Tag Archives: Facebook

Soc-Media Giants Looking for Clues From Biden Team

The US presidency may have shifted parties, but social media giants Google, Facebook and Twitter are in a wait-and-see pattern vis-à-vis President Biden’s approach to the social media sector .

At home, all three platforms have come under fire in recent years for allegedly violating federal antitrust statutes. In December, the Federal Trade Commission filed suit for what the Commission called “a years-long course of anticompetitive conduct.” That followed a trifecta of antitrust cases filed against Google.

The companies have also run into trouble in recent months on the socio-cultural stage, with social and political conservatives accusing the platforms of censoring conservative voices, and progressives arguing that the lack of oversight has facilitated the spread of disinformation and fake news.

Here, too, the battle is likely to play out in court: Parler, a Twitter-like platform favored by many conservatives that have been banned by Twitter,  sued Amazon after the latter’s Amazon Web Services announced it would cut service to Parler.

In the international arena, too, the social media giants are facing unprecedented scrutiny and legal challenges. In Brussels, the European Commission has opened an investigation into Google’s advertising practices, while in Australia the company is embroiled in a political fight with Canberra  over paying for news articles that appear in the company’s search results.

Facebook Bans Suspicious Accounts

Following the banning of 32 accounts in late July with suspected connections to Russia, Facebook removed an additional 652 accounts, groups and pages that it identified as exhibiting “coordinated inauthentic behavior.” That behavior included the sharing of political material.

The banned accounts were linked not only to Russia, but what was a surprise, also to Iran.
The 32 accounts banned in July were generally engaged in efforts to influence the up and coming November mid-term elections. The 632 additional fake accounts were focused more on influencing US foreign policy, and regional politics in the Middle East.

Facebook is not the only internet site where foreign entities go to influence the US voting public. Twitter suspended 284 accounts for “coordinated manipulation,” with many of those accounts sourced to Iran. Microsoft announced they saw a new Russian practice to copy conservative US websites, perhaps as a component of a spy campaign.

“There’s a lot we don’t know yet,” CEO Mark Zuckerberg said.

“You’re going to see people try to abuse the services in every way possible … including now nation states,” he said. He described the deception campaigns as “sophisticated and well-funded efforts that aren’t going to stop.”

Defunct Cambridge Analytica Under Investigation by Justice and CIA

The New York Times is reporting that the FBI and the US Justice Department are investigating the out-of-business political data company Cambridge Analytica. The company was recently implicated in a scandal over how it used the information it mined from Facebook users, bringing into question any ties it may have had with Russian agents engaged in meddling in the US elections.

Prosecutors from the US government have been questioning former employees and banks associated with Cambridge Analytica, said the Times, citing an American official and others familiar with the investigation.

The company already announced its intention to close by the end of this month since it lost many clients and faced growing legal fees as a result of reports that the company had taken personal data about millions of Facebook users without their knowledge, as far back as 2014.

The company is being accused of using the data of about 87 million Facebook users improperly. Cambridge Analytica was hired by the now President Trump’s 2016 election campaign. As a result several investigation were launched in the US and also in Europe.

Successful Social Media Giants Fail in Profitability

Despite the importance and influence social media sites have had on the way we journey through the world, as businesses, they are almost universally failures.

Yelp was founded in 2004, and went public in 2012, boosted by the millions of people who were using the site to rate local businesses and read those ratings. Prior to the IPO the company raised $56 million in venture capital investments. The IPO brought in an additional $107 million. Still not able to switch to black ink after all this time, a secondary stock offering raised $250 million. Yet, profitability remained an elusive dream.

Before we judge Yelp to harshly, this is a good moment to point out that profitability for social media sites is the exception and not the rule. Today there are only two such online platforms that can be said to make money rather than lose it. Those two are Facebook, which took years to reach profit-making status, and LinkedIn, which has a paid pro subscription, making it less dependent on advertising. You will be looking long and hard to find another social media company that is in this exclusive club. Not YouTube. Not Twitter. And not Yelp.

Now Yelp is looking for a buyer. But its prospects are not good. This is a quote from the company’s annual report:

“We expect that our revenue growth rate will decline as a result of a variety of factors, including the maturation of our business and the gradual decline in the number of major geographic markets, especially within the United States, to which we have not already expanded.”

Over its lifetime Yelp has raised a total of about $400 million from investors. The company has a market value of $3.51 billion, and in 2014 they did manage to eke out a profit for the first time in their history. Over its lifetime, however, Yelp has reported a total of $34 million in losses.

Who will buy this company is yet to be seen. If they do, it will be not as a source of income, at least not soon, but as a way to provide this service to its otherwise loyal customers.

Facebook’s Instagram Beginning Ad Placement Outside US

 

Ads Coming to Instagram
Ads Coming to Instagram

Facebook’s mobile photo service, Instagram will be expanding is new advertising business to countries outside the United States.

The plan is to first show ads to users in Australia, Britain and Canada later this year by working with just a small number of advertisers in each of those countries.

Facebook has already begun placing ads in Instagram inside the US, beginning last November with brands like Levi’s and Ben and Jerry’s ice cream. Instagram announced that the ads within the US have, in some cases yielded results “well above the ad industry’s average for performance.”

Instagram has over 200 million users, and is therefore expected to be an excellent source of advertising revenue for Facebook, which purchased the mobile photo service in 2012 for $1 billion. Seeking to calm investor expectations of a quick revenue uptick, Facebook CEO Sheryl Sandberg said that the company was going to roll out their ad program on Instagram at a moderate pace.

“We don’t see the need or the urge to ramp this as quickly as we possibly can,” Sandberg said.