Facebook had a not so good, very bad day yesterday, and it seems like things are not getting better. The social media site and its apps including WhatsApp and Instagram went down for six hours on Oct. 4. The technical issue followed whistleblower Frances Haugen’s “60 Minutes” appearance Sunday evening, who said during the interview that the platform has knowledge of its negative impacts and is not acting on them. She is testifying before Congress today at the subcommittee hearing “Protecting Kids Online: Testimony from a Facebook Whistleblower.”
Already, CEO Mark Zuckenberg lost $7 billion, following Facebook’s stock selloff, Bloomberg reported.
Santosh Janardhan, Facebook’s VP of infrastructure, wrote a blog post yesterday apologizing for the outage. “To all the people and businesses around the world who depend on us, we are sorry for the inconvenience caused by today’s outage across our platforms,” he said. “We’ve been working as hard as we can to restore access, and our systems are now back up and running. The underlying cause of this outage also impacted many of the internal tools and systems we use in our day-to-day operations, complicating our attempts to quickly diagnose and resolve the problem.”
He added that the outages were due to “configuration changes on the backbone routers that coordinate network traffic between our data centers caused issues that interrupted this communication. This disruption to network traffic had a cascading effect on the way our data centers communicate, bringing our services to a halt.”
A selloff sent the social-media giant’s stock plummeting around 5% on Monday, adding to a drop of about 15% since mid-September, Bloomberg reports. This morning, the stock was down 4.8% in pre-market trading, but it rebounded over the morning 1.8%.
In turn, Zuckerberg’s net worth went down to $120.9 billion yesterday, dropping him below Bill Gates to No. 5 on the Bloomberg Billionaires Index. He’s lost about $19 billion of wealth since Sept. 13, when he was worth nearly $140 billion, according to the index.
Earlier last month, the Wall Street Journal published the “Facebook Files series” based on Haugen’s gathering of internal documents showing how Instagram led to depression and anxiety in many teenage girls, according to the WSJ. In addition, Haugen released other internal documents that could come up for discussion at today’s hearing, including how the company’s moderation rules favor elites; how its algorithms foster discord; and how drug cartels and human traffickers use its services openly. Lawmakers might also focus on what role Facebook may have played in the Jan. 6 Capitol riot.
CFRA Research issued a Hold rating, reflecting “a balance between FB’s looming regulatory risk and its tremendous potential for long duration, 20%+ annual revenue growth just in advertising,” according to a note sent to GOBankingRates.
CFRA added, however, that Facebook faces serious and intensifying regulatory risks that could potentially dovetail with social user and/or advertiser backlash, especially against FB’s “hands off” editorial approach to content.
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Last updated: October 5, 2021