WASHINGTON, July 23 (Reuters Breakingviews) - Given the controversies that have dogged Facebook (FB.O) in the past few years, the social network’s continuing domination is remarkable. A new book by New York Times reporters Sheera Frenkel and Cecilia Kang reveals disturbing details about recent scandals and Chief Executive Mark Zuckerberg’s handling of the near-$1 trillion company’s growing power. Despite all the bad publicity and political outrage, there’s a nagging sense that none of it really matters, least of all to its 3 billion-plus users.
“An Ugly Truth: Inside Facebook’s Battle for Domination” does readers a favor by largely fast forwarding through Facebook’s history to focus on the last five years. The platform’s start in Zuckerberg’s dorm at Harvard University is well documented. Though his ruthlessness was on display then, the social network really became a business after he met Sheryl Sandberg, who became his second-in-command, at a Christmas party in 2007. The company went public five years later.
Their relationship is not as tight as it appears. Sandberg was hired from Google to be the adult in the room. She made Facebook more professional and turned it into an online advertising powerhouse. Her boss strangely didn’t seem that interested or appreciative, preferring to focus on features that would make the platform more addictive. Sandberg’s experience in Washington, where she had worked for former Treasury Secretary Larry Summers, for a while made her Facebook’s public face.
But when the company most needed adult supervision, Sandberg seemed to fade into the background. Though Facebook’s threat intelligence team fell under her purview, it was managers below her who directed the unit in the crucial months leading up to the 2016 U.S. presidential election. When President Donald Trump later made comments that could stir violence, employees looked to Sandberg to speak out against Zuckerberg’s decision not to remove that content. She stayed silent.
The Facebook’s founder asserted himself during another scandal that hit in 2018. That’s when revelations about political consultant Cambridge Analytica harvesting Facebook user data came to light. Though responsibility fell in Zuckerberg’s domain, he blamed Sandberg for the news coverage. It led to his first appearance in front of a congressional committee.
Zuckerberg’s zealousness to protect his company blinded him to problems and solutions. He saw Facebook’s power as manageable, embracing its reach while downplaying its influence. Those instincts led him to initially blow off the magnitude of Russian interference on the platform, cozy up to Trump, and act too slowly to remove content targeting the Rohingya ethnic minority in Myanmar.
What’s most surprising about these episodes is the ineptness and red tape that they reveal. From the outside, Facebook looks like a well-oiled revenue machine. “An Ugly Truth” reveals that, although Facebook discovered Russian manipulation on the platform several months before the 2016 election, warnings by then-Chief Security Officer Alex Stamos didn’t fully reach Zuckerberg or Sandberg until a month after the vote.
Zuckerberg’s creation emerges as a Jekyll-and-Hyde platform. The benign side hosts pictures and videos of cute babies, funny pets and birthday shout-outs. The other serves up toxic content that fuels conspiracy theories about election results or Covid-19 vaccines. That side produces the greatest engagement, which leads to more ad revenue.
The company has faced several campaigns urging users to delete their accounts. Co-founder Chris Hughes argued it should be broken up. Big name advertisers like Ford Motor (F.N) and Clorox (CLX.N) have boycotted the platform. Yet Facebook remains an astoundingly successful business, something the book only briefly touches on. In the first quarter of 2021, the eponymous social network’s monthly users rose 10% year-over-year to 2.85 billion. Nearly 3.5 billion people logged onto one of its family of apps, including Instagram and WhatsApp. Revenue increased by almost 50% in that period to $26 billion.
While users continue to vote with their thumbs, there’s not much pressure on Facebook to change. That applies both inside the company and in bodies that could force overhauls, like the U.S. Congress. Even though rioters used the social network before and during the storming of the Capitol building in January, Facebook does not face the same regulatory scrutiny as Wall Street after the 2008 financial crisis. Until there are consequences for its business, Facebook will keep humming along. That’s the ugliest truth of all.
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- “An Ugly Truth: Inside Facebook’s Battle for Domination,” by Sheera Frenkel and Cecilia Kang was published on July 13 by Harper.
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