FB Stock Might Suffer from Overexposure
Adding to a recent string of bad press is a new report that shows Facebook Inc (NASDAQ:FB) built a tool to help the Chinese government monitor and filter unfavorable content. Some analysts are worried that this much time in the spotlight could burn FB stock.
CEO Mark Zuckerberg has been making trips to China for years now, and he even learned Mandarin to impress Chinese officials. But that’s not all the young billionaire has been up to.
Zuckerberg also commissioned a new tool which can block specific content in specific geographical areas. This would mean that earmarked posts could be suppressed across an entire city, province, or country. (Source: “Facebook Said to Create Censorship Tool to Get Back Into China,” The New York Times, November 22, 2016.)
Facebook doesn’t intend to use this tool itself, but anonymous sources say it was designed to gain China’s approval. The country’s 1.35 billion people is enough to power Facebook’s subscriber growth for the next decade, making it a cornerstone of the company’s long-term strategy.
Sources say the tool could be outsourced to a third party in China, potentially giving that entity the power to track and censor specific pieces of content. It is important to note that censorship would only work on the timelines of anyone inside the country.
While this report will likely garner a lot of attention, it is not the first time FB stock has been in the news for suppressing content. The company also restricted access to certain posts in Pakistan, Russia, and Turkey. Here’s a more specific rundown from the report:
“Facebook blocked roughly 55,000 pieces of content in about 20 countries between July 2015 and December 2015, for example. But the new feature takes that a step further by preventing content from appearing in feeds in China in the first place.” (Source: Ibid.)
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Aside from the fact that suppressing content goes against Facebook’s mission statement “to make the world more open and connected,” FB stock is already dealing with fallout from fake news “virality” and faulty advertising metrics. It is unclear how many more hits the Facebook brand can take.
“We have long said that we are interested in China, and are spending time understanding and learning more about the country,” said a Facebook spokeswoman in response to the report. She added that Facebook had not settled on its China strategy, so the new tool may not be realized.