The Silicon Valley giants are getting knee-capped in the stock market as the premise of users privacy violations pile up on the largest social media firms.
Alphabet’s Google, Facebook and Twitter have all seen shares beaten up over the last two weeks as they all announced user information was not protected and distributed to third-party vendors.
Third-party vendors is code for outfits like Cambridge Analytica, which take demographic data to target political and marketing advertising to users. These data mining firms make 100s of millions of dollars selling this data.
The data is still highly coveted by political campaigns despite the Facebook/Cambridge Analytica scandal in the 2016 presidential election. While outrage at the actions was loud actual legislation was not forthcoming since both parties crave the information.
Google’s breach was so troubling that the company closed down it’s Google+ social media platform. The bigger problem was that Google hid the breach for months in order not to have the government bring further action against the company.
It’s reported that the government’s ears and eyes through the NSA have all the data that was compromised and where it was sold and to whom.
While most of the news coming out about draining the swamp is dealing with career political appointees operating outside the law within government agencies, this data has real-world, actionable ramifications. Public companies have shareholders, who suffer losses as these Silicon Valley firms get involved in partisan politics at the levels inferred by these actions.
I’m not sure the Facebook stock price carnage — slashing $132 billion off market cap — can all be attributed to its missing on the top line in its earnings Wednesday.
Revenue was light compared to what the street expected but Facebook slightly beat on the bottom.
CEO Mark Zuckerberg saw a $16 billion hit on his own stake, despite selling stock on almost a daily basis during the quarter.
No I’m more focused on the chief legal council announcing he would leave the firm before year’s end. The reason appears to be along the lines of wanting to spend more time with the family.
While many believe that Zuckerberg skated by Congress in his testimony over the Cambridge Analytica’s use of FB data in the run up to the 2016 presidential election, I believe there could be a gathering storm for the dear boy with criminal charges being brought for lying to Congress as well as conspiring to sway an election.
I don’t say this on a lark. Sources tell me that after the Congressional August break Zuckerberg may be spending more time in Washington DC than Menlo Park, CA.
If you think about the Facebook/Cambridge Analytica presidential election scandal and the release of 50 million users data (and trust me it is far more than that) it really is quite pedestrian in the grand scheme of things.
Facebook’s data is what people put out on the web either through original writing or more often through liking or sharing a meme placed by a marketing firm to judge sentiment. Continue reading →
Silicon Valley could do nothing wrong for the last decade.
New technology, products, apps and personalities took shares to all-time highs. The FAANG stocks (Facebook, Apple, Amazon, Netflix and Google) forced the Nasdaq to blow past its Internet Bubble highs. (BTW, not a fan of Alphabet rebranding).