Facebook FB executives Mark Zuckerberg and Sheryl Sandberg yesterday held a virtual roundtable meeting via Zoom with heads of organizations compiled to form the “Stop Hate for Profit” campaign. The meeting follows a 100-page report released at the culmination of a 2-year audit of the social media giant which was pointed in its criticisms of its treatment of hate speech posts on the platform. However, while some were hopeful the meeting would yield results, the organization heads came away “deeply disappointed.”
The “Stop Hate for Profit” campaign materialized in the form of a massive ad-buy boycott on Facebook, now including companies like Microsoft MSFT, Starbucks SBUX, Verizon VZ, Chipotle CMG and many others. Facebook brings in billions of dollars in ad revenue every year. But facing criticism for allowing posts and groups on Facebook which incite violence, target voting disinformation, placate Holocaust deniers and foment anti-Muslim sentiment, these firms took initiative and joined the growing boycott.
Based on the results of yesterday’s meeting, however, it seems to have not yet made an impact. According to those on the Zoom call, including heads of the Anti-Defamation League and the NAACP, CEO Zuckerberg failed to address demands of protecting Facebook users from hate groups, or agree to make a public denouncement of these groups. The only reported acknowledgement the company made was that it has “more work to do” on this issue.
As for the Facebook audit, headed by a former head of the ACLU, said that the company is not “sufficiently attuned to the depth of concern” on these matters, and that its approach to civil rights “remains too reactive and piecemeal.” Facebook has even lost employees over the issue, walking off the job in protest with company policy.
All this is to point out that Facebook, which reports Q2 earnings results 3 weeks from today, may see a hit to its revenues as a result of this stand-off. Currently, the Zacks consensus is for the company to bring in over $17 billion in overall quarterly sales, nearly $77 billion forecast for the entire fiscal year. Facebook claims 8 million companies buying ad space on its platform.
But with some of its biggest advertisers still boycotting — clearly the position from Zuckerberg at this stage is that they will return, regardless of any policy shifts on hate groups — we may see estimates begin to melt down further as that report date approaches.
Right now, Facebook is a Zacks Rank #3 (Hold)-rated stock with a Value-Growth-Momentum grade of C. Shares, while down 1.75% in today’s pre-market, are nevertheless trading up around all-time highs. The company went public in spring of 2012.
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