Social Network (12)
The fallout from the U.S. Senate's Facenote hearing was enormous.
Goldenberg, the CEO, bowed his head and apologized, promising to come up with reforms, but it wasn't enough to stop the stock from falling.
Emily Heisen argued that if Facenote was ever going to solve its fundamental problems, platform operators had to be held responsible for hate content and fake news.
That argument quickly led to real legislative movement.
Centered on the House Energy and Commerce Subcommittee, lawmakers began discussing amendments to Section 230 of the Communications Decency Act.
Section 230 defined platform operators as intermediaries rather than publishers.
Because of that clause, companies like Facenote had been exempt from legal punishment for content users uploaded.
In other words, even if hate content or fake news was posted by fake accounts, the blame belonged to the person who uploaded it, not the platform. Now they were moving to change that law.
Facenote was a global service.
The damage caused by the scandals now coming to light wasn't limited to the United States; the entire world was affected.
Parliaments and regulatory agencies in other countries moved as well.
One piece of bad news piled on top of another, and Facenote found itself facing the worst crisis in its history.
The aftermath of Facenote's stock collapse didn't calm down easily.
It was important not to misunderstand this: I hadn't brought down a healthy, solid company through conspiracy and manipulation. Even if I hadn't done a thing, Facenote would have crashed about six months later anyway.
The reason was simple: revenue was beginning to decline in earnest because of Enple's and Guble's tightened privacy measures, and for the first time since the company's founding, monthly active users had dropped by about a million.
On top of that, earnings guidance had been cut sharply, and the stock lost 28 percent in a single day.
This time, all I'd done was bring the collapse forward.
Continue Capital had closed out its short position and booked $18 billion. But the job still wasn't finished.
I said to David, “Let's contact LinkLabs now.”
“You really want to acquire them?”
“Of course. If not now, the chance will be gone.”
I thought back to my conversation with Mike Goldenberg.
He had made it clear that, no matter what, he intended to acquire LinkLabs. Under normal circumstances, it would have been nearly impossible to shake that resolve.
But now...
If the stock had already crashed by 50 percent, the situation changed completely.
On top of that, he would be spending the foreseeable future appearing before hearings around the world, getting hammered from every direction, and dealing with regulators and lawsuits in country after country.
No matter how strong Goldenberg's will was, there was no way he could push through a $40 billion acquisition under those conditions.
For us, it was the opportunity of a lifetime.
I went back through the materials on LinkLabs.
The two founders held 33 percent of the company, while the remaining 67 percent belonged to an investment firm called Corning Company.
They hadn't originally planned to sell, but once they started developing the technology, they realized commercialization would be far from easy.
That made sense. The technical difficulty was simply too high.
Because it was a technology that connected the brain and the computer, it drew deeply on computer engineering, neuroscience, and electrical engineering alike.
It wasn't just advanced science; it was also a medical field, which meant they couldn't even bring a product to market until the technology had been brought to a certain level of completion.
Development wasn't moving, but development costs were ballooning like an avalanche.
In the end, they decided that for stable research and development, they'd have to sell the entire company and secure financial backing that way.
That was when Facenote stepped in as the bidder.
LinkLabs was worth roughly $10 billion to $15 billion.
Goldenberg's offer was $22 billion to buy out the founders' and investors' shares, plus another $18 billion in working capital for the company, bringing the total to $40 billion.
That was how highly he valued LinkLabs' BCI technology—and its future market potential. And his judgment was right.
Either way, with Facenote now out of the picture, all we had to do was take it from here.
“Tell them we can trim the acquisition price a bit, but there's no reason to cut the additional development budget. Say we'll keep supporting it steadily through Snow Crash. No matter what, we have to get this deal done.”
David nodded at my words.
“Understood.”
I headed to a pub near the office.
It was still early, so there were hardly any customers, and Tommy was wiping glasses with a dry cloth behind the counter.
We'd seen each other a few times by then, so he greeted me warmly.
“Hey, Miru! What brings you in this early?”
“I got off work early today.”
He didn't know I was co-CEO of Continue Capital. To him, I was just some employee on temporary assignment in the States after working in Korea.
I leaned against the bar counter.
“I'll have a beer.”
The large TV on the wall happened to be airing Facenote news. Not that it was much of a coincidence—these days, if you turned on the news, that was all anyone talked about.
Tommy pointed at the screen.
“See that? They say Trish's article is what got the hearing started.”
“Yeah.”
No one had watched it more closely than I had.
“I never knew Facenote was full of people that awful. What a disappointment.”
“So you're going to quit Facenote?”
Tommy shook his head.
“Nah, can't do that.”
“Why not?”
“Because all my friends are there.”
I laughed under my breath.
Facenote had everyone, because everyone was already there.
As long as his friends kept using Facenote, he had no real choice but to use it too. That was why, no matter how big a crisis Facenote faced, there was always a reason it would never truly die.
I was drinking alone when a woman came hurrying over.
“Have you been waiting long?”
She didn't need to rush like that.
Tommy slid over the beer and joked, “Oh! A famous reporter came to our place? We're honored. It's only a small thing, but this one's on the house.”
“Hm, thanks for recognizing me. I'll enjoy it.”
I asked her, “How was Washington, D.C.?”
“Fine. Round trip in economy, of course. Our company policy is economy class only.”
“How was Senator Phillips?”
“He was wonderful when I met him. He said he'd read my investigative piece. He told me it was brilliantly written. He was really generous with the praise. Hehe!”
“Well, it was well written.”
Her Facenote investigation had drawn an enormous number of views and was cited by media outlets all over the world.
Thanks to that, the reputation of WST and O'Connor the reporter had only grown stronger.
I thought back to my first life.
Back then I was working as an analyst, so of course I'd read the WSJ investigation. In fact, I'd used that memory to write my in-house report in the first place.
I couldn't remember every detail, but the article Trish had written this time felt far better than the WSJ piece.
I clinked my glass against hers.
“You worked hard.”
“So did you. Oh! The privacy hacking case Senator Phillips brought up at the end—was that something you tipped him off about?”
I put on a blank expression.
“Why would you think that?”
“Who else would pull something like that if not you?”
“......”
What kind of image did she have of me?
I answered honestly.
“That's right.”
Facenote's privacy leaks were nothing new.
There had already been more than ten confirmed cases. There were probably many more that had never come to light. And every time one of those leaks happened, the company never even bothered to properly notify the people affected.
Right around this time, another privacy hacking incident had broken out. The public wouldn't hear about it until much later, but it had already happened.
The stolen personal data was being traded through the dark web, a place ordinary people couldn't access.
Syd had once dealt with hackers there, so it was easy for him to track down the Facenote leak. I reported it directly to the FBI.
Law enforcement agencies were always short on manpower and buried in work, so even when they became aware of a crime, it usually took them a long time to turn that awareness into an actual investigation.
But when the tip came from me, that was a different story.
If things went sour, I could always make their Mona App hacking tools unusable.
The FBI moved immediately.
Since the leaked data was already being traded through Mona App, they arrested the hacker ring on the spot.
And then they handed that material over to Senator Phillips.
“You thought whistleblowing alone wouldn't be enough?”
“Already exposed bad news isn't really bad news, is it?”
I thought of Mike Goldenberg at Facenote's headquarters.
Just from a brief conversation, it had been obvious he wasn't an ordinary man. Someone like that wouldn't have appeared at a hearing without preparing a counterattack.
Of course he'd have rehearsed answers to the obvious questions and quietly lined up a few lawmakers in advance.
Sure enough, he slipped past the sharpest questions with ease and, by the afternoon, even turned the tables by bringing up short sellers and whistleblowers.
“If he'd handled it badly, people might have started doubting the whistleblower's credibility.”
That was the exact part I had been most worried about.
That's why I'd prepared evidence in advance and even visited Facenote in person before opening the short position.
I hadn't expected to run into Mike Goldenberg there myself, though.
If the hearing had ended there, public opinion would probably have drifted toward suspicion of collusion between short sellers, whistleblowers, and WST.
But when the privacy hacking issue came up at the very end, Goldenberg failed to respond properly.
That wasn't surprising. After all, not only had 150 million people's personal data been leaked—he'd tried to hide it too.
Once you'd committed a crime like that, blaming whistleblowers and short sellers was absurd.
People tend to believe that if one side is right, the other side must be wrong.
As a result, Goldenberg's remarks lost all force, while the whistleblower's claims gained a great deal of credibility.
“What do you think will happen to Facenote now?”
I thought about it for a moment, then said, “It'll probably be rough.”
Whistleblowing aside, data collection and algorithmic bias were Facenote's fundamental problems.
Fixing them would mean completely changing the business model.
Revenue and profits would stagnate after that, and the company would struggle for a while... until the metaverse era arrived and LinkLabs' BCI technology went commercial, sending it soaring.
They had failed to connect the world, but succeeded in connecting the human brain and the computer.
Facenote's core business had shifted from social networking to BCI hardware manufacturing, and that sent its stock soaring several times over.
But this time they were going to fail to acquire LinkLabs, so the outlook was bleak.
“You're a real famous reporter now. At this rate, are you going to win a Pulitzer?”
“Are you teasing me?”
“Of course not.”
Until now, I'd mostly been feeding her information and guiding her, and she'd written her pieces from that. But this time she'd taken a tip and gone out into the field herself.
She must have felt a very different kind of accomplishment.
“Now that the investigation's over, you can finally rest a bit.”
Trish shook her head.
“There's still a follow-up piece to write. And I have to keep watching whether Facenote keeps moving in the right direction. That's what a journalist is supposed to do.”
“Oh, that's impressive.”
She had looked every bit the rookie when we first met, but now she was a proper reporter.
Seeing how far she'd come somehow made me proud too.