The data scandal around Cambridge Analytica currently has Facebook firmly under control. These days, CEO Zuckerberg is summoned to the US Congress and is confronted with unpleasant questions. Zuckerberg’s defense that “Facebook is an idealistic and optimistic company” and has never seriously argued that the platform could be misused for malicious purposes is quite naïve anyway.
However, there are signs that Facebook users are largely ignoring the news. A survey by Deutsche Bank Markets Research earlier this month revealed that only one percent of respondents (n = 500) disable or even delete their accounts. Investors now have another meaningful number that supports this assumption.
Interaction still strong
Jefferies has now shared the findings of a study stating that the scandal does not affect the central Facebook platform. Analyst Brent Hill notes that the time spent from March 2017 to March 2018 has actually risen by 15%. The analyst also says Facebook’s profitability would first of all suffer because all the measures to improve security cost money. Ultimately, they would be worthwhile.
“In light of the recent difficulties, we believe FB is likely to employ a significant amount of staff and consultants to focus on privacy and security. This will affect margins in the near future, “Hill wrote. “We do not consider this as negative, however, as investments focus on areas where consumer confidence is built, which will be beneficial over the long term.”