Zuckerberg must convince Congress

Facebook CEO Mark Zuckerberg’s goals when appearing in front of multiple US congressional committees in the wake of the Cambridge Analytica data row should be to avoid gaffes, offer basic accountability and then stay in front of any regulation that lawmakers are contemplating to rein in his social network.

Zuckerberg’s testimony is a chance to consider the durability of Facebook’s business model, however well or badly he performs on the stand.

Facebook’s recent troubles have naturally inspired schadenfreude. Apple CEO Tim Cook said his company eschewed selling data to marketers. Apple makes virtually all its money from selling hardware.

Zuckerberg riposted that Facebook’s “free” service made it a boon to low-income people around the world.

The perverse fact about ad-driven online businesses is that, with the notable exception of Facebook and Google, they are unattractive.

The likes of Twitter, Yelp and BuzzFeed have aged badly. News sites that have prospered in recent years have done so on subscriptions, not ads.

The risk for Facebook now is that users drop out, engagement wanes or advertisers are spooked and flee. Alternatively, Congress or states may become much stricter on what consumer data can be harvested.

The good news for Facebook is that financial services in the US are highly regulated and happen to be quite profitable, thanks to armies of lobbyists that carve out loopholes and prevent the most penal oversight. Regulation may not be the worst thing either for Facebook. It could restore user and marketer confidence.

Given that it already has 2-billion users, it may be reaching maturity soon. London, April 10