Welcome to the Raka Weekly Roundup, where we cover the week’s news and trends and tell you exactly what you need to know. This week, we dive into major players Facebook and Google losing billions of dollars and the ramifications of that loss for the digital landscape.
Facebook loses billions
It’s common knowledge Facebook has not had many “Likes” as of late. Between its involvement with Russia interfering with the presidential election, the security breach with Cambridge Analytica, and now plummeting stocks with revenue growth to follow suit, things aren’t looking good for the biggest social media platform in the world.
Facebook’s official loss in value due to this latest debacle is slightly north of $123 billion, $17 billion coming right out of CEO Mark Zuckerberg’s wallet.
But what does that mean for the company?
It’s too early to tell if this downward spiral will continue, but if we were to pull out a crystal ball, or even a Magic Eight Ball for that matter, the forecast would probably be outlook not good.
Of course, Facebook is trying to paint its own narrative, saying Instagram is the future of the company, but skeptics might not agree, including Facebook’s Chief of Security Alex Stamos.
As reported by Buzzfeed News, Stamos sent a telling memo in March prior to announcing his August departure stating, “We need to build a user experience that conveys honesty and respect, not one optimized to get people to click yes to giving us more access.”
“We need to listen to people (including internally) when they tell us a feature is creepy or point out a negative impact we are having in the world. We need to deprioritize short-term growth and revenue and to explain to Wall Street why that is ok. We need to be willing to pick sides when there are clear moral or humanitarian issues. And we need to be open, honest and transparent about our challenges and what we are doing to fix them.”
His words are telling to all those listening, except maybe Mark Zuckerberg. Only time will tell if they will be able to recoup the users, trust, and money they’ve lost over the last several months. If we are to believe what our Magic Eight Ball is telling us, don’t count on it.
Google loses $5.1 billion in an antitrust suit
This next story actually happened on July 18, but we thought it was worth mentioning alongside Facebook’s troubles. It’s tough out there for tech giants.
European authorities fined Google a record $5.1 billion for abusing its power in the mobile phone market by favoring its own services in internet search results. According to the NY Times, Android software is used in 80 percent of the world’s smartphones and Margrethe Vestager, Europe’s antitrust chief, claims Google has used the software to “cement the dominance of its search engine” and essentially block rivals from competing in this space.
Google has 90 days to take action to remedy this situation, but they are also appealing the decision so it could drag on for years. While we all wait for the outcome, the fine will be sitting in an account and most likely be forgotten about by both Google and the rest of the world as we await the next breaking news about a mega company making questionable decisions with catastrophic results.
This week we’ve seen two major players in the digital marketing arena lose billions of dollars due to what some (or many) would call unethical tactics. However, the question remains, is this financial hit enough for either of them to step up and make real changes?
In the words of the immortal Magic Eight Ball, I think we all hope signs point to yes, but realistically, we cannot predict now.
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