When I wrote last month that Facebook would be the biggest loser in the Russian melee, I didn’t imagine it would be this bad. But over the last week—while I was enjoying a break from this newsletter—the social network company lost about 10% of its value, or $50 billion.
Mark Zuckerberg weighed in yesterday afternoon with a blog post that you can read here. “We have a responsibility to protect your data,” he wrote, “and if we can’t, then we don’t deserve to serve you.” Problem is, that’s a responsibility Facebook has had since day one, and Zuckerberg’s increasingly frequent mea culpas keep coming days late and mega-dollars short. If your memory needs refreshing, the folks at Fast Company did a nice summary of 15 years’ worth of Zuckerberg apologies here.
Most of yesterday’s post was devoted to defending Facebook’s response over the last three years to abuses by Cambridge Analytica. But of course, Facebook didn’t ban Cambridge Analytica from its platform until Friday—and then only in response to newspaper inquiries. That’s not likely to convince anyone that the CEO has turned over a new leaf, or to slow the anti-Facebook bandwagon. As one commenter on the post put it: “So basically you knew this shit was going on years ago and NOW since you’ve been caught with your pants down, this is your response? Pathetic.”
If Zuckerberg really has had a change of heart, and wants to be taken seriously, he’ll have to do more than write a defensive-sounding blog post. Among other things, he’s going to be called to testify to Congress, and he would be wise not to send his lawyer in his place, as he did last year.
The bigger problem is that Facebook’s entire business model is based on selling peoples’ data—and not always in ways that those people approve of, or have agreed to. A true ”fix” to the problem could also tank the company’s revenue. That’s why this week’s stock price swoon probably will not be the last.
By the way, among those joining the #deletefacebook campaign this week was Brian Acton, who made a fortune cofounding and then selling WhatsApp to Facebook.
More news below.
GSK and Pfizer
GlaxoSmithKline has beaten a rival bid from Reckitt Benckiser for Pfizer’s healthcare business, according to a Financial Times report. The business, which includes products such as Advil painkillers and Centrum multivitamins, may be worth up to $20 billion, Pfizer hopes. It’s not clear if there were other bidders. GSK shares rose on the news, while Reckitt’s fell. FT
Naspers and Tencent
South Africa’s Naspers is selling 6% of its stake in the Chinese tech giant Tencent—a cash-in that’s worth a cool $10.6 billion. The media group has a 33.2% stake in Tencent, which will fall to 31.2%. Naspers made a very smart decision back in 2001 to put $32 million into the Chinese firm, giving it a stake that now has a value of $175 billion. Naspers said it will use the cash to “reinforce [its] balance sheet” and to invest in other things, like food delivery and fintech. Naspers
YouTube vs. Guns
YouTube has quietly introduced a ban on videos promoting or linking to sites that sell firearms and things like bump stocks. It’s also banned videos that show people how to assemble firearms. “While we’ve long prohibited the sale of firearms, we recently notified creators of updates we will be making around content promoting the sale or manufacture of firearms and their accessories,” the Google-owned platform said. Gun enthusiasts are not pleased. Bloomberg
Musk’s Green Light
Tesla’s shareholders have approved Elon Musk’s controversial pay deal, which will see the CEO collect up to $2.6 billion if the company hits a series of valuation and sales targets. It also ensures that Musk will stay at the helm of Tesla for the next decade. The package attracted criticism from some investor groups over its size. The news of the approval sent Tesla’s shares up 3%. BBC
Around the Water Cooler
The Schrems Effect
Bloomberg has a pithy profile of Max Schrems, the young Austrian lawyer who has done more than any other individual to get companies such as Facebook—and really, Facebook in particular—to change their ways on the privacy front. It was Schrems who was responsible for sinking the transatlantic Safe Harbor data-sharing agreement, and he’s preparing fresh suits under his newly crowdfunded “None of Your Business” (NOYB) organization, once Europe’s new GDPR data protection law comes into effect in late May. Bloomberg
African Single Currency
South African President Cyril Ramaphosa has backed the idea of a pan-African single currency. Ramaphosa said the move would help the continent wean itself off foreign currency. “We must rid ourselves of this colonial mentality that demands we rely on other people’s currency. Perhaps the day, the hour and the moment could have arrived for us to create a single African currency. Our focus should not be on our individual countries but the continent as a whole to unlock great opportunities and capabilities,” he told a meeting of the African Continental Free Trade Area business forum. Independent Online
The U.K. government is launching a task force to examine the risks and benefits of cryptocurrencies. The group will include the Bank of England and the Financial Conduct Authority. Chancellor Philip Hammond said he is “committed to helping the sector grow and flourish.” The U.K. and Australia have also signed a “fintech bridge” agreement to let each other’s companies more easily access each other’s markets. CNBC
Before being sacked by Attorney General Jeff Sessions, FBI Deputy Director Andrew McCabe reportedly authorized an investigation into whether Sessions lied to Congress. According to the Justice Department, Sessions didn’t know about the probe when he decided to fire McCabe. The investigation apparently ended without criminal charges. NBC