But weaved throughout the entire narrative of the conference was one constant theme: privacy. Almost the first words out of Mark Zuckerberg’s mouth when he strode onto the San Jose Convention Center stage was: ‘The future is private,’ before launching into his six-pillar strategy to rectify Facebook’s reputation.
Some commentators have expressed doubt that Zuckerberg is serious about privacy. Their reasoning is that Facebook had passed up numerous opportunities to do something about this issue in a significant way.
I do believe Zuckerberg is serious this time and there are four reasons why:
1. The political climate has turned against Big Tech, particularly Facebook.
Several 2020 presidential candidates have already called for the breakup of big technology giants like Facebook, Google and Amazon, including Sen. Elizabeth Warren (D-MA) and Sen. Amy Klobuchar (D-MN). This sentiment is even creeping into Republican rhetoric with Sen. Ted Cruz (R-TX) tweeting about Warren’s anti-tech stance: “First time I’ve ever retweeted @ewarren. But she’s right — Big Tech has way too much power to silence Free Speech.”
Zuckerberg understands that cold choppy waves have replaced his historical warm sea of support. I believe his strategy is to double down on privacy initiatives in order to stay out of the political firing line.
2. Advertisers are on high alert.
The walled gardens of Facebook, Google, et al have enjoyed a level of immunity in the past, mostly escaping a mass exodus of advertisers except for the odd flare-up. But for how long? Public sentiment has grown increasingly skeptical, due to consumers becoming more educated on data privacy. A generation of younger consumers have grown-up accustomed to hearing about breeches and hackers. They have a greater understanding of data-security issues, and are more socially conscious.
During the F8 keynote, I sat next to the Chief Digital Officer of one of the largest ad agency holding companies. He suggested that while his clients will unlikely pull the plug on any Facebook spend short of a major moral catastrophe, his advertisers are increasingly nervous. Zuckerberg is no doubt feeling this, too.
3. Facebook stock prices are rebounding to historical levels.
No question that 2018 was a turbulent year for Facebook’s stock price. Prices finished 26% lower than it started, due to a variety of reasons, including the Cambridge Analytica data scandal, Zuckerberg’s testimony before Congress, Sheryl Sandberg’s hearing before the Senate Intelligence Committee, security breaches and numerous departures of high-level executives.
Over the past several months in 2019, rebounding prices have provided relief. Zuckerberg would be facing internal pressure to continue this upward trend, while future proofing his business against any further disastrous impact. During the recent first-quarter earnings call, he assured analysts his privacy initiatives would not meaningfully impact Facebook’s business model.
4. Zuckerberg has grown up.
Facebook started as a platform that breached Harvard University security, and its disregard for its users’ privacy over the years is what led to the three issues described so far.
But after 1.5 decades of scaling and running an organization that has had an impact (one can argue positively or negatively) on billions of lives, Zuckerberg is a professional, mature CEO — and it shows.
He understands the macro-environmental factors confronting Facebook have changed. He understands significant action needs to happen now in order for his organization to remain competitive in the future. And, he understands this is important to allay suspicious politicians, cautious consumers, and nervous investors.
I believe this time, he’ll keep his word.