Next concern for Facebook: disenchanted users



Through previous controversies in recent years, the population of Facebook users has steadily increased, providing the critical base that attracts an increasing flow of advertising revenue.

Facebook is now dealing with a wave of users, some of whom are tweeting under the hashtag # DeleteFacebook – which says abandon the social media giant, prompting some analysts to warn that their growth giant could sizzle .

"The biggest problem we see for Facebook is if the DeleteFacebook leads to the user's defection and finally to dollars assigned elsewhere,"

Barclays

Analysts said in a research note on Tuesday. The public reaction could also affect Facebook's ability to hire talented engineers, they said.

The latest crisis began on Friday night when Facebook said it was investigating reports that the analytical firm

Cambridge Analytica

, who worked with the

Donald Trump

campaign in 2016, incorrectly accessed the data of its platform on tens of millions of users, and retained the data even after having agreed to delete them. Cambridge Analytica said it followed Facebook's policies.

The controversy nullified 9% of Facebook's share price on Monday and Tuesday, erasing $ 50 billion in market value, before stocks rebounded 0.7% on Wednesday. Facebook is facing legislative consultations on two continents and an investigation by the Federal Trade Commission.

CEO Mark Zuckerberg broke his silence on the issue on Wednesday, admitted mistakes and promised research and improvements to user data policies. "We have a responsibility to protect your data, and if we can not, then we do not deserve to take care of it," Mr. Zuckerberg wrote in a Facebook post.

Tensions may decrease. For now, however, these guarantees were not enough for some users who were already frustrated by Facebook's handling of Russian interference on the platform around the 2016 US elections.

Sabine Stanley,

A 42-year-old professor at John Hopkins University says he had been thinking about erasing his Facebook account for months while the company battled one crisis after another, but the revelation about Cambridge Analytica and the slow response from Facebook pushed it to the limit. 19659003] "They combine that with the election scandal, and I decided that I could no longer support Facebook," says Stanley, who also deleted his account in Facebook's Instagram application.

A Facebook spokeswoman declined to comment. The number of people around the world who use Facebook at least once a month has more than doubled since it was made public in 2012, reaching 2.13 billion in the fourth quarter. Revenue and profits have grown even faster, thanks to the use of Facebook's vast amount of data to help advertisers direct their messages to those users.

Warning signs began to appear last year, as anger in the United States increased due to Facebook's lax controls over misinformation and abuse on its platform. In a previous Pivotal Research Group analysis of Nielsen data, US Facebook users spent 7% less time on the site in August compared to a year ago and 4.7% less in September.

Last month, Facebook said its users collectively spent 5% less time on the platform per day in the last three months of 2017, which translates to a little more than two minutes per day per user.

The company also said it experienced its first quarterly decline in the number of people logging in daily on its most lucrative market, the United States and Canada, where Facebook lost around 700,000 daily users. Facebook said that the decline was a problem and that the figure would probably fluctuate given the broad reach of Facebook in the region.

Brian Weiser,

a Pivotal Research analyst based in New York says he hopes the Cambridge Analytica problem will reduce the amount of time users spend on Facebook by 10% to 15%.

"The biggest and most disturbing thing here is the scale of this problem," says Mr. Weiser. "All operational failures indicate a real management problem."

Gabrielle Stress,

a 34-year-old industrial consultant in London deleted his Facebook account this week after recent data problems at the company, but said he had been using it less before.

"It was something great and now at this point it is more what always reminds me of birthdays," he said. "The threshold to eliminate your account is not that high anymore."

So far, there are few signs that advertisers have changed their plans due to the latest fury, although some prominent executives have criticized the company in recent months. Investors will have their next vision of Facebook's performance with their first quarter report within more than a month.

"If time goes by and it seems they still seem to disconnect from how users feel, then they might have a problem." He says

Colin Sebastian,

a senior research analyst at Robert W. Baird & Co. in San Francisco. "We can see now that they are in crisis management mode, which is a good thing."

Write it on Kirsten Grind at kirsten.grind@wsj.com


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