creating more polarization of views and less effective communication, at least in some areas of people's lives? Mark, how do you think about this line of thought that because people see things that they are already in line with what they believe, communication is hindered? Second, when it comes to video ad formats, are you philosophically opposed to pre-rolls, and if yes, why? And if not, what is missing for you to adopt that? Thank you.
Mark Elliot Zuckerberg - Founder, Chairman & Chief Executive Officer
So we have studied the effect that you're talking about, and published the results of our research that show that Facebook is actually, and social media in general, are the most diverse forms of media that are out there. And basically what - the way to think about this is that, even if a lot of your friends come from the same kind of background or have the same political or religious beliefs, if you know a couple of hundred people, there's a good chance that even maybe a small percent, maybe 5% or 10% or 15% of them will have different viewpoints, which means that their perspectives are now going to be shown in your News Feed.

And if you compare that to traditional media where people will typically pick a newspaper or a TV station that they want to watch and just get 100% of the view from that, people are actually getting exposed to much more different kinds of content through social media than they would have otherwise or have been in the past. So it's a good sounding theory, and I can get why people repeat it, but it's not true. So I think that that's something that if folks read the research that we put out there, then they'll see that.

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Mark Zuckerberg denies that Facebook is trapping its users in 'filter bubbles'

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Mark Zuckerberg doesn't think Facebook is trapping users in a bubble. There's a popular theory around social media called the "filter bubble." It's the idea that as users naturally subscribe and follow other users that share their interests, they get trapped in a self-reinforcing feedback loop: All they see is more information that "confirms" their beliefs, while dissenting opinions get filtered out.

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Didi Chuxing is the ride-sharing app's newest friend.

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Taxi-booking app Uber has agreed to sell its business in China to rival Didi Chuxing.

The two firms have been fierce competitors, but Didi Chuxing dominates the Chinese market with an 87% share.

Uber China launched in 2014 but has failed to make any profit so far.

Cheng Wei, founder and chief executive of Didi Chuxing, said the two companies had "learned a great deal from each other over the past two years in China's burgeoning new economy".

He added that the deal would "set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level".

As part of the deal, Mr Cheng will join the board of Uber, while Uber chief executive Travis Kalanick will join Didi's board.

Uber's China business will retain its separate branding while US-based Uber Technologies will hold a stake of about 17.5% in the combined company.

Didi Chuxing is backed by Chinese internet giants Tencent and Alibaba, and has also invested in Uber's rival US taxi-booking service Lyft.

Big losses

Uber has been struggling to break into the Chinese market despite having Chinese search engine Baidu as an investor.

In February, the company admitted it was losing more than $1bn a year in China, spending huge sums to subsidise discounted fares.

"Funding their China dreams was becoming too expensive for Uber," Duncan Clark, chairman of Beijing-based consultancy BDA, told the BBC.

"Many saw it as an obstacle to their own IPO (Initial Public Offering)."

Uber chief Travis Kalanick said that "as an entrepreneur, I've learned that being successful is about listening to your head as well as following your heart".

"Getting to profitability is the only way to build a sustainable business that can best serve Chinese riders, drivers and cities over the long term."

The fierce rivalry had led both companies to heavily subsidise their journeys. The merger is likely to see fewer such subsidies.

"One thing to watch carefully is how quickly consumers feel the impact as subsidies are withdrawn," Mr Clark added.

Analysis: Karishma Vaswani, Asia business correspondent

If you can't beat them, join them - that may be what Uber's ultra ambitious Travis Kalanick was thinking. This deal may be Uber's best available option on the table.

Uber put up a good fight, there's no doubt about it. And it may not all be bad news.

If the departure from the Chinese market means a sizeable stake in the biggest ride-sharing player in the world's second largest economy, which currently has a potential customer base of some 750 million people, and that's only going to grow - then that's not too shabby.

Recognising this was one fight he wasn't going to win, may well turn out to be a sign of Mr Kalanick's maturity and business acumen in the future.
Read Karishma's blog in full
Didi Chuxing in brief:

China's number one taxi-booking app.

Claims to have an almost 90% market share and some 14 million journeys every day.

The company is the product of a merger: In February 2015, Didi Dache and Kuaidi Dache merged to form Didi Kuaidi, later renamed Didi Chuxing.

It is the driving force behind an alliance with India's Ola, South East Asia's Grab and US firm Lyft, allowing users to use their apps to hail from the partner services when abroad.

New rules

The deal with Didi Chuxing comes just days after China agreed to provide a legal framework for taxi-ordering apps.

Both Uber and Didi have welcomed the decision, having previously operated in a legal grey area in the country.

While the apps are widely popular, they have undermined business for normal taxis and have been met with protests by cab drivers.

The new rules will take effect on 1 November and will, among other things, forbid such platforms to operate below cost.

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Taxi-booking app Uber has agreed to sell its business in China to rival Didi Chuxing. The two firms have been fierce competitors, but Didi Chuxing dominates the Chinese market with an 87% share. Uber China launched in 2014 but has failed to make any profit so far.

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The world loves to chat, and mobile phones have made instant yakking as easy as pie, whether by text, video, photo, voice, or all methods combined.

No wonder so many of us blunder into lamp-posts and each other rather than looking where we're going.

But which dedicated chat app do you use? WhatsApp, Snapchat, Viber, Line? That largely depends on where in the world you live.

In China the biggest chat network is WeChat; in Japan the market leader is Line; KakaoTalk rules OK in Korea; Kik is huge in Canada and the US; Hike bosses India; while in the Arab world niche networks such as Palringo and Soma dominate.

And the number of chat platforms continues to proliferate, as tech companies aim to emulate the eye-watering valuations achieved by the leaders.

Snapchat was recently valued at nearly $20bn (£15bn). Facebook bought WhatsApp for $22bn in 2014 and this week changed the app's privacy policy to allow businesses to message its billion-plus users directly.

In July, Line raised about $1.3bn in a stock market flotation that valued the company at around $6bn. And now chat networks are even investing in each other, with China's WeChat recently leading a $175m funding round in India's Hike network.

But can the market sustain so many platforms? Can we have too much chat?

Talkaholics

In 1993, US researchers James C McCroskey and Virginia P Richmond created the Talkaholic Scale, a method of identifying people who were aware of their tendencies to "over-communicate in a consistent and compulsive manner".

In the intervening two decades, this scale could be applied to the way people obsess about their mobile devices.
Source: Statista
Initially it was SMS and text messaging that made such communication compulsive. Then it was instant messaging with text, photos and videos.

And now you can access banking, shopping and other services within these chat apps.

"WhatsApp, WeChat, Line, Snapchat and a handful of others would seem to have the platform side sewn up as we head towards a one-stop-shop approach, where messaging apps become almost a command line for people's lives," says Eamonn Carey from Techstars, the tech start-up accelerator.

So how do the newcomers differentiate themselves in such a crowded market and keep their users loyal?

Chat goes niche

The trend is towards chat that can be conducted in a safe place by users who share a common interest.

"Niche networks will have a big role to play in what otherwise is a saturated market," says Mr Carey.

For example, London-based Palringo is a social chat platform that helps people find games that can be played in chat groups of up to 2,000 people.

This combination of chat and games helped Palringo become one of the fastest-growing UK tech companies last year, with these chat games making up to 50% of its revenues through in-game purchases.

"The proliferation of chat networks when there are different territory-specific market leaders meant we had to find a common language," says Palringo chief executive Tim Rea.

"That language is games and we're seeing huge growth with our in-chat games."

Wire offers chat with ad-free embedded YouTube videos and gifs (short animations).

Backed by Skype co-founder Janus Friis, the company says it is attracting 200,000 users a month. It focuses on privacy as its unique selling point.

Co-founder and chief technology officer Alan Duric explains: "Wire is a privacy-focused messaging app that works across devices and incorporates chat features that users love - text, voice, video and pictures - underpinned by end-to-end encryption that is completely open sourced."

Popular chat app Telegram has also emphasised encryption as a key feature, much to the annoyance of European leaders concerned about the use of such secret platforms by potential terrorists.

What's the story?

But the battle to keep users is even more fierce than the battle to attract them. Chatters are a fickle lot it seems.

In August, picture messaging app Instagram released its "Stories" feature where users can post moments of their day in a slideshow of video, photos and captions.

This feature almost replicates a similar component that has proved very successful on rival chat network SnapChat, uncannily also known as "Stories".

This duplication of content reflects how users of chat networks are quick to jump ship if another app is offering something new and appealing.

According to a survey of 30,000 people aged 12-25 from comparison app Wishbone, 43% of respondents would delete Snapchat if Instagram's new Stories emulated the popular "filters" feature originally created by Snapchat.

Filters enable chatters to distort their photos and overlay them with cartoonish add-ons, from a dog's ears to a cat's whiskers.

Biz buzz

Away from the consumer world, business chat apps are also flourishing.

Intercom is a messaging platform that is trying to establish itself as a business platform, while having the look and feel of the best consumer messaging apps. It works with 13,000 businesses and more than a billion people use it.

"What's really exciting to us is the potential of messaging, as it is the most personal medium we have to communicate virtually," says Eoghan McCabe, Intercom's chief executive.

"Businesses can use messaging to avoid being faceless, stuffy brands and connect on a human level with their customers."

There are plenty of others, from Slack to Flock, HipChat to Zapier - the list seems endless.

Although chat apps don't appear to have reached saturation point just yet, new entrants are having to box clever to find their niche in this ever-expanding market.

Not all may survive, but with the number of global smartphone users forecast to rise from about two billion now to nearly three billion in 2020, it looks like there's going to be a lot more chatting going on.

Follow Technology of Business editor @matthew_wall on Twitter
Click here for more Technology of Business features

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How chat apps are transforming the global conversation

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The world loves to chat, and mobile phones have made instant yakking as easy as pie, whether by text, video, photo, voice, or all methods combined. No wonder so many of us blunder into lamp-posts and each other rather than looking where we're going. But which dedicated chat app do you use?

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GOOGLE left. Facebook is blocked. Amazon is struggling to make headway. And if further proof were needed that China's tech market is a world apart, this week seemed to provide conclusive evidence. Uber, a ride-hailing service that is the world's most valuable startup, decided to sell its local unit to Didi Chuxing, a Chinese rival (see article). Its China dream, like those of so many before, is dead.

For many, the lessons of this latest capitulation are clear. China is a sort of technological Galapagos island, a distinct and isolated environment in which local firms flourish. Chinese firms are protected from external competition by government regulation and the Great Firewall. And that protection means that they need not innovate but can thrive by copying business models developed in the West. In short, China is closed, its firms are cosseted and their talent is for mimicry.
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At first sight, Uber's retreat appears to fit this damning profile. The startup has ceded China to Didi: it will concentrate on its home market and elsewhere. Uber's surrender was caused partly by regulations, issued at the end of July by the Chinese authorities, that in effect outlawed subsidies-Uber spent $1 billion a year in incentives to Chinese drivers and riders. Now Didi, whose forerunner firms were founded in 2012, three years after Uber introduced ride-hailing, can make hay. But look more closely and a more positive picture emerges-not just of Didi, but of China's technology firms as a whole.

Getting the message

The usual story about the isolated nature of the Chinese market is that foreign firms are either blocked altogether or hobbled by regulators. The government has indeed restricted competition in some areas-which is why China has subpar clones of Western firms, such as Baidu in search or Renren, an ailing knock-off of Facebook. But China is not as impenetrable as its critics suggest. WhatsApp, the world's most popular messaging app, which is owned by Facebook, is freely available in China; yet it is dwarfed by WeChat, China's leading app (which has also fought off Alibaba, a formidable local internet giant). China is the largest market for Apple's iPhone. And Uber made a valiant effort to establish itself in China, the world's largest ride-hailing market: a 17.7% stake in Didi is not a bad consolation prize. Nor are Chinese tech giants walling themselves off from the rest of the world. They have invested in American startups, including Snapchat and Lyft, and bought mobile-gaming firms like Supercell of Finland and Playtika of Israel.

Being present in the Chinese market is all very well, comes the retort, but not if you are stopped from winning. That gives too little credit to China's tech leaders. Ride-hailing, like many online businesses, is a cut-throat, winner-takes-all market: Didi itself is the product of a 2015 merger of two local firms. Uber was outcompeted. Globally, Uber arranged its billionth ride at the end of 2015, after five years in business; Didi arranged 1.4 billion rides in 2015 alone, just in China. Uber struggled to raise its market share in China above 10%. Didi understood the local culture, integrated better with social-media platforms and got taxi drivers onside by incorporating them into its app from the beginning. In outlawing subsidies, the regulators called time on a fight the American firm had already lost.

Similarly, whatever the settings of the Great Firewall, there is nothing outside China that offers WeChat's combination of features. It has over 700m monthly users, and combines messaging, voice calls, browsing, gaming and payments (see article). It can be used for everything from paying parking tickets to booking a hospital appointment, ordering food or paying for a cup of coffee. WeChat is not so much an app as an entire mobile operating system, and accounts for more than one-third of all time spent online by Chinese mobile users; HSBC, a bank, values the app at over $80 billion. To Chinese users, Western apps look hopelessly backward.

WeChat is the best riposte to the condescending, widely held belief that Chinese internet firms are merely imitators of Western ones, and cannot innovate themselves. But it is not the only example. Alibaba kick-started Chinese e-commerce with the clever trick of holding payments in escrow, helping buyers and sellers establish trust. It now offers services that exploit its vast customer database, including credit-scoring, digital marketing, and vetting visa applicants and users of dating sites. Didi's ride-hailing app includes novel features such as on-demand bus services and the option to request a test-drive of a new car. Sina Weibo, the Chinese equivalent of Twitter, has a built-in payments system and supports premium content, both features that Twitter lacks. With revenue from payments, virtual goods and gaming, Chinese internet firms are also much less dependent on online ads than Western rivals.

As a result, the flow of ideas between China and the West is now two-way. Facebook's efforts to incorporate payments and commerce into its Messenger app are inspired by WeChat, as is Snapchat's expansion from a messaging app into a media portal, and the sudden enthusiasm of Google, Facebook and Microsoft for bots (smart software that chats with customers). Western consumers are having their experience of the mobile internet shaped by a Chinese success story. Companies that want a glimpse of the future of mobile commerce should look not just to Silicon Valley but also to the other side of the Pacific.

Digital dragons

Policymakers should study China, too. No other place will reveal more about the advantages and drawbacks of winner-takes-all digital markets. As WeChat shows, a single dominant app, particularly with a payments system included, is amazingly convenient for users. But monopolies can also spell danger. Now that Didi has a 90% market share and no serious rivals to speak of, riders can expect to pay more and drivers to be paid less. How to strike the balance between convenience and dominance is the great question for regulators in the digital age. One lesson is already clear: compared with Renren and Baidu, Didi and WeChat were strengthened by fierce rivalries. If China's tech trailblazers aim to become truly global champions, then competition is their friend. Watch closely, world.

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GOOGLE left. Facebook is blocked. Amazon is struggling to make headway. And if further proof were needed that China's tech market is a world apart, this week seemed to provide conclusive evidence. Uber, a ride-hailing service that is the world's most valuable startup, decided to sell its local unit to Didi Chuxing, a Chinese rival (see article).

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2 - Global marketing case study 2 - Question Sheet