Is Facebook Late on Its Mission to Make the World Better?


Apr. 13 2017, Updated 10:36 a.m. ET

Growth is not a problem

Facebook (FB), unlike its competitor Twitter (TWTR), doesn’t have a growth problem. The company has been adding new subscribers and improving its revenue from each one of its subscribers. It’s posting strong double-digit top-line growth despite its already large size.

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Zuckerberg dreams of a magic wand

Facebook has reported that its US (SPY) and Canadian ARPU (average revenue per user) rose to $19.80 in 4Q16, from $13.70 in 4Q15. The above graph shows how the company’s US and Canadian ARPU has trended over the past few years.

But Facebook still has problems. Last year, it was widely criticized for taking down an iconic Vietnam War photo of a nude girl running from napalm bombs. It later restored the photo. Rampant fake news on the social network has also subjected the company to public scolding, putting its revenues and profits at risk.

In a lengthy letter in February, CEO (chief executive officer) Mark Zuckerberg seemed to admit that the company hasn’t done enough to make the world a better place. He said he wished he had a magic wand to bring down everything that taints Facebook’s image.

While Zuckerberg believes Facebook can leverage its technology and goodwill to help make the world a better place, it may be too late for Facebook to appreciate its responsibility as a powerful media tool. It may have laid back so long that it’s now scrambling to steer its mighty ship in the right direction.

Winning public trust

For Facebook, there’s pressure to win and keep public trust. It must do this to prevent losing its advertising market share to rivals such as Twitter, Snap (SNAP), and Alphabet’s (GOOGL) Google.


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