Americans’ relationship with Facebook has shifted to “It’s Complicated.”
Facebook bears have been having a fantastic third quarter as the stock has wiped out more than $130 billion in market cap. And for anybody brave (or foolhardy) enough to short the FAANG heavy weight, their year was only made better by Wednesday's Congressional testimony by Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg. During the hours-long ordeal (Unlike Sandberg, Dorsey attended two hearings), Senator Mark Warner's threats of looming regulation - "Congress will have to set social media regulation" - weighed on the Nasdaq as Facebook and other major constituents sunk like a stone.
While Sandberg projected an aura of poise for the duration of her grilling by the Senate Intelligence Committee, she made several notable flubs (particularly her clumsy handling of Kamala Harris's prodding questions about Facebook's efforts to contain hate speech), which only furthered the market's distress. And in the latest sign that the furor ignited earlier this year by the Cambridge Analytica scandal has yet to die down (and indeed may have permanently damaged Facebook's brand), the Pew Research Center made the bombshell claim that one in four Facebook users have now deleted the company's mobile app from their phones. The claim was made in a study published Wednesday.
What's worse, that number becomes much more significant when the focus is on 18-29-year-olds - 44% of that demographic say they've deleted the app. Declines among older users were much lower (12%). But of course young people are the most treasured demographic for social media firms because of their reputation as trend-setters. In another sign that Cambridge Analytica has made Americans more privacy-conscious (and thus more likely to deprive Facebook of valuable user data), the study claimed that just over half of Facebook users age 18 or older - 54% - said they have adjusted their privacy settings in the past 12 months, according to Pew, which collected the survey data between May 29 and June 11. Meanwhile, 42% of users say they've taken a break from checking the platform for a period of several weeks or more.
All told, some 74% of Facebook users say they have taken at least one of these three actions in the past year. And while Republicans and conservatives are (justifiably) more skeptical of bias exhibited by Facebook and other social media giants, the data show that both Democrats and Republicans were equally likely to have deleted Facebook's app or slowed or stopped their usage of the platform.
To be sure, Facebook's problems began even before the user-privacy scandal: User-engagement data collected by Cowen's showed a significant drop in engagement during the first quarter - a sign that users are spending less and less time using Facebook. Of course, the teens have long since migrated to Snapchat and (Facebook owned) Instagram. This latest study is just another discouraging sign that one of the pioneers of the social media landscape is finally seeing its luster fade.