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Facebook was founded 14 years ago in a dorm room of a Harvard student. Today it has over 2.5 billion active users. That is nearly half of all the adults on earth. The kind of power and influence of social media is unprecedented to the human race. We have never dealt with anything like this before and we are learning as we go. That applies to the regulators, the users and the social media organisations. What makes it even more complicated is that social media sites have no borders. This is a truly global phenomenon.
2020 has been a crazy year so far. To top it all off we have the US elections in November. Debate, traffic and content on social media has never been more rife. Last week Facebook was boycotted by some big brands because of their lack of monitoring fake news, hate speech and election campaigning.
These brands include Unilever, Patagonia, Coca-Cola and Verizon. As the big names started rolling in, Facebook share dropped 8% on Friday.
From a business perspective it must be noted that many of these big names are staying on Instagram, which is of course Facebook owned. Over 75% of Facebook revenue actually comes from SMEs who have benefitted massively from targeted advertising. A few big names boycotting the platform briefly is not going to crush the company. But the rhetoric is bad and users may start feeling despondent.
The irony of it all (in my opinion) is that if Facebook starts monitoring what people can and cannot say, it actually gives them more power. And that is exactly what Zuckerberg is trying to avoid. If Facebook decides what people can and cannot see, they could literally move the world in certain directions if they wanted to. That is why free speech is so important in a democratic society.
Facebook has reacted to try and keep everyone happy, here was Mark Zuckerberg's post with the extra measures being implemented. You can decide for yourself whether you think that is "enough".
As an investment I still believe Facebook is a fabulous business to own. They provide SMEs amazing platforms and soon you can buy their goods directly off the site. 2020 is a melting pot of politicising masks, elections, activist campaigns and very controversial public figures. That too shall pass and we believe Facebook will continue growing as they navigate their way through unprecedented responsibilities.
