By Mitchell Anthony
There is a reason why Facebook is the first name in the FAANG!
Facebook has become one of the most widely known companies in the world for many reasons. It has led the evolution of social media and its tools for sharing ideas, personal views, political views, pictures, and just about everything else has been widely used by Generation X, the millennials, and now the baby boomers. Facebook has learned how to monetize their products as their clients are highly sought after by anyone with something to sell. Facebook’s revenue for advertising has been growing hyperbolically and the outlook remains fantastic. Facebook has also been monetizing information they gather about what their clients do on their platform, what they share with friends, and what sites they visit. All of this has been done legally and with authorization from the clients. However, what they are doing here has been widely misunderstood by regulatory bodies and the media and anyone seeking to make a story that will sell newspapers.
The media and members of Congress have attacked Facebook in a seemingly unfair manner for alleged breaches that may have occurred in their duty to safeguard their client’s data and only share information they gather about their clients that is authorized. Thus far the regulatory body has not been able to identify any illegal conduct by Facebook based upon current laws and regulations. The hoopla has been all about whether or not the regulatory environment needs to be adjusted so what Facebook is doing with information they gather is fair and reasonable. The media and regulatory bodies seem to want to hold Facebook to a standard that is not realistic for a company whose stated objective is to build products and services to allow consumers to share information and data with friends and business associates. The key word is share. Facebook is not a bank that has been entrusted to hold cash or securities for clients. It is a social media company that people utilize to share information.
Facebook’s strength is their team of innovative creative professionals that have and continue to make social media products that are state-of-the-art and sought after by people around the globe. Undoubtedly they have taken their eye off the ball a bit regarding how to manage expectations in the political environment for what they do and the freedom they should have. I believe Congress will find other things more appropriate for their time as Facebook does a better job of setting expectations in 2019. The company has been distracted and their earnings growth in the year ahead will not meet initial targets but they are still on a tremendous secular growth path that is unaffected by tariffs or economic cycles.
The outlook for this company is still very bright.