Facebook earnings: Zuckerberg slams press coverage

Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee at Rayburn House office building on Capitol Hill on October 23, 2019 in Washington, DC. Zuckerberg has testified about Facebook’s proposed cryptocurrency Libra, how his company will deal with misinformation and misinformation by political leaders during the 2020 campaign and how it will deal with its users’ data and privacy.

Chip somophila | Getty Images News | Getty Images

Facebook CEO Mark Zuckerberg came out rocking at the start of the company’s third-quarter earnings call on Monday, defending its research into how its services affect users, following several press reports Monday based on documents leaked by a former employee.

“Good-faith criticism helps us improve,” Zuckerberg said. “But my view is that what we’re seeing is a coordinated effort to selectively use leaked documents to paint a wrong picture of our company. The truth is we have an open culture, where we encourage discussion and research around our work so that we can make progress on many complex issues that are not our own.”

Zuckerberg said Facebook is doing this work “because we care about getting this right.”

The reports came from a consortium of 17 news outlets in the United States provided internal research by Frances Hogan, a former employee who also submitted the documents to Congress and the Securities and Exchange Commission, seeking whistleblower status. They follow an earlier series based on the same documents published by the Wall Street Journal, which led to hearings in Congress and abroad.

Reports revealed that Facebook was aware of the ways its services could negatively impact the mental health of some users, pushing polarizing recommendations to users and spreading potential misinformation. While Facebook has taken steps to make its platform more secure on all of these charges, the company’s critics say it has not acted boldly or quickly enough.

One of the themes in Zuckerberg’s argument was that the problems Facebook faces are a reflection of society.

“These issues are not primarily about social media,” Zuckerberg said. “This means that no matter what Facebook does, we won’t solve it on our own.”

He said polarization was starting to escalate in the US “before I was born” while pointing to non-specific research that found that countries using similar social media have experienced stagnant or declining polarization.

He said Facebook often needs to choose between a set of trade-offs, such as providing encryption in exchange for supporting law enforcement investigations.

“It’s good to say that we’re not solving these impossible trade-offs because we’re just focused on making money, but the truth is that these questions are not primarily about our business, but about balancing different hard social values,” he said.

Zuckerberg said he called for regulation so that companies like Facebook wouldn’t have to choose between those trade-offs.

He said he was proud of Facebook’s research and emphasized the company’s investment in safety and security measures.

But he said he was concerned that responding to Facebook’s research could create negative incentives for other companies to do similar work.

“I worry about the incentives we create for other companies to be as introspective as we were before,” he said. “But I am committed to continuing this work because I believe it will be better for our community and our business in the long run.”

New North Star

At the end of his opening statement, Zuckerberg announced a new strategic vision for the future of the platform. He said that instead of making Facebook a place that serves the largest number of people, it will now focus more on young adults between the ages of 18 and 29.

“We are retooling our teams to make serving young adults their North Star, rather than optimizing it for more seniors,” Zuckerberg said. “Like everything, this will include trade-offs in our product, and will likely mean that the rest of our community will grow more slowly than it otherwise would. But it also means our services are getting stronger for young adults.”

Zuckerberg said the transformation would take “years, not months.”

This change and other things Zuckerberg mentioned, including updating Facebook and Instagram to focus on video and a penchant for short video producer Reels, would make the platform more similar to TikTok and go after a significant portion of its user base. Zuckerberg cited TikTok as one of the toughest competitors he’s seen.

Facebook often teases TikTok’s rapid growth when it faces questions about its massive power, which is the subject of an antitrust complaint filed by the Federal Trade Commission. The Federal Trade Commission has accused Facebook of illegally monopolizing the personal social networking space, in part through its acquisition of Instagram and WhatsApp.

Several reports from leaked documents show that Facebook is increasingly concerned about the lack of engagement on its main platform among younger users, which could create an existential threat to its future. However, focusing on young adults, rather than teenagers under the age of 18, could ease pressure from lawmakers and others who have warned Facebook against making a version of its products for children.

Subscribe to CNBC on YouTube.

WATCH: How Big Tech Can Hold on to 2021 Gains Amid Latest Regulation Batch


Leave a Comment