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Inflatable Angry Emoji Looms Over Facebook’s Annual Shareholder Meeting

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Protesters carrying an inflatable angry emoji greeted Facebook shareholders as they gathered for the company’s annual meeting on Thursday, the latest sign of its struggle to shake off privacy scandals and rein in fake news and hate speech.

The social media giant again faced demands for reform at Thursday’s meeting, including shareholder proposals that called for revamping the company’s voting structure and ousting Chief Executive Officer Mark Zuckerberg as chairman.

The measures had little chance of succeeding, as a dual-class share structure gives Zuckerberg and other insiders control of about 58% of the votes. Many investors have shrugged off the scandals swirling around the company, as it has beaten Wall Street’s estimates for revenue growth and continues to add users globally.

Zuckerberg declined to answer a shareholder question on why he would not agree to create an independent board chair, instead restating his view that regulators should set the rules for companies around privacy and content.

But even though the votes are largely symbolic, they are still seen as a useful barometer of investor sentiment about how well the social media icon is coping with unprecedented challenges to its hands-off approach to content.

Last year, about 83% of shares held by outside investors voted for a proposal that would have the company move to a structure of one vote per share and do away with the supermajority shares.

A coalition of activist groups have urged big investors to reject Zuckerberg’s nomination to the board this year, saying Facebook has failed to protect users, especially racial and religious minorities.

Outside the hotel, a small group of protesters filmed themselves hoisting the 8-foot (2.5-meter) red emoji balloon, saying the company failed to protect its users, particularly minorities, from hate speech and other abuses.

“Zuckerberg has said that he wants to protect people from white supremacy but there’s still a ton of white supremacists organising on Facebook,” said Leila Deen, program director for SumOfUs, the group in the coalition responsible for the balloon.

Nearby, an opposing protester in a red hat stamped with “Make America Great Again,” a slogan of US President Donald Trump, used a loudspeaker to accuse Facebook of censoring conservatives.

The coalition, led by consumer group Majority Action and civil rights advocate Color of Change, said they had gathered 125,000 signatures on a petition targeting BlackRock, one of Facebook’s biggest outside investors.

BlackRock’s funds backed all of Facebook’s director nominees last year, but also voted for two shareholder proposals that would have reorganized Facebook’s governance structure.

It declined to comment on the petition, with a spokesman saying it did not preview votes or comment on specific companies.

Other shareholders in the meeting said the company created a “hostile work environment” for people with conservative views and pressed for a diversity report reflecting its public policy positions.

Under scrutiny
Facebook has been under scrutiny from regulators and shareholders since last year, when reporting revealed that the data of some 87 million users had been shared with now-defunct political data firm Cambridge Analytica.

The company has also come under fire over Russian meddling in the 2016 US presidential election, which used social media to spread disinformation, and its frequently shifting policies around which content is permitted on its platform.

US House Speaker Nancy Pelosi criticised the company on Wednesday, saying she was no longer willing to give Facebook the benefit of the doubt on Russia after it refused to remove a heavily edited video that attempted to make her look incoherent.

“I thought it was unwittingly, but clearly they wittingly were accomplices and enablers of false information to go across Facebook,” she said.

The comments raise the spectre of harsher action in Congress against Facebook. Pelosi has previously warned that Section 230 of the Communications Decency Act, which shields tech companies from legal liability for content created by their users, was a “gift” that had been abused and could be reconsidered.

Investors do not seem worried.

The company’s stock jumped 10 percent after its last earnings report, even as it announced it was setting aside up to $5 billion for what could be the largest civil penalty ever paid to the Federal Trade Commission, which has been investigating Facebook over alleged privacy violations.

One of Facebook’s largest fund investors, William Danoff of the $123 billion Fidelity Contrafund, did not mention any of Facebook’s privacy issues in his most in his most recent quarterly commentary to investors.

He wrote only that, as his portfolio’s second-largest holding, Facebook “appeals to us based on growth in its various apps and revenue from advertisers that want to reach the firm’s enormous base of daily active users.”

Danoff has been a long-time backer of Facebook and previously indicated he was satisfied with the company’s reform efforts to date.

Among other top Facebook investors, last year Vanguard Group Inc withheld support from Zuckerberg and Sandberg, and backed a measure to reform Facebook’s voting structure.

© Thomson Reuters 2019

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Former head of Facebook app Fidji Simo defends company following whistleblower testimony – TechCrunch

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The former head of the Facebook app, who reported directly to CEO Mark Zuckerberg, Fidji Simo, defended the social network at the start of an interview at the WSJ Tech Live event this afternoon. The exec was there to discuss her new role as Instacart CEO and her vision for the future of food delivery, but was asked to comment on the recent Facebook whistleblower’s testimony and the attention it has since raised.

Simo said she understood the scrutiny given Facebook’s impact on people’s lives. But she’s also worried that Facebook will never be able to do enough to appease its critics at this point, despite the complexity of the issues Facebook is grappling with as one of the world’s largest social networks.

“They are spending billions of dollars in keeping people safe. They are doing the most in-depth research of any company I know to understand their impact,” she argued, still very much on Facebook’s side, despite her recent departure. “And I think my worry is that people want ‘yes’ or ‘no’ answers to this question, but really these questions require a lot of nuance,” she added.

While the whistleblower, Frances Haugen, suggested that Facebook’s decision to prioritize user engagement through its algorithms was ultimately putting profits over people, Simo cautioned the choices weren’t quite as binary as have been described to date. She explained that making changes based on the research Facebook had invested in wasn’t just a matter of turning a dial and “all of a sudden, magically problems disappear — because Facebook is fundamentally a reflection of humanity,” she said.

Image Credits: Instacart

Instead, Simo said that the real issues at Facebook were around how every change Facebook makes can have significant societal applications at this point. It has to work to determine how it can improve upon the potentially problematic areas of its business without incidentally affecting other things along the way.

“When we discuss trade-offs, it’s usually trade-offs between two types of societal impacts,” she noted.

As an example, Simo used what would seem like a fairly straightforward adjustment to make: determine which posts make Facebook users angry then show people less of those.

As Haugen had testified, Facebook’s algorithms have been designed to reward engagement. That means posts with “likes” and other interactions spread more widely and are distributed higher up in people’s News Feeds. But she also said engagement doesn’t just come from likes and positive reactions. Engagement-based algorithms will ultimately prioritize clickbait and posts that make people angry. This, in turn, can help to boost the spread of posts eliciting stronger reactions, like misinformation or even toxic and violent content.

Simo, however, said it’s not as simple as it sounds to just dial down the anger across Facebook, as doing so would lead to another type of societal impact.

“You start digging in and you realize that the biggest societal movements were created out of anger,” she said. That led the company to question how it could make a change that could impact people’s activism.

(This isn’t quite how that situation unfolded, according to a report by the WSJ. Instead, when the algorithm was tweaked to prioritize personal posts over professionally produced content, publishers and political parties adjusted their posts toward outrage and sensationalism. And Zuckerberg resisted some of the proposed fixes to this problem, the report said.)

“That’s just a random example,” Simo said of the “anger” problem. “But literally, on every issue, there is always a trade-off that is another type of societal impact. And I can tell you for having been in these rooms for many, many years, it’s really never about like, ‘oh, are we doing the right thing for society, versus the right thing for Facebook and for profits’…the debate was really between some kinds of societal impact and another kind — which is a very hard debate to have as a private company.”

This, she added, was why Facebook wanted regulations.

“It’s not surprising that Facebook has been calling for regulation in this space for a very long time because they never want to be in a position of being the ones deciding which implications, which ramifications, which trade-offs they need to make between one type of societal impact and another type of societal impact. The governments are better positioned to do that,” she said.

Given the increasing amount of evidence coming out that Facebook itself understood, through its own internal research, that there were areas of its business that negatively impact society, Simo didn’t chalk up her departure from the social network to anything that was going on with Facebook itself.

Instead, she said she just wasn’t learning as much after 10 years with the company, and Instacart presented her with a great opportunity where she could learn “a different set of things,” she said.

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Facebook scales back its crypto ambitions once again – TechCrunch

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Facebook is launching a small pilot of its cryptocurrency wallet named Novi. A limited number of people in the U.S. and Guatemala can sign up to Novi and start using it.

Facebook is a founding member of the Diem Association. Instead of taking advantage of the association’s stablecoin (Diem) on the association’s blockchain (the Diem network), the company is partnering with Paxos and Coinbase to let users send and receive USDP, with Coinbase managing crypto custody. But this is just an intermediate step as Facebook still plans to replace USDP with Diem at some point.

Facebook originally had big plans for its crypto project. The company created a consortium of companies called the Libra Association. Together, they were supposed to launch the Libra cryptocurrency, a brand new currency tied to a basket of fiat currencies and securities. Originally, it wouldn’t be based on a single real-world currency, but on a mix of multiple currencies.

But Facebook faced strong opposition from many central banks — they feared that Libra would become a quasi-sovereign currency in some countries. Last year, the association announced that it would reduce its ambitions by focusing on single-currency stablecoins.

A stablecoin is a crypto asset with a fixed value that doesn’t fluctuate over time. For instance, the Libra Association wanted to launch the LibraUSD. One LibraUSD would always be worth one USD.

A few months later, the Libra Association announced some changes once again. The project was rebranded to the Diem Association. Similarly, Facebook’s wallet project was rebranded from Calibra to Novi. But neither Diem nor Novi were ready for prime time.

And now, Facebook is going to start testing Novi with some real users. The company is focusing on remittance between the U.S. and Guatemala. Novi users who want to send money can download the Novi app, create an account and add money using a payment method, such as a debit card.

Whenever you add USD, your money is converted to USDP without any fees. USDP is a stablecoin tied to USD created by Paxos. It used to be called the Pax Dollar (PAX), but Paxos recently rebranded it to USDP.

Behind the scenes, USDP is backed by cash and cash equivalents to ensure its value. User funds are managed by Coinbase Custody, meaning that Coinbase stores USDP funds for Novi users.

Novi users can then send USDP to other Novi users. Once again, there are no fees involved with money transfers. But chances are you can’t use Novi to pay in store or pay your rent. That’s why users can withdraw their Novi balance at a cash location, or transfer their balance to a bank account.

But Novi doesn’t say if there are fees involved when you convert your USDP to Guatemalan quetzal. So we’re back to square one, as Novi has to pick an exchange rate, which involves spread, liquidity and other variables. Novi also has to create fiat-to-crypto on-ramps and off-ramps across all markets where it wants to operate.

Facebook says that this is just the beginning for Novi. First, it is only available as a pilot for some users in Guatemala and the U.S. (except Alaska, Nevada, New York and the U.S. Virgin Islands). Second, Facebook and the Diem Association haven’t shelved plans to launch their own cryptocurrency at some point.

“I do want to be clear that our support for Diem hasn’t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live. We care about interoperability and we want to do it right,” Novi project lead David Marcus said on Twitter.

Facebook unveiled the Libra cryptocurrency in June 2019. The crypto ecosystem has changed drastically since then. In particular, some stablecoins have become incredibly popular — Tether and USD Coin have a combined circulating supply of more than $100 billion right now. So it’s going to be interesting to see if Diem can catch up with existing stablecoins and unlock some new use cases.

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Instagram is adding ‘Collabs,’ new music features for Reels, desktop posting and more – TechCrunch

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Instagram today announced a number of new features that will roll out this week across both the Instagram Feed and its TikTok competitor, Reels. The creator-focused additions will allow users to collaborate with one another, raise funds, and make better use of music on Reels, among other things. The company will also make its Instagram desktop website more usable, by allowing people to finally be able to post both photos and videos under one minute in length using their desktop web browser.

The latter has been a long-requested new feature, the company notes, and will become available to global audiences as of Thursday, October 21.

The company had previously tested the feature this summer, but it was not widely available.

Image Credits: Instagram

The other new features will drop throughout the week, starting today with “Collabs.”

Instagram describes this feature as a “test,” explaining that it will allow people to co-author both Feed posts and Reels. To do so, users can invite another account to be a collaborator from the tagging screen on Instagram. If the other person accepts, both accounts will appear in the post or the Reels header and content will be shared to both sets of followers. Although Instagram is only announcing the test today, many Instagram users have already spotted the feature in the app, as the company began a small-scale global test of this feature back in July.

At the time, Instagram said only a small number of people would have access to the feature, and it didn’t indicate when it would roll out more broadly.

When two creators choose to collab, the post or Reel will appear on both their Profile Grids and it will have a shared view count, like count and comment thread, Instagram says.

On Wednesday, Instagram will also begin to test a new way to create fundraisers for nonprofits, with the introduction of a feature that lets you start the fundraiser directly from the creation button (the “+” plus button at the top right of the screen.). When you tap this option, instead of selecting Post, Story, Reels, or Live, you’ll see an option to select a nonprofit and add the fundraiser to your Feed post.

Instagram has supported fundraisers for some time, even adding support for nonprofit fundraising during livestreams last year. But it hadn’t before offering a way to create a fundraiser from a standalone spot right from your Instagram profile.

This feature had been spotted ahead of this week’s launch by developer and reverse engineer Alessandro Paluzzi, who found the new fundraiser button in development back in September.

Two other new additions are meant to enhance Instagram Reels, when used with music.

On Thursday, Instagram will introduce two new effects called Superbeat and Dynamic Lyrics, which will help creators who edit and perform using music on Reels. Superbeat will intelligently apply special effects to music to the beat of the user’s song while Dynamic Lyrics will display 3D lyrics that will flow with the song’s “groove,” says Instagram.

These new features follow TikTok’s rollout of a half dozen interactive music effects back in April, including several that add visual effects synced the beat of a song. Reels, meanwhile, has offered a much more limited selection of first-party creative effects until now, instead relying on its community to expand its library beyond the basics like a timer or speed adjustment tool, for instance.

The Reels features will arrive alongside posting from the desktop, which Instagram says will be limited to photos and videos under one minute in length. The company this month dropped its IGTV brand for long-form video, but still allows for videos up to 60 minutes.  That’s now just considered “Instagram Video” — a term that includes anything that’s not video in a Story or in Reels.

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