Facebook Continues Its Decline
Facebook stock was down 2.6% on Tuesday as the headlines about the Cambridge Analytica story swirled. I have a new perspective on the story which I don’t think others have covered. This situation is all about stakeholders in the company. Facebook will have an extremely tough time satisfying stakeholders because almost everyone has a Facebook account and millions of businesses have a presence on the social network with many paying to advertise their products. Facebook is a behemoth that answers to everyone. There is almost no other business like it. Facebook is like the government in that whatever it decides to do will hurt some stakeholders and help others.
Politics Is Hurting Facebook
Facebook is being attacked by politicians. Politicians are advertising clients, they use the website to share their thoughts on public policy (free posts), they are involved with what constitutes free speech on the network, and they can write laws to regulate it. Facebook is being blamed for the 2016 election because the winners used it effectively. I think it’s possible that the losing party will always criticize Facebook for not being fair, regardless of whether it acts objectively fair. This is just like how the moderators of debates get criticized for asking what some consider to be biased questions.
I don’t think Facebook will be able to easily host conversations on political topics and sell advertising on the platform to politicians and political websites without being regulated more. It’s a tough pill to swallow for the company because it has other content besides political posts. It doesn’t want to stop being a place where people can discuss politics because the company has already seen a weakening in original content creation. During the election season, this can be the most discussed topic on the network. It has introduced trending news to rival Twitter because Twitter has the edge on discussions about the latest information.