Greg's Corner

Facebook loses market value over privacy but not in the way you might think

Yesterday, during an earnings call Facebook announced that the company fell short of projected earnings. While Facebook’s revenue grew by 42 percent over the same time last year they fell short of their $13.3 billion projection by ‘only’ making $13.2 billion. That mere $100 million loss caused Facebook stock to dive around 20% and cost the company close to $150 billion in value. One could rightly assume that the market loss had to do with Facebook’s many privacy and security issues since the 2016 Presidential Election, but many analysts say that’s not the case.

Many market analysts say that Facebook’s improvement to privacy and security has caused the loss stating that Facebook can’t make money from privacy. It also doesn’t help that the number of Facebook users has leveled off. While it still holds the lion’s share of social media users in the world many are leaving the platform and Facebook isn’t bringing in new users as many young people becoming new users to social media are foregoing Facebook.

That’s not to say that Facebook is on the verge of bankruptcy by any means. Facebook also owns the widely popular apps of Instagram, WhatsApp, and Messenger, which many end users don’t really consider as being a part of Facebook. As Slate points out if Facebook can survive this year’s election cycle without a major scandal, and that’s a mighty big if, they could be back on the road to profitability. Whether or not Facebook can strike a balance between privacy and profit remains to be seen. It seems that if there was a new social network ready to make Facebook its MySpace, now might be the time to strike.