When Facebook Inc. (NASDAQ: FB) reports third-quarter results after markets close today, analysts expect the company to post a 17% increase in earnings per share and a whopping 40% jump in revenues. In early trading Wednesday morning, shares traded above the 52-week high the company posted on Tuesday.
Speaking of Tuesday, that’s the day the Facebook, Alphabet Inc. (NASDAQ: GOOGL) and Twitter Inc. (NYSE: TWTR) sent a bevy of lawyers to testify before the U.S. Senate’s judiciary committee regarding their roles in spreading Russian disinformation in the run-up to last year’s presidential election. The company getting the most attention was Facebook, which admitted that as many as 126 million U.S. users received ads and stories posted by Russian interlopers.
Facebook Vice-President and General Counsel Colin Stretch told the hearing that the company plans to double its current staff of 10,000 people working on security issues by the end of next year. For a company that reported 20,658 employees at the end of June, that’s a big commitment.
Senator Al Franken (D-MN) asked the salient question:
How does Facebook, which prides itself on being able to process billions of data points and instantly transform them into personal connections for its users, somehow not make the connection that electoral ads, paid for in roubles, were coming from Russia?
Further questions might have been, “And how will 10,000 more sets of eyeballs change that? Are there really 10,000 competent censors/reviewers just waiting around for these promised jobs?”
The answer to these questions might be forcing Facebook to figure out a way to vet accounts, whether ad buyers or individuals, that use the information the social media giant gathers on its users. Vetting these accounts manually will simply be too expensive to be a long-term solution, even for Facebook, which is tabbed to post third-quarter revenues of nearly $10 billion. After all, if Facebook can gather reams of data about its users so that it can target them for advertisers — and charge the advertisers more for that targeting — surely the company can do a better job of vetting accounts.
So far, Facebook, Google and Twitter have successfully resisted regulation and additional disclosure by citing free speech and privacy, but when nearly half the U.S. population was shown ads and stories paid for by a foreign government in an effort to influence a U.S. election, more accountability has once more been put firmly on the table. Dodging the issue with some high-minded rhetoric about freedom and privacy is not going to play well any longer.