Facebook doesn’t care about fines and scandals when it comes to counting money

The historic fine imposed on the social network, the largest in history for a technology company, has not moved an iota in the upward price of its shares, which continue to hover around the maximum.

Facebook doesnt care about fines and scandals when it comes to counting money

Facebook is still a money-making machine, and if we stick to the data it publishes, it also continues to increase its number of users considerably. And all this despite the privacy scandals that have plagued the social network for more than a year and the fine of 5,000 million dollars agreed by the US Federal Trade Commission (FTC) and the company at the end of last week.

This sanction, the most important promoted in terms of privacy, penalized Facebook for the poor treatment of its users’ data on different occasions, against the backdrop of the Cambridge Analytica scandal, the most important and which opened Pandora’s box in the ‘like’ platform. It remains to be seen how those promoted by the European Union and by individual states in particular end up, but there is no doubt that the blow has been minimal.

To get an idea, the 5,000 million fine is the equivalent of just under 9% of the income that the company had last year, and also has not affected its current accounts. Facebook had already earmarked a similar amount in its spending forecasts this year in the knowledge that this first penalty was coming, so when the FTC upheld the penalty around the same time the company released its second-quarter results, no one was surprised when they returned. to be positive.

In short, Facebook entered 16.9 billion dollars from March to June (28% more than the same date last year), showing that its capacity as an advertising hub continues to be immense thanks to controlling the ads of both Facebook itself and others. Instagram, soon it is expected that also WhatsApp. But it is also that its monthly active users also increased to 2,410 million, 8% more than last year, taking into account the sum of those who use Facebook itself, Whatsapp, Instagram, and Messenger.

This good health in terms of public attraction may perhaps be surprising if we take into account the noise and outrage that its privacy scandals have caused, but we must also consider that while classic Facebook has begun to show its first signs of exhaustion (one of the reasons is purely demographic, there are not many more people in the world with the internet who can open an account), Instagram or WhatsApp are growing at a significant speed and still do not seem to have reached their peak.

However, a clear reference to how little the supposedly negative news affects Facebook is seen in its stock price. In the following graph, you can see from the moment in which the Wall Street Journal leaked that Facebook had accepted the FTC sanction, until July 23 and 24, days in which the agency confirmed the news and Facebook published its results.

As we can see, a saw peak occurs in a matter of days that returns the share values to above 200 dollars, very close to the maximum value of 209 that Facebook signed in July of last year, again after presenting some satisfactory results and with the case of Cambridge Analytica still tremendously hot. Facebook is hovering around its maximum value ($209/share), just like it did in July last year, already mired in privacy scandals

Cambridge Analytica’s own outburst also showed how the company continues to come out strong on news like this on the stock market. As seen in this other graph, after a steep drop, Facebook recovered again in a matter of weeks. In fact, it seems that it is only the bad news, but the ones that Facebook publicly recognizes, and not the ones that come from outside, the ones that most damage its price. It can be seen in the annual chart when, after July, Facebook had to admit several security breaches, and also in the most recent one with the announcement of a new bug in Facebook Kids, the obviously most delicate branch of the platform.

Towards integration, if antitrust lets them

The FTC fine will, however, have a chance for Facebook, although we do not know to what extent it will be fundamental. The company agreed to the creation of a supervisory board for its privacy policies. As they have explained, it would become an independent body that will control “without restrictions” the use that Facebook makes internally of its users’ data. The members will be chosen by several independent organizations and will have special protection if any of the parties wants changes in its members.

In addition to this, Zuckerberg himself also acknowledged in one of his profile posts that the United States Department of Justice has opened an investigation into his company, this time in antitrust policy. Congressmen and organizations in the United States have been suggesting for some time that it would be good to monitor, and even ‘disassemble’ some of the big technology companies to better prevent possible abuses. In the case of Facebook, the investigation would focus on how having a monopoly on the social network of ‘likes’, plus Instagram and Whatsapp can be dangerous.

The implications and how far this investigation and its conclusions go could be vital for Facebook if we take into account its future plans. In January of this year, it was confirmed that the company wants in the medium term to unite Messenger, Whatsapp and Instagram chats so that its users fluctuate. That is, paves the way for integration because a large part of these users, although they use different platforms, are the same.

The Information medium had accessed a few days ago to an internal report of the company that exemplified this situation. It shows the overlap in the use of apps by the same users, showing Facebook as the most ‘cannibalized’ by the rest. It is possible that due to data such as these, Facebook wants to move from a model with several separate platforms to one with a single or very clear interconnection, something that could also facilitate uses such as the distribution of advertising or payment with its future Libra currency.

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Written by Christina d'souza

Proofreader, editor, journalist. I have been doing my favourite thing for more than six years.

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