The shares plummeted 4.89% on wednesday to $326.23 a share till it closed for day’s trading, widening its losses since mid-September after Facebook outage and whistleblower’s remarks
Nothing seems well for Facebook for the past few days. The social media giant was already under the scanner for allegations of prioritizing profits over users’ safety when it crashed for one of the longest periods in history 2 days ago.
Not only Facebook but both Instagram and WhatsApp blacked out till today morning in India due to the reported internal issues. The combined effect of the three most used social media apps crashing down has impacted billions of users worldwide at large.
Downdetector, a website monitoring internet issues, has said that it was the largest outage witnessed by Facebook and its sister platforms, with over 10.6 million reports worldwide. The website has reported that the outage lasted for more than six hours, costing billions of dollars of revenue.
The Facebook outage
The over six-hour outage began at around 8.45 pm (IST) yesterday and lasted around 9.30 am (IST) today. According to Downdetector, America had over 1.7 million reports about outages, followed by Germany with 1.3 million reports. The United Kingdom ranked fourth at 789,000 reports. India stood 10th at 285,557 reports in the 25 most-affected country list.
The disruptions of the services were caused by the ‘faulty configuration changes in the backbone routers’, according to the Facebook Inc statement. “The configuration changes on the backbone routers that coordinate network traffic between our data centres caused issues that interrupted this communication. This disruption to network traffic had a cascading effect on the way our data centres communicate, bringing our services to a halt,” the statement read. The outage also stopped communication between the minister and government officials across the globe.
Notably, the statement is very cautiously written while it does not rule out the company’s role in preventing the outage. They have mentioned an internal glitch as the reason while the span of the outage pointed blankly at their mismanagement and inability to tackle technical issues. Agreeing with James Clayton’s (a North American tech reporter) analysis, Facebook needs to find a quick remedy for their internal tool.
Facebook economic loss
The week started badly for Facebook with the Wall Street Journal’s investigative series on their product policy. The occurrence of the outage has worsened things for Zuckerberg. It happened just a day before the whistleblower’s hearing and a day after her interview was aired on television. To note, it is just Tuesday today.
According to the NetBlocks report, the cost of the outage affecting the flagship products of Facebook Inc. pegged at over an hour wrote off $160 million from the global economy. The estimated dent in the global economy due to the more than six hours outage was over $1 billion. The Cost Of Shutdown Tool (COST) measured the loss due to an internet disruption using specific indicators, including data from World Bank and the International Telecommunication Union.
The shares tumbled right after it opened on Monday due to former employee Haugen revealing the company’s ignorance about the effect of their content on the users. The loss widened in the wake of the outage. The shares plummeted 4.89% to $326.23 a share today till trading closed for the day. The loss added a drop of about 15% since the September mid. The company witnessed $40 billion wiped out in market capitalization.
However, the outage has led to a rise in Signal and telegram users. Signal app stocks listed in OTC Markets recorded gains of about 2.33% today.
The plummeting stock of Facebook Inc. has wiped off Mark Zuckerberg’s $6 billion to $7 billion in few hours. His net worth now shredded around $121.6 billion. According to the Bloomberg Index of Billionaires, Zuckerberg is down from around $140 billion in just a few weeks.
Facebook Product Policy
According to the Wall Street Journal, former employee Frances Haugen has gathered a series of data about the social media giant’s product policy of prioritizing profit to help the company to take prompt steps than stirring anger towards their policies.
According to Haugen, the company has never paid heed to its own research about how the website content magnifies hate and the spread of misinformation. Sister photo-sharing app is too accused of causing mental trauma in teenage girls.
Haugen’s statements hinted at prioritizing protecting the economic interest of the company. The fallible reason for these can be the mammoth cost incurred during setting and upgrading the safety protocols, which outnumbers the profit earned from expanding to new local language content as the number of users become smaller and stagnant.
Facebook net income earned during the second quarter of 2021 stood at $10,394 million, a quarter-on-quarter rise from $9,497 million in Q1 in 2021. The net income has almost doubled on year. The net income soared from $5,178 million earned in the second quarter in 2020, according to the data reported by Statista. Net income is called net profit, representing the net amount of profit earned after subtracting all the expenses and costs from revenue.
She said that techie had ‘prematurely’ switched off safeguards designed to discard misinformation and rabble-rousing after Joe Biden’s win last year. As per the interview published by WSJ, switching off safeguards contributed to the deadly siege of the US capital on January 6.
After the election, it had dissolved the civic integrity unit where Haugen was working before quitting the company on April 2021. The algorithms govern what show’s up in the user news feed and how they react to hateful content. Someone has rightly said that humans are prone to anger than any other emotion. Therefore, how can Facebook be at fault as it simply follows an accepted universal truth at the cost of safety?
Facebook-Cambridge Analytica scandal
It is not the first time that the tech giant is accused of slaked user protection policy. The investigation by the Information Commissioner’s Office (UK) has accused Facebook of breaching the rules of the data protection policy. It has levied 500,000 pounds as a fine, paid after many backs and forths. IOC’s office charged Facebook for failing to protect its user’s data.
This failure has prompted Cambridge Analytica to harvest the raw information and form their database comprising 87 million people worldwide without their consent. The now-defunct company has purportedly used the data to influence the American presidential election and many other polls pan globe. This allegation is now partly substantiated with Haugen’s claim that tech giant data policy has always favoured the rich and influential.
It might have also influenced their journey to a $1 trillion company. The estimates projected its annual revenue to soar around $119 billion this year.
The contents and its effect in India
India is a severely diverse country in content consumption as the natives have a vast set of local languages. Facebook earned around $1.2 billion in revenue in 2020-21 in India, according to The Times of India. The revenue grew by more than 43% in 2019-20. This massive increase in revenue co-relates with the reach of the app in the Indian continent. Even India ranks 10th in the list of 25 most affected countries due to the outage.
The reach penetrated deeper due to Facebook’s expansion in the local language that promotes rekindling connections between the lost souls. But in reality, the local language content has caused visible changes in the Indian decision-making policy. Most youngsters are now viewing politics within the purview of social media. Their idea of national crisis and the role of the political parties in resolving the issue has been muddled with social media doctrine video. For example, the unverified viral video about the Lakhimpur Kheri incident trending on social media will impact youngsters. It does not mean that it is fake. It is just not authenticated.
For example, during the election, the exemption in social media guidelines in India and the slack safety measures of Facebook have prompted people to post decision-changing content during the silencing period. Such algorithms have forced the political parties to hire social media managers during an election campaign to build their image socially.
India has witnessed a major social upheaval due to misinterpretation of Facebook content. For example, a video of a man being thrashed publicly after people falsely accused him as a child kidnapper went viral, thanks to Facebook algorithms. It had prompted several imitation incidents. Indians are exceptionally vulnerable to their emotions than western populations. Facebook, which is allegedly engrossed in profit-making business, has so-called rightfully tapped it for earning revenue.
The photo-sharing app Instagram has openly advocated hate and racist content on several occasions. If in disbelief, one can check any celeb account to spot at least one message urging people to stop posting hate comments or racist remarks. For example, Instagram reels showcasing cheating partners who justify their actions based on race and skin colour.
According to Haugen, In India, Instagram content affects men more. This is because of the lesser number of working women population in the Asian country. Another recent example of promoting anger-inciting content was during the Sushant Singh Rajput death. The Facebook news feed promoted -how seclusion has led to the alleged suicide.
The same topic even re-trended when a television actor Siddharth Shukla died of cardiac arrest. The social media reports were spurring information on rumour rife between the actor and his family members.
Kudos to Facebook and their team!! They have all the credible routes due to unapt Indian law to promote provocative content posted from the personal account during the Babri Masjid verdict. Such contents have created a palpable atmosphere in the country