Many people take Facebook for granted. The social media giant has become such a big part of our lives that often we don’t even see how much of it we use every day. But what would happen if Facebook suddenly disappears? Will life go on? It is a hard question to answer. In fact, it’s a multibillion-dollar question considering just the market value of the company.
In this article, we will try to analyse if Facebook can survive in the future and if not, what would happen.
Why is there a threat to Facebook?
Facebook has come under a lot of scrutiny recently due to the Cambridge Analytica scandal. The repercussions have been felt across the globe. As the world’s biggest repository of people’s information, Facebook has a massive responsibility to protect the user’s privacy.
While filing its IPO prospectus, Facebook had put down privacy and user trust as one of the biggest risks to its survival. If users feel they cannot trust the social media giant to protect their private information, they will simply stop using the platform. Since the whole business is driven by user interaction, a big drop in the number of users will directly affect the company’s bottom line.
Cambridge Analytica is an excellent example of Facebook’s own platform being misused to nefarious ends. Such scandals not only breach user trust but even more crucially, it attracts legal action from different countries. These actions could dent the image of the company and thereby halt its progress.
Facebook currently has over a billion daily users. After its massive grown in the last decade, the next few years will be much slower. So the only way to improve the financials is to improve the earning by the growth in the advertising platform, the company’s main source of income.
But if the user participation decreases, advertisers will pull off their money. To keep the advertisers happy, Facebook has to give them access to demographic data. The more detailed the data, better the ad targeting and more conversion for the advertisers.
To keep the user interaction high, Facebook has to keep releasing new features, promote app development on its platform and at the same time, keep a strict vigil on how these apps use the data they collect.
One more scam like Cambridge and the hammer will come down hard from either the US Senate, the Supreme court and the worst of them all, the European competition commission.
Facebook’s market cap fell by over 7% within days of the Cambridge scandal proving how vulnerable it is to privacy-related issues. So it is important the company take a few steps to ensure things like this never happen again.
For starters, they can implement GDPR rules globally. This will ensure people everywhere and not just Europe can have an assurance that Facebook cannot use their data without explicit permission.
Next, make the opt-out process simple and easy so people can always choose what they share, especially with third-party apps.
Third, implement better separation between user data and third-party apps.
These are some of the steps that could ensure Facebook survives in the future.