Facebook Inc (NASDAQ:FB) is now working on developing a tool that will help people to learn if they were influenced by fake ads sponsored by Russia-based Internet Research Agency in the period from January 2015 to August 2017. The tool will be available by 2017-end to certain users.
In a blog post, the social media giant said, “It is important that people understand how foreign actors tried to sow division and mistrust using Facebook before and after the 2016 US election. That’s why as we have discovered information, we have continually come forward to share it publicly and have provided it to congressional investigators. And it’s also why we’re building the tool we are announcing today.”
Last month, Facebook had established a new set of rules for advertisers to make ads more transparent. The company said bringing more transparency is good for democracy and elections. It is a must for political advertisers to verify their identities now.
Facebook, Inc. Revenue (TTM)
Facebook, Inc. Revenue (TTM) | Facebook, Inc. Quote
Facebook has been increasing safety and security of the users on the platform ever since the Russian ad fiasco came into the spotlight. In September this year, Facebook revealed that it identified Russian accounts spending nearly $100,000 in ads (over 3K), aimed at influencing the U.S. elections (from June 2015 to May 2017). This caused a massive uproar. It initially claimed that the ads were seen by nearly 10 million users but eventually raised the number to over 126 million.
In the United States, Facebook recently along with Twitter (NYSE:TWTR) and Alphabet (NASDAQ:GOOGL) testified to the Congress regarding the alleged misuse of its platform by Russian factors.
Facebook has also hinted that Russia may have tried to meddle (though the extent is not known to be significant) with the Brexit vote, per BuzzFeed reports, sending shockwaves across the Atlantic.
Given this, CEO Mark Zuckerberg, on the last earnings call, stated that the company was willing to forego profits in order to step up security on its platform. He was quoted saying, “We're serious about preventing abuse on our platforms. We're investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits”, and slashed expectations for future margin growth in light of the recent events.
Facebook will now make sizable investments to strengthen security on its platform. The company will double the number of people working on safety and security to 20K by 2018. Facebook’s workforce is already strong at 23K (as of Sep 30, 2017).
The fiasco is yet to impact its quarterly performance or share price movement. Since September, shares are up 5.2% compared with 2.8% increase seen in the industry. However, its reputation has certainly taken a hit.
Facebook carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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