For years Facebook stock has been a must own. The company enjoyed constant growth, regular user engagement and ad revenues that grew even with scandals tied to user data and fake news. But investors should be starting to worry a little.
But Facebook’s reign as social media king is increasingly under threat from competitors such as ByteDance’s TikTok and even Apple. The company’s innovations in virtual reality and smart glasses will never replicate the success of its ad business.
For instance, at the heart of two pending EU and UK laws governing online safety are requirements that social media companies such as Facebook adjust their systems to stop algorithms from propagating harmful content. In other words, it may not be enough for the company to take down posts of revenge porn and hate speech in an endless game of whack-a-mole. It may instead have to rewrite the algorithms so that such content does not make it into newsfeeds in the first place.
Gretchen Peters, who runs an organisation that tracks crime and terror activity on social media, has been lobbying the justice department to investigate if Facebook’s hosting of criminal content rises to the level of a Rico violation, referring to a law that was designed to help prosecute organised crime. A probe is not certain, however.