Mark Zuckerberg’s terrible year: Facebook’s devastating decline in users caps off turbulent 2021 in which the company was rocked by whistleblower allegations, major service outages, and constant controversy
- Facebook stock was in a tailspin on Thursday after the company reported a decline in daily active users
- It follows a string of embarrassments and negative headlines for company and CEO Mark Zuckerberg
- Whistleblower Frances Haugen accused Facebook of ignoring potential harm to teen mental health
- Global outage of all Facebook services on October 4 led to widespread mockery and frustration for users
- Facebook is also caught in a tug-of-war over COVID-19 misinformation and concerns about censorship
- Zuckerberg attempted to pivot by renaming the company Meta and focusing on a virtual metaverse
Facebook’s devastating earnings report marked the end of a difficult year for the company, which has been battered by whistleblower allegations, a major global service outage, and protests and controversy over its policies.
Facebook reported on Wednesday that daily logins to its services dropped nearly 500,000 during the last three months of 2021, the first time in the company’s 18-year history that user activity has declined.
It sent Facebook shares plunging more than 20 percent, wiping more than $200 billion off the company’s market cap and erasing $29 billion from CEO Mark Zuckerberg’s net worth.
Zuckerberg blamed the dismal performance on Apple’s privacy changes and increased competition from services such as Tik Tok, but the decline in user activity follows a year of notably bad PR for Facebook.
Perhaps most significantly, former Facebook employee Frances Haugen leaked thousands of internal documents and embarked on a world tour testifying with damaging allegations against the company.
Facebook CEO Mark Zuckerberg (seen in October) suffered a rough year in 2021, culminating in a devastating decline in users in the final quarter following a number of controversies
Former Facebook employee Frances Haugen testifies before Senate Subcommittee on Consumer Protection, Product Safety and Data Security during a hearing about Facebook File: Protecting Kids Online in October
Facebook CEO Mark Zuckerberg announces the company’s new name, Meta, during a virtual event in October. Zuckerberg promises that the virtual-reality ‘metaverse’ he’s planning to build will ‘let you do almost anything’
Among the allegations were that Facebook is aware of the negative impact that Instagram has on teen girls, and that the company contributes to violence in developing countries.
Other claims based on the leaked documents relate to Facebook’s role in spreading false or divisive information.
Haugen has kept up the pressure, appearing on Thursday before a parliamentary committee in Australia to claim that Facebook underinvests in safety measures on its platforms Down Under.
She said Facebook disproportionately spends its safety budget in the United States and as a result the rest of the world misses out.
‘Because Facebook knows they operate in the dark – they don’t have to tell the truth about anything – they continue to underinvest because they can get away with the bare minimum,’ she said.
Facebook’s reputation was also damaged by a massive global outage lasting more than five hours on October 4.
It is believed that a faulty update to Facebook’s Border Gateway Protocol (BGP), which routes traffic between large private networks and the public Internet, left apps and browsers unable to locate the company’s services.
The global outage – which hit Facebook, Instagram, WhatsApp and Messenger on Monday – was caused when the faulty configuration disconnected its servers from the internet, meaning engineers had to travel to its Santa Clara data center to fix the glitch in-person.
But the repair was delayed, according a purported insider, because of ‘lower staffing in data centers due to pandemic measures’, along with outages in physical access card systems and internal messaging services.
Kieron Harding, an IT Infrastructure Engineer at GRC International Group, told DailyMail.com: ‘The nature of the problem meant Facebook would have needed network engineers to physically access their BGP routers – and due to the pandemic, some of the data centers quite possibly don’t have an engineer based on site, or someone who could have immediately started to work on the problem.’
‘One of the reasons why the outage lasted for as long as it did was because the misconfiguration of the BGP also affected Facebook’s physical door access systems – which shut down; meaning engineers couldn’t get into the buildings, or secure rooms, to start fixing the issues straightaway,’ said Harding.
Users around the world reported problems with Facebook, Instagram and WhatsApp on Downdetector
A Facebook staff member reportedly accidentally deleted large sections of the code (pictured) which keeps the website online
Ramesh Srinivasan, a professor at UCLA’s Department of Information Studies and expert on the relationship between technology and society, told DailyMail.com that both Facebook’s outage and the damaging whistleblower revelations only served to underline the need for heightened government regulations.
‘Just as Facebook is opaque about its internal practices, it’s also pretty opaque when it comes to how its underlying server architecture works,’ said Srinivasan.
He said that companies like Facebook ‘extract our attention, our outrage, our negative sentiments into trillion dollar valuations,’ calling it ‘a mechanism of tearing us apart at the seams.’
‘Look at how incredibly dependent we are as a country, as a world…on Facebook, and more largely on corporate, private, self-serving technology,’ he added. ‘Look at the blind dependence we have given, and the unjustified faith we have put in, some of the wealthiest companies in the history of the world.’
Biden accused Facebook of ‘killing people’ with misinformation
In July, President Joe Biden said that Facebook is ‘killing people’ with misinformation about COVID-19 and vaccines, drawing a furious response from Facebook execs.
Biden’s remarks came in response to a reporter, who had asked about his message to ‘platforms like Facebook’.
‘They’re killing people,’ he said. ‘The only pandemic we have is among the un-vaccinated. And they’re killing people.’
The remarks drew fury at Facebook, and Biden later walked back his comments, saying that he was referring to the people who spread misinformation on social media, and not the company itself.
Zuckerberg V Biden: Facebook hit back at President Biden after he accused the company of ‘killing people’ by allowing misinformation about the COVID-19 vaccine to circulate on its platform
In an interview with CBS This Morning host Gayle King, Zuckerberg rejected the notion that Facebook plays a significant role in discouraging vaccine uptake, insisting that ‘political leaders’ and the media are responsible.
‘If you look around the world in different countries – different countries are doing better or worse on getting their citizens vaccinated. And the US has a specific issue on this,’ Zuckerberg argued.
‘People use Facebook and social media all across the world so if this was primarily a question about social media I think you would see that being the effect in all the countries that use it,’ said Zuckerberg.
‘I think there’s something unique in our ecosystem here, whether it’s some of the political leaders or some of the media figures which I think is different than what we’re seeing across a lot of Europe or across a lot of other countries that are leading to higher levels of this. So I don’t think pinning this on social media primarily is accurate,’ he added.
Protesters targeted Facebook as Zuckerberg was mocked by Iceland
Protests against Facebook spread around the globe in 2021, regarding a number of the company’s policies and practices.
In September, demonstrators dressed as giant inflatable breasts protested outside Facebook’s headquarters in central London.
The protesters argued that medical tattoo artists and breast cancer survivors should be able to freely post images without being blocked and subsequently losing access to their accounts.
Demonstrations also followed Haugen as she testified around the world, including in Washington DC, London, Brussels and Canberra.
Protesters wearing inflatable breasts protest outside Facebook headquarters about the social media giant’s images algorithm in London in September. The aim of the protest is for all medical tattoo artists and breast cancer survivors to be able to freely post images without being blocked and subsequently losing their account
Senior campaigner Flora Rebello Arduini with a 4-metre-high installation, depicting Mark Zuckerberg surfing on a wave of cash and surrounded by teenagers, outside the Houses of Parliament in London in October
Facebook whistleblower Frances Haugen, center, poses during a visual protest, organised by campaign group SumOfUs, prior to her testimony at the European Parliament in Brussels in November
Meanwhile, Zuckerberg drew mockery with a cringeworthy Fourth of July video showing him riding an electric surfboard while holding an American flag as John Denver’s Take Me Home, Country Roads plays.
Social media users photoshopped Jaws into the image, depicting the massive killer shark about to devour ‘the Zuck.’
Another Twitter user wondered: ‘Where’s Jaws when you need him?’
Others added Zuckerberg with the flag into the film Titanic. The patriotic tech mogul is seen on a board in the flooded hallways of the doomed ship while Kate Winslet’s character, Rose, wanders nearby.
Zuckerberg’s July Fourth image also was superimposed on photos of recent disasters at sea, including the massive explosion of a mud volcano beneath the Caspian Sea.
Another creative social media user photoshopped Zuckerberg onto the Gulf of Mexico, where an oil pipeline operated by Mexico’s state-owned firm Pemex burst, causing a gas leak.
Mark Zuckerberg’s Fourth of July social media post in which he is seen riding an electric surfboard while holding an American flag as John Denver’s Take Me Home, Country Roads plays in the background is getting the meme treatment.
A few social media users photoshopped Jaws into the image as he is about to devour ‘the Zuck’
Zuckerberg is seen above photoshopped into the poster for the movie Jaws
Another Twitter user wondered: ‘Where’s Jaws when you need him?’
In November, an Icelandic tourism campaign poked fun at Facebook founder Mark Zuckerberg in a video mocking the social media giant’s name change announcement.
The video features Zuckerberg lookalike ‘Zack Mossbergsson’ introducing the ‘Icelandverse’, a parody of Metaverse, as part of a travel campaign for the campaign Inspired by Iceland.
Mimicking Zuckerberg’s stiff tone, Mossbergsson promotes Iceland.
The video starts off with Mossbergsson being introduced as the ‘Chief Visionary Officer’ awkwardly addressing the camera while wearing Zuckerberg’s black sweater and sporting short-combed haircut.
‘Hello and welcome to this very natural setting,’ he says. ‘Today I want to talk about a revolutionary approach to connect our world without being super weird.’
‘Some said it’s not possible. Some said it’s out of reach. To them, we say it’s already here. Seriously. Look, it’s right here,’ the Zuckerberg look-alike adds as he shows off Iceland’s landscape from his window.
Mark Zuckerberg impersonator ‘Zach Mossbergsson’ made a tourism campaign video for the company Inspired by Iceland, spoofing the Facebook founder’s Meta announcement
The impersonator copied Zuckerberg’s stiff tone while donning his black sweater and sporting his short combed haircut in the video
Mossbergsson then introduces the name of this ‘product’ which he dubs the ‘Icelandverse’ which is an ‘enhanced actual reality without silly looking headsets.’
‘In our open world experience, everything is real,’ he says as he fumbles to open a locked glass door.
‘And has been for millions of years,’ he adds, awkwardly folding his arms in silence.
Zuckerberg attempts to shift focus to metaverse by rebranding as Meta
In October, Facebook changed its name to Meta Platforms Inc, or simply Meta, as it tries to shift focus to its virtual-reality metaverse.
Wednesday’s earnings report was the first quarterly result released since the company’s name change in late October, which was both a turn toward the metaverse vision and a turn away from its scandal-prone social media empire.
The Silicon Valley giant’s whistleblower crisis last year highlighted accusations that executives prioritized growth over keeping their billions of users safe.
Scathing news reports based on internal documents leaked by ex-employee Frances Haugen rekindled long-deadlocked regulation efforts, but US lawmakers have made little progress since.
An activist group calling itself The Real Facebook Oversight Board seized on the results to warn of what may come next.
‘Facebook appears to now be feeling the impact on ad revenues from Apple’s new privacy first approach,’ the group’s statement said.
‘This will no doubt make them more desperate to drive ad revenue by any means necessary,’ it added.
Facebook CEO Mark Zuckerberg speaks to an avatar of himself in the ‘Metaverse’ during a live-streamed virtual and augmented reality conference to announce the rebrand of Facebook as Meta in October
A handout photo made available by Meta showing a framegrab from the keynote speech about the new company brand announced by Facebook CEO Mark Zuckerberg during the virtual Connect 2021 Conference in Menlo Park
Meta is betting heavily on its belief that the metaverse is the next major evolution of how humans live with the internet.
In this future that evokes science fiction, the public will use augmented reality glasses and virtual reality headsets to find their way around, work or play.
But its construction means tens of billions of dollars of investment in the Facebook Reality Labs branch, without any benefits for a long time.
‘There’s a lot of uncertainty about Meta’s investments in the metaverse and if or when they will have a positive impact on the company’s bottom line,’ said analyst Debra Aho Williamson.
Meta reported a decline in daily active users from the previous quarter for the first time as competition with rivals like TikTok, the video sharing platform owned by China’s ByteDance, heats up.
Meta said about 3 percent of worldwide monthly active users in the fourth quarter consisted solely of violating accounts while duplicate accounts may have represented about 11 percent of usage.
The disappointment over Meta’s earnings and the subsequent stock fall raised memories of the bursting tech bubble in 2000.
Investors seem to be becoming highly selective after the sector’s record-breaking run in recent months.
According to research firm Vanda, purchases from retail investors in late 2020 and early 2021 were focused on expensive tech, EVs and so-called ‘meme’ stocks. In the past week purchases of large-cap tech have skyrocketed while speculative assets have seen very little demand.
The so-called FAANG group of Facebook, Amazon, Apple , Netflix and Google’s Alphabet has seen around $400 billion in market capitalization wiped off in the opening weeks of 2022 as cheaper segments of the markets become more attractive while central banks taper stimulus.
Other social media stocks were also hit hard in pre-market trading on Thursday, including Twitter, Pinterest and Spotify. Spotify has been beset by a row over COVID vaccination misinformation and also released disappointing results.
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