Facebook Tries to Wake up from Its Worst Nightmare after the Scandal of Data Leak

Facebook Tries to Wake up from Its Worst Nightmare after the Scandal of Data Leak




The Facebook scandal shows the false unhelpfulness of social networks: the data is your price.

The multiple but delayed explanations were given by Facebook before the nightmare generated by the data leakage of millions of users have not prevented the firm from closing the week with a serious deterioration in its image and a sharp drop in its stock market value. 

"Sometimes, and I would say that certainly last week, we spoke very slowly," said the firm's chief operating officer, Sheryl Sandberg, when she acknowledged this week a series of errors that triggered the worst Facebook crisis since its creation, in 2004.

The facts were unleashed by admitting the signature on March 16 that it was analyzing reports that the British consultancy Cambridge Analytica had data on 50 million users that had been collected in 2013 before Facebook imposed new measures in 2015 to guarantee its Privacy. 

While Facebook's values plummeted, dragging along other major Wall Street technology firms, the company's most visible co-founder and figure, Mark Zuckerberg, was silent about the scandal. 

It was not until Wednesday when Zuckerberg came to the step, with a text of 937 words placed from his Facebook platform in which he announced a series of measures to avoid similar problems while recognizing the errors. "We have a responsibility to protect your data and, if we cannot, then we do not deserve to be at your service," Zuckerberg said.

Drop in stock market

The top executive of the firm continued giving explanations in interviews to different media, to which Sandberg joined, but this did not prevent that, at the end of this week, Facebook has fallen 13.9% in terms of the value of its shares.

That decline has caused Facebook to lose about 68,000 million dollars of market value, a sum equivalent to the one that the company had in 2012 when it debuted on the stock market. 

Facebook and advertising

The economic implications go further because, as reported by The Wall Street Journal (WSJ) on Saturday.) Citing industry sources, many advertising agencies are rethinking their relationship with Facebook, one of its main platforms.

Only in the United States, Facebook is the showcase of 20% of the advertising that is placed on digital platforms, which represents a market of 463,000 million dollars.

It is only exceeded by Google, which accounts for 37% of that advertising.

The sector fears that, as a result of this controversy, the authorities fix greater regulations in a sector that advances faster than the laws, which could limit the capacity of advertisers to address certain audiences. 

"If advertisers are suddenly unable to target certain segments due to regulations (...), this could pose challenges because advertisers will see other options" other than Facebook, says the manager of the firm Reprise James Douiglas. 

Aware of this, Facebook has intensified in recent days its efforts with advertisers to calm the waters and offer guarantees that the own data that the advertising firms place in this network to address their audience are kept in reserve.

Your image, damaged

But the damage is not only economic but also image towards a brand that has dominated that segment of social networks for more than a decade, although current trends, according to experts, indicate that it is losing weight among adolescents, which it darkens the future growth of the company.

As Facebook's problems were known, a trend began to emerge in social networks for users to be erased from that platform, with the hashtag #deletefacebook, to which figures such as the co-founder of the WhatsApp app have added Brian Acton and the top executive of Tesla, Elon Musk, who withdrew their brands from that platform.

In addition, members of the US Congress sent a letter to Zuckerberg this Friday in which they anticipate the possibility of declaring before the legislators "in the near future".

And, as noted by the WSJ in the editorial of its weekend edition, "Facebook has not matured as fast as it has grown and its recent problems show that it needs to exercise greater control over content and advertising." "If not, politicians will have to do it," says the newspaper.


Source : https://www.digitalinformationworld.com/2018/04/facebook-tries-to-wake-up-from-its-worst-nightmare.html

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