In the wake of the latest data leak in social media major Facebook, global firm Goldman Sachs says that the Mark Zuckerberg-run company is facing a level of uncertainty it hasn’t seen before. Interestingly, Goldman Sachs which currently has a buy rating on the shares of Facebook says that the long-term future of the company will be determined by the way in which they handle the ongoing scandal.
In an interview to CNBC, Heath Terry, lead internet research analyst at Goldman Sachs said that every fast-growing tech giant was likely to face a similar crisis, and pointed to the so-called click fraud scandal that threatened Google’s growth prospects in recent years. Interestingly, social media companies in the U.S. were already mulling to impose more stringent regulatory measures to mitigate such instances.
Heath Terry notes that while heightened regulatory measures regarding online political ads were now inevitable, the prospect of more stringent measures would be “something we have got to watch.” He added that such onerous regulatory measures could impact Facebook’s growth story.
The Social media giant has come under heightened scrutiny after media reports in the United States said that the user data of more than 50 million Facebook subscribers had been accessed by Cambridge Analytica, during US President Donald Trump’s 2016 campaign.
According to reports, Cambridge Analytica utlized user data to reach voters with hyper-targeted messaging, including on Facebook and other online services. Notably on Monday, after the news broke out, Facebook shares tumbled 6.8 percent resulting in company’s founder and CEO Mark Zuckerberg losing $6.06 billion losses in a single day. According to a Reuters report, the British Information Commission is seeking a warrant to raid offices of Cambridge Analytica.
According to a Bloomberg report, during the summer of 2014, the U.K. affiliate of political consulting firm Cambridge Analytica hired a Aleksandr Kogan, a researcher to gather basic profile information of Facebook users along with what they chose to “Like.” Further, about 270,000 Facebook subscribers, most or all of whom were reportedly paid a small amount, downloaded Kogan’s app, thisisyourdigitallife, which took the form of a personality survey, said the report.