Image source: Google
Slower revenue and higher costs in the Q2 earnings for Facebook were cited as the reasons for its recent price drop. In the commentary on CNBC - Timothy Seymour and Ryan Dodd, revealed that while investors believe that their primary capital spending would be on hiring coders and engineers to maintain its platform, Q2 earnings report show otherwise.
Founder and CEO Mark Zuckerberg instead emphasized on privacy and security of the platform. It is pretty strange, as cyber security budgets were "typically only a fraction of annual revenue":
Facebook's product is not a "platform for communities." Creating an online community is simply a feature to help cheaply extract more of their core asset: data (specifically, your personal data, including personality traits, habits and activities). We believe the potential for long-term decline in value is at stake because Facebook leadership has not been clear in disclosing this fact to the market.
Source: CNBC - Timothy Seymour and Ryan Dodd.
Facebook's unethical "personal data selling" business model has angered many of its users. Data itself is a growing asset but over the years, Facebook has abused their rights to users agreeing to their unreasonable Terms & Conditions, making stolen personal data legal.
Image source: Flickr - Book Catalog
Facebook continues to face the privacy saga with Cambridge Analytica, where data of UK residents have been harvested. Lawyers representing the UK residents are now threatening to sue Facebook for damages in a class action suit:
It reads like a checklist of Facebook's failures, dating back to its decision in 2009 to no longer allow users to keep their friend lists private. The letter also notes Facebook's decision to let app developers scoop up data not just on their apps' own users but on those users' friends. Facebook didn't put a stop to this practice until 2015.
Source: Bloomberg - Sarah Frier
The violation of UK's Data Protection Act for allowing Cambridge Analytica to collect user data without consent, Facebook would have been issued a fine of $600,000 by the UK Information Commissioner’s Office.
Image source: pixabay - ivanovgood
A lot of covering up has been going on in the past 24 hours to overwhelm news stations with positive news of Facebook. Many positive headlines for Facebook include:
Either Facebook is really pumping up its efforts, or covering up its bad publicity. You decide.
