Facebook Inc (US)

Facebook has become one of the definitive icons of the modern digital age, a virtual embodiment of the human potential of the internet as a tool for interpersonal communication and information sharing. It is also something of a fairy tale in which a computer nerd with limited interpersonal skills of his own became one of the world's richest individuals before he was 30 by ruthlessly pursuing his own vision and then cashing in with what was then the biggest technology IPO of all-time. In this fairy tale, Facebook's creator and CEO Mark Zuckerberg is arguably the hero and the villain combined, certainly according to his many detractors, and for a while it was far from clear yet just how happy the ending of this story would be. Even with its vast audience, which first topped 1bn monthly active users in Oct 2012, Facebook's ability to justify its sky-high $100bn-plus valuation seemed untested, and there were distinct wobbles in the first months following the site's IPO, not least after the company paid $1bn to buy Instagram, a service with virtually no revenues. Yet Facebook has gradually won over most sceptics (despite the even more astronomical $22bn purchase of Whatsapp). It managed to accumulate an extraordinary #2 position in mobile advertising (behind Google) in little more than a year, and its overall sales growth appears to justify all those original expectations. Revenues for 2017 soared by almost 50% to $40.6bn, while net income was almost $19bn. The number of daily active users surpassed 2 billion people for the first time in June 2017; 1.4bn use the site on a daily basis. Adbrands does not currently offer a business profile for this company but subscribers may access account assignments and contact information. The searchable account assignments database is available to full subscribers to Adbrands.net premium services. Click here to access Adbrands account assignments (subscribers only); or see here for information on how to subscribe.

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Capsule checked 28th June 2017

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 3rd May 2018: The biggest news from Facebook's first F8 developer conference was the revelation that the social media giant is to launch a new dating service aimed at the 200m or so users who currently identify themselves as "single" on their profiles. "This is for building real long-term relationships, not just hookups," said CEO Mark Zuckerberg. It's certainly an unexpected development considering Facebook's current issues with privacy. "We're surprised at the timing, given the amount of personal and sensitive data that comes with this territory," said Mandy Ginsberg, CEO of leading dating site operator Match.com, which also owns Tinder and OKcupid. "We understand this category better than anyone. Facebook's entry will only be invigorating to all of us," said her boss Joey Levin, CEO of parent group IAC. "Their product could be great for US-Russia relationships," he added in a dig at the allegations that Russian agents used Facebook to spread electoral discord during the recent Presidential election. Yet jokes aside, the news sent a chill wind through Match.com and IAC investors. Match.com's shares plunged by 22% in the wake of Facebook's announcement, and IAC was down 17%.

Adbrands Weekly Update 26th Apr 2018: Not to be outdone by Alphabet, Facebook reported even more spectacular growth. Performance for 1Q reached new highs, with revenues up 50% year-on-year to just under $12.0bn - the group's second highest result after 4Q 2017 - while net income soared by 63% to almost $5.0bn. Total users rose to 2.2bn. The company said it had seen no "meaningful" impact from the Cambridge Analytica scandal, which broke towards the very end of 1Q. However, CEO Mark Zuckerberg repeated his pledge to safeguard the privacy of Facebook users. "We are taking a broader view of our responsibility and investing to make sure our tools are used for good. And we also need to keep moving forward, building new tools to help people connect, build community and bring the world closer together." 

Adbrands Weekly Update 5th Apr 2018: Facebook updated the public on the results of its investigation into data harvesting by Cambridge Analytica. It disclosed that the number of users whose personal information was accessed was far higher than the 50m previously estimated, and could be as many as 87m worldwide, including almost 71m in the US. More than 1m users in each of three other countries - the Philippines, Indonesia and the UK - were also harvested, as well as between 300,000 and 715,000 in Mexico, Canada, India, Brazil, Vietnam and Australia. Facebook said it has made a number of changes to improve user privacy and restrict access by third-parties to data collected on the site. However, CEO Mark Zuckerberg said it will require a "multiyear effort" to resolve all Facebook's security and content issues. He has agreed to appear before two US Senate committees next week to discuss social media and abuse of user data.

Adbrands Weekly Update 22nd Mar 2018: Facebook came under renewed attack from lawmakers and regulators in the US and UK over protection of its users' personal data. It is already struggling with the fallout from revelations that Russian agencies used the site to manipulate voters during the Trump election. Now, a joint report from the UK's Observer newspaper and the New York Times, published last weekend, revealed that personal information was harvested for some 50m Facebook users by Cambridge Analytica, the secretive far-right political research firm co-founded by former Trump advisor Stephen Bannon. According to the Observer and NY Times, in 2014 an independent researcher working for Cambridge Analytica offered US-based Facebook users small sums of cash to take an online personality quiz and download an app, which then scraped private information from their profiles and from those of their friends. The researcher told participants the data would be used purely for academic research. Instead it was passed on to CA, where it was used for "psychographic modelling", providing the platform for a massive political ad-targeting campaign in support of conservative lobbyists and subsequently the Trump presidential campaign. The situation has reignited the debate about how Facebook's vast data resources can be manipulated and exploited by "bad actors" for inappropriate purposes.

When the news broke last Saturday, Facebook initially denied any responsibility, arguing via a company blog post that, legally speaking, there had been no data breach since the information was extracted with the permission of its users, albeit under entirely false pretences. Rather than acknowledge the seriousness of the problem and work with regulators to resolve it, the social media giant also significantly damaged its own case by acting aggressively to try to stop publication of the Observer's report with threats of legal action. Adding to public concern was the simultaneous revelation that chief security officer Alex Stamos is to leave the company, not for any missteps in association with Russia or CA, but because of internal disagreements over policy: he had argued for greater transparency over data misuse but was blocked by colleagues and more senior executives. The first overt public response from a senior Facebook executive finally came on Monday from VP, marketing Carolyn Everson. She said she was "outraged and beyond disturbed" by the reports. "If the allegations are true, this is an incredible violation of everything that we stand for." Mark Zuckerberg eventually broke radio silence on Wednesday, five days after the scandal broke, admitting mistakes, and pledging to take further action. "We have a responsibility to protect your data," he said, "and if we can't then we don't deserve to serve you. I've been working to understand exactly what happened and how to make sure this doesn't happen again."

For its part, Cambridge Analytica denies any wrongdoing; it says it was sold data which it didn't at the time realise was from Facebook, and has since deleted it. It says it "did not use any Facebook data for the 2016 Trump campaign". However, the company is now under investigation by regulators in the US and the UK over its use of these and other data. The Facebook report was immediately followed by a separate sting by the UK's Channel 4 News. CA CEO Christopher Nix was covertly filmed telling undercover reporters how bribes and blackmail could be used to entrap political opponents, and also how the company did "all the research, all the data, all the analytics" for the Trump campaign. Nix was suspended by the CA board pending an independent investigation. His claims were denied by Trump's re-election campaign managers.

Adbrands Weekly Update 15th Feb 2018: Unilever CMO Keith Weed - recently named as the World Federation of Advertisers' Global Marketer of the Year 2017 - threw down the gauntlet to the social media industry, warning that it will reduce advertising on Facebook, YouTube and other such sites unless they do more to combat fake news and divisive content. "We will prioritize investing only in responsible platforms that are committed to creating a positive impact in society," he told an IAB conference in California. "Social media should build social responsibility." He acknowledged that most sites have taken "meaningful" steps towards combating hate-based content over the past year, but that more needs to be done, especially in relation to content that is likely to be seen by children. That view is shared by other major advertisers, not least AT&T which has still not returned to YouTube almost a year after it suspended advertising over its proximity to hate-based content. That furore erupted in March last year following an investigation by The Times newspaper in London that revealed that ads from blue-chip advertisers were being displayed regularly alongside extremist videos on YouTube and on the websites of neo-nazi, homophobic, Islamic terrorist and other hate groups. Separately, this week, Facebook began testing a new "downvote" option - the closest it is ever likely to get to a "dislike" button - in which users can mark content or comments as "offensive", "misleading" or "off topic".

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