Facebook Roundup: Newsfeed Test End, WhatsApp's EU Woes, MWC

Facebook (NASDAQ:FB) finally admitted that splitting the newsfeed wasn’t such a good idea, a new telecom strategy unraveled at MWC, WhatsApp’s privacy troubles continue in the EU.

Facebook Ends Newsfeed Test

Facebook admitted that it was a mistake to use two separate newsfeeds, one coming from friends and family and another from Pages. The test (and simultaneous surveys) showed that this didn’t really help people to connect with their contacts. As a result, Facebook ended the test, which it was carrying out in six countries. It says that its earlier decision to prioritize posts from friends and family more closely addressed user demand, so that was the way it would go.

Other Facebook News-

-WhatsApp’s unilateral decision to start sharing users' phone numbers and other information with Facebook was objected to by the EU, which had consented to its acquisition of the company on the understanding that such sharing wouldn’t take place. The Irish data protection authority (Facebook is headquartered in Ireland) has said that it is up to Facebook to determine/devise a credible process to legitimize the processing and the company hadn’t been forthcoming. In her words: "In fact WhatsApp reconfirmed with us recently that moving into GDPR in May, it would continue to observe the pause on processing of data for these purposes." Privacy has been a concern for American technology companies in the EU, with Facebook and Alphabet (NASDAQ:GOOGL) being the worst affected.

-The Munich prosecutors' office has decided not to initiate a formal investigation against Mark Zuckerberg, Sheryl Sandburg and eight others against whom a complaint had been filed by German attorney Chan-jo Jun in Munich in 2016. Jun complained that Facebook had not deleted 440 postings that were flagged as inappropriate within a year. The prosecutors' office said in a statement that while the posting of certain content on Facebook could be against German law, the failure to delete those posts wasn’t.

- At the Mobile World Congress (MWC) this year, Facebook didn’t talk about its Internet beaming drones, but instead focused on the progress it has made with its telecom infrastructure project (TIP), which now hasmore than 500 equipment makers, operators and others in the industry as members. Facebook now appears to be doing what the telecoms wanted all along, i.e. sharing the cost of upgrading the network. Through TIP, it is developing networking technologies that increase efficiency/lower cost of the network.

It also has a wireless communications platform called Terragraph that is based on Nokia’s WPON (Wireless Passive Optical Network) backhaul technology. The platform is being tested in Kuala Lumpur with Norway’s Telenor and in Hungary with Deutsche Telekom (DE:DTEGn). A 60GHz version is being tested by Nokia (NYSE:NOK) .

This is quite a win-win because Facebook develops the technology but the telecoms pay for the trial. A new reference design with Intel (NASDAQ:INTC) and Radwin for Terragraph-certified 60 GHz solutions based on the Intel architecture is also in the cards. By working in collaboration with Telecoms, Facebook may be able to get more favorable deals for itself.

Facebook shares carry a Zacks Rank #2 (Buy). But you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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