Facebook's toughest week yet
Facebook’s resiliency is being tested — again — amid a new firestorm.
What's new: Frances Haugen, the whistleblower who shared thousands of pages of internal Facebook documents with regulators, lawmakers and the Wall Street Journal, testified in front of Congress on Tuesday.
- This follows Monday's massive global outage, which shut down Facebook and its services — Instagram, WhatsApp and Oculus — for hours.
Why it matters: Facebook's scale and ubiquity have helped the company ride out turmoil, with even its stock price rebounding on days like today.
- But this moment appears different because there is now real evidence from Facebook itself that shows it chose to grow at the expense of public well-being — making it potentially easier for lawmakers to demand Facebook reveal its algorithms and metrics as they determine how to regulate the company.
What's at stake...
- Customers: Any changes that Facebook may have to make as a result of future regulation could impact the more than 3.5 billion people who use Facebook, Instagram and WhatsApp monthly, according to the company's latest earnings report.
- Employees: Facebook employed more than 63,000 people as of the end of June. But its ability to retain and recruit staff could be in jeopardy as a result of its choices, Haugen said. It already has the second-highest turnover rate (2.3 years) in Silicon Valley, according to Silicon Valley Business Journal.
- Advertisers: Of the 200 million businesses that are on Facebook, about 5% are advertisers — customers who are starting to have new doubts about what the latest revelations mean to their own businesses.
What to watch: CEO Mark Zuckerberg has been conspicuously mum about the revelations, as has COO Sheryl Sandberg.
- Sen. Richard Blumenthal (D-Conn.) said he wants Zuckerberg to testify: “I think, without any exaggeration, we’re beginning now a different era — I hope it will be different — in holding Big Tech accountable.”