Facebook caught in a security election Catch-22
Facebook caught in a security election Catch-22
When it comes to dealing with hate speech and intent choice handling, Facebook I just can not win
If he takes a non-intervention attitude, he is guilty of undermining democracy and letting civil society unravel. If he makes the investment necessary to take problems seriously, he frightens his growth-hungry investors.
That dynamic was shown in Facebook's earnings report on Tuesday, when the social network reported a slight loss of revenue but a stronger than expected profit for the period from July to September.
Stocks were volatile in post-day trading - the ones that fell the most, briefly, when executives discussed a decrease in expected revenue growth and increased expenses during the conference call.
With the large number of problems faced by Facebook, that's good news these days. It was definitely an improvement over three months ago, when Facebook shares suffered the worst one-day decline in history, eliminating $ 119 billion of its market value after executives predicted rising expenses to deal with. to security problems along with slowing growth.
"In general, given all the challenges that Facebook has faced this year, this is a decent earnings report," said eMarketer analyst Debra Aho Williamson.
Facebook had 2.27 billion monthly users at the end of the quarter, below the 2.29 billion analysts who expected. Facebook says it changed the way it calculates users, which reduced the total slightly. The company's user base continued to increase 10 percent from the 2,070 million monthly users of the previous year.
The company earned $ 5.14 billion, or $ 1.76 per share, 9 percent more than the $ 4.71 billion, or $ 1.59 per share, a year earlier. Revenues were $ 13.73 billion, an increase of 33 percent, for the period from July to September.
Analysts expected earnings of $ 1.46 per share on revenues of $ 13.77 billion, according to FactSet.
CEO Mark Zuckerberg called 2019 "another year of significant investments" during the call to earnings. After that, he said: "I know we have to make sure that our costs and incomes match better over time."
The company had already warned in the last quarter that its revenue growth will be significantly reduced for at least the rest of this year and that spending will continue to rise as security is spent, hiring more content moderators worldwide and developing their products. They are virtual reality messaging, video or headset applications.
The next day the shares fell by 19 percent. The shares have not only not recovered, but since then they have fallen even more amidst a wider decline in technology stocks.
Investors, users, employees and executives of Facebook have been dealing not only with questions about how much money the company earns and how many people use it, but also its effects on the mental health of users and their concerns about political discourse and elections around the world. world. Is Facebook killing us? Is it killing democracy?
The problems have been relentless for the past two years. Facebook can barely leave one before another appears. It began with "false news" and its effects on the 2016 presidential election (a notion that Zuckerberg initially rejected) and continued with bias claims among conservatives who have not yet given way.
Then there are the hate speech, pirouettes and a massive privacy scandal in which Facebook exposed the data of up to 87 million users to a data mining company, along with the resulting movements towards government regulation of social networks. In the midst of all this, there have been sophisticated attempts by Russia and Iran to interfere with the elections and provoke political discord in the United States.
All this would be more than enough to deal with. But business challenges are also building up. There are stricter privacy regulations in Europe that can prevent the amount of data they collect about users. Facebook and other technology companies face a new "digital tax" in the United Kingdom.
On Tuesday, Arjuna Capital and the New York State Common Retirement Fund submitted a shareholder proposal asking Facebook to publish a report on its policies to control what is published on its platform and explain what it is doing to "address the content that threatens democracy and human rights. " , And the expression freedom ".
"Young users are removing the application and all users are taking breaks from Facebook," said Natasha Lamb, managing partner of Arjuna Capital. "When you start to see users move away from the platform, it's when investors worry."
A recent survey by the Pew Research Center found that more than a quarter of Facebook users in the US. UU They have removed the application from their phones and 42 percent have taken a break for at least a few weeks. Younger users were much more likely to eliminate the application than their previous counterparts.
However, Facebook continues to enjoy a healthy growth of users outside of the US. UU
Facebook shares rose $ 4.07, or 2.8 percent, to $ 150.29 in post-closing trades. The stock had closed at $ 146.22, down 17 percent so far this year.
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