Facebook and Twitter: Will fake news and privacy scandals reflect in earnings?

This week will see earnings from social media giants, Facebook and Twitter, both of whom remain under fire for their abilities to handle the spread of false information on their respective platforms.

If it wasn’t bad enough that Facebook was linked to Russians trying to sway the previous US election or that they sold data to unfavourable third-parties. Last week, CEO, Mark Zuckerberg claimed posts from Holocaust deniers should be allowed on Facebook.

Meanwhile, Twitter has also seen its fair share of public relations disaster, most commonly revolving around their issue with spam accounts.

Earlier this month, news of Twitter heightening their efforts to crack down on fake accounts saw a 9% drop in their share price.

Twitter argued that this reaction was overblown claiming that this move wouldn’t affect its numbers of monthly active users.

As a whole, over the last three months, Twitter shares have increaded by 39%.


Speaking about Facebook, Jessica Liu, Senior Analyst at Forrester, said: “The industry will be scrutinising user numbers now that the Cambridge Analytica issue has had 3 months to percolate.”

“But as stated in our Forrester blog post in April, we don’t feel users will mass exodus Facebook. Users change behaviours really slowly.”

>See also: Facebook: Hopes for tougher questioning over ‘shadow profiles’

“People have learned to be sceptical of what they see online. And for developing countries, Facebook Free Basics is a portal to the internet.”

“It’s easy to lose sight of Facebook’s usage beyond North America but important to view the entire global picture when discussing Facebook Inc. as a whole.”

“Likewise, the industry will wonder if any potential drop in users will have caused a drop in revenue. In that same blog post, we stated that advertisers wouldn’t mass exodus either.”

“Brands want to reach and will continue to spend on Facebook to get it. And, Facebook’s family of Instagram, Messenger, and WhatsApp is alive and well.”

>See also: Digital uprising: Delete Facebook movement gains traction in UK

“Instagram, in particular, is a strong player in brands’ social marketing plans.”

For Twitter, given how their shares have increased over the previous months, they will face pressure to back up this with strong numbers.

Twitter is hoping that their commitment to introducing new features will have made the platform more engaging. Their video advertising options are also a predicted source of significant growth.

>See also:  How social networks can contribute to a booming economy 

According to MarketWatch, Macquarie Capital analyst Benjamin Schachter wrote in a note to clients, recently, saying that the removal of fake accounts were a positive thing, however, his team has concerns about the overall use of the platform.

Schacther said: “We simply don’t see the product improvements having a dramatic impact on TWTR’s ability to attract new users (though it can, and likely is, helping to retain and improve the experience for current users).”

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Andrew Ross

As a reporter with Information Age, Andrew Ross writes articles for technology leaders; helping them manage business critical issues both for today and in the future