Mark Zuckerberg responds to widespread Facebook documents leak
New York (CNN Business) – Mark Zuckerberg, CEO of Di Facebook social networking site, kicked off the company’s quarterly earnings call by addressing the latest wave of massive media coverage based on the treasure trove of internal documents Leaked on Monday.
“Good faith reviews help us improve, but my view is that we are seeing a coordinated effort to selectively use leaked documents to paint a false picture of our company,” Zuckerberg said. “The truth is that we have an open culture that encourages discussion and research about our work so that we can move forward on many complex issues that are not our own.”
The company’s results come amid perhaps the biggest crisis in the social media giant’s 17-year history. Tens of thousands of pages of internal documents leaked by whistleblower Frances Hogan made up the Wall Street Journal’s “Facebook Files” series, and on Monday, a deluge of additional news coverage by a consortium of 17 US news organizations, as well as hearings with states, United States and the United States. British legislators. The documents provide a deeper look into many of Facebook’s biggest problems, including its struggles to regulate hate speech and disinformation, the use of its platform by human traffickers, research on harm to young people, and more.
Facebook has rejected many of the reports, saying they are misleading and misunderstanding their investigations and actions. Zuckerberg last commented on the situation after a Senate hearing Hogan held earlier this month, in a statement that attempted to discredit the whistleblower. However, on Friday, another former Facebook employee filed an anonymous complaint against the company with the SEC, with allegations similar to those of Haugen.
But despite all the bad headlines, the company reminded investors on Monday that it is still a money maker.
Facebook reported $29 billion in profit for the three months ending in September, up 35% from the same period last year. The company generated $9.2 billion in profit, up 17% from the previous year. The number of people using Facebook’s suite of apps grew 12% year over year, to nearly 3.6 billion during the quarter.
The results were roughly in line with Wall Street analyst expectations. Facebook (FB) shares rose as much as 3% in after-hours trading Monday after the earnings report, before dropping to about 1% higher.
Public relations crises are no stranger to Facebook. In most cases, Facebook’s business continued to advance at a healthy pace despite protests from regulators and the public.
But this time it could be different. Facebook’s massive advertising business is already in tatters due to recent changes to Apple’s app tracking rules. The Apple iOS 14.5 software update, which took effect in April, requires users to give explicit permission for apps to track their behavior and sell their personal data, such as age, location, spending habits and health information, to advertisers. Facebook has strongly rejected the changes, and last year warned investors that the update could harm its business if many users choose not to be tracked.
Facebook warned on Monday that changes in iOS 14 could create “ongoing headwinds” in the fourth quarter of 2021.
“We’ve been open about the fact that headwinds are coming and we’re seeing them in the third quarter. The biggest is the impact of the iOS 14 changes,” said Sheryl Sandberg, chief operating officer of the company’s earnings call on Monday. . “As a result, we faced two challenges: one was that the targeting accuracy of our ads decreased, which increased the cost of achieving results for our advertisers, and the other was that measuring these results became more difficult.”
While much of the world has spent their day focusing on the real-world damage to Facebook, the company hinted to investors in the report that it wants them to look forward, not backward. Starting in the fourth quarter, the company plans to expand Facebook Reality Labs, its division dedicated to virtual and augmented reality services, as a separate reporting piece for its suite of apps, which includes Instagram, WhatsApp and the social network Facebook.
CFO Dave Wehner said Facebook is investing so much in this new division that it will reduce “our total operating profit in 2021 by about $10 billion.”
In a statement with the findings, Zuckerberg also focused on what would happen: “I’m excited about our roadmap, especially in terms of creators, trading, and helping build the metaverse.”
During the earnings call, Wall Street analysts asked about new Facebook initiatives and products like the metaverse and Instagram Reels much more than they did about Monday’s news coverage, a reminder that investors often prioritize growth potential. Evercore ISI asked Zuckerberg to rate the company’s progress in building artificial intelligence that can identify problematic content.
Zuckerberg pointed to the company’s quarterly transparency reports, which specify “the percentage of the content we engage with is our own AI… to find it rather than have to report it.” He said that “in most of these categories…more than 90 percent of the content we engage with, we are determined largely by an artificial intelligence system.” However, he noted that the success of his systems can vary by category.
“Some of the categories, like hate speech, were more difficult, because we work in about 150 languages around the world … There are many cultural nuances in this,” he said.
Zuckerberg also tried to contact his employees.
“I know there’s a lot of scrutiny in our efforts, and I think I just want to tell the team and the people working on this that I’m really proud of the progress they’re making,” he said.