Ad boycott: Where did Mark Zuckerberg go wrong with Facebook?
Big ticket advertisers are threatening to boycott the social media platform
Right now, almost half of the people on the planet are actively using Facebook, Instagram, WhatsApp or Messenger; there are 2.6 billion using Facebook alone; and on any given day during March, 1.73 billion of us were active on Facebook — up from 1.66 billion users last December. But from Wednesday, advertisements from some 400 brands will be pulled from Facebook over the failure of the social media behemoth to take action against hate speech on the site.
The prospect of such a boycott might be enough for most companies to change tack — but Facebook is unlike any other company. So far, Mark Zuckerberg, its founder and CEO has shown little inclination of changing course. He has, however, agreed to meet with the organisers of the ‘Stop Hate for Profit’ boycott movement — an umbrella group for the National Association for the Advancement of Coloured People, the Anti-Defamation League, Colour of Change and Black Lives Matter who have been leading protests after the death of George Floyd under the knee of a police officer in Minnesota on May 25.
Challenge for advertisers
If anything, the boycott presents those advertisers with a challenge to get their commercial messages out to such a vast number whose eyeballs are readily and regularly available on Facebook. For Zuckerberg, it’s but the latest hiccup in building and curating the world’s largest networking site, one that tracks our movements and knows more about our consumption than governments, advertisers, analysts and programmers put together.
Those brands together represented just 6 per cent of Facebook’s 2019 annual revenue of just a little more than $70 billion (Dh2.57 trillion). Oh, and that $70 billion would be just behind the Gross Domestic Product of Oman and slightly ahead of Venezuela according to 2019 figures from the International Monetary Fund, putting Facebook somewhere ahead of 130 nations in net worth.
And Zuckerberg? Well, given the complicated stock structure at Facebook, the CEO controls 60 per cent of voting stock — leaving little opportunity for shareholders to remove him anytime soon. Besides, the brand itself is intrinsically linked to Zuckerberg — and Zuckerberg does as Zuckerberg wants. As of Wednesday he hasn’t ordained to discuss the controversy directly. That alone is bound to antagonise the Stop Hate for Profit organisers.
High political stakes
It hasn’t gone down too well either with segments of Facebook’s more than 48,000 employees worldwide, who have called out their CEO for his failure to change its policies on hate speech and content on its platforms. With an presidential election looming in the United States in November, the political stakes are high. Whether the advertising boycott lasts until then is likely a moot point — Stop Hate for Profit has asked for the top brands to take a pass on Facebook ads just for the month of July.
Six weeks ago Zuckerberg turned 36 and sits on a personal fortune worth slightly less than $80 billion, putting him just behind Amazon’s Jeff Bezos and Microsoft’s Bill Gates. He was Time Magazine’s Person of the Year a decade ago.
The prodigy
He was born into a comfortable family and grew up in Dobb’s Ferry in New York, about an hour’s drive north of Manhattan. His father, Edward, was a dentist with his surgery attached to the family’s home. His mother, Karen, was a psychiatrist before the birth of Mark and siblings Randi, Donna and Arielle. By the time the eldest boy turned 12, he had developed a messaging programme on Atari BASIC to help the family communicate with each other — and to keep track of his father’s dental appointments. His parents organised extra private tutoring in computing — and it wasn’t long before the tutor complained he couldn’t keep ahead of the prodigy.
While still in high school he developed an early version of music software he called Synapse, and spurned job offers from AOL and Microsoft. He did, however, enrol at Harvard in 2002 and quickly became the go-to software developer on campus. He invented Facemash, which compared the pictures of two students on campus and allowed users to vote on which one was more attractive. Three fellow students — Divya Narendra, and twins Cameron and Tyler Winklevoss — sought him out to work on an idea for a social networking site they called Harvard Connection, essentially a campus dating site. He agreed to help but soon dropped out, creating his own social networking site called The Facebook.
Along with Dustin Moskovitz, Chris Hughes and Eduardo Saverin, they ran The Facebook from a dorm room until June 2004.
Beginning of an era
But Zuckerberg realised its potential, dropped out and moved the company to Palo Alto, California. By the end of that year, Facebook had one million users. Within months, venture capital firm Accel
Partners invested $12.7 million into the network. By December 2005, it had 5.5 million users — a commercial success. Yahoo was repulsed as an early commercial suitor.
But he also faced legal challenges as the founders of Harvard Connection claimed he stole their idea. Although an initial settlement of $65 million was reached, the dispute simmered well into 2011 as they claimed they were misled over stock values.
Fake news, data breach
The current crisis facing Zuckerberg is not dissimilar to criticism in 2016 over the proliferation of fake news posts before the 2016 US presidential election. And two years later, after reports that Cambridge Analytica, a data firm with ties to President Donald Trump’s 2016 campaign, had used private information from approximately 87 million Facebook profiles without the social network alerting its owners.
Despite the controversy and pledges to reform, the social media platform is still more popular than ever — and worldwide lockdowns from coronavirus have only increased its use. Over the past two weeks, as the advertising boycott gathered steam, Facebook shares have actually increased — adding another $1 billion to Zuckerberg’s net worth.
Given the complicated stock structure at Facebook, the CEO controls 60 per cent of voting stock — leaving little opportunity for shareholders to remove him anytime soon.