Sunday, December 16, 2018

Facebook loses more users in Europe last quarter but is growing elsewhere

Facebook finds its user base had gone down in Europe the company reported as it announced its third-quarter earnings. This is the second quarter in a row that the company has lost users in Europe.

Reasons for the decline of users in Europe
Two reasons for the decline in Europe are the Cambridge Analytica privacy scandal and the implementation of the new continent-wide privacy law, the GDPR.
The Cambridge Analytica scandal
Wikipedia describes the Cambridge Analytica scandal as follows: "The Facebook–Cambridge Analytica data scandal was a major political scandal in early 2018 when it was revealed Cambridge Analytica had harvested the personal data of millions of people's Facebook profiles without their consent and used it for political purposes. It has been described as a watershed moment in the public understanding of personal data and precipitated a massive fall in Facebook's stock price and calls for tighter regulation of tech companies' use of data." This serious breach of privacy no doubt caused some users to simply stop using Facebook.
The General Data Protection Regulation (GDPR)
Wikipedia describes the GDPR: "The General Data Protection Regulation (EU) 2016/679 ("GDPR") is a regulation in EU law on data protection and privacy for all individuals within the European Union (EU) and the European Economic Area (EEA). It also addresses the export of personal data outside the EU and EEA areas. The GDPR aims primarily to give control to individuals over their personal data and to simplify the regulatory environment for international business by unifying the regulation within the EU.[1]" There can be huge fines for violating the GDPR.
You would think this regulation would bring in more users as it protects their privacy. However, it requires all users to inspect their privacy setting forcing users to acknowledge how much information they are allowing to be collected. This may have caused some users to simply stop being engaged with the likes of Facebook.
Facebook executives have said that they will follow Europe's lead on privacy regulation in the US. This could lead to future declines in the US,
The decline in Facebook users in Europe

In Europe the active number of Facebook users is 375 million whereas in the US it is just 242 million. Two million users have left Facebook on a monthly basis since the first quarter, and even more, 4 million, have abandoned it on a daily basis. The last quarter is the first in which the GDPR rules have been in force. In Quarter 1 to 3 the decline in Europe has been from 377 million to 375 million. The decline in daily active users has been from 282 million to 278 million. The decline in daily users in Europe from its peak to its recent low is about 1.4 percent. If this happened in the US it would mean the loss of about 3.4 million users.
In other areas Facebook usage is growing considerably
The anxiety about a decline in the US in Facebook users as well as Europe is a bit misguided it seems to me in that in the Asia Pacific region and the rest of the world the user base is growing substantially. The number of users in those areas is far larger than in the US and Europe. The markets in US and the EU may be more or less saturated and not likely to grow more in any event.
The Business Insider's own monthly active user's chart shows that in the last quarter the user base in the Asia-Pacific Region went from 894 million to 917 million over three times as many users as in the US and more than twice that of Europe. The rest of the world went from 723 million users to 736 million users. The total number of users went from 2,234 million users to 2,271 million users. So Facebook is actually still growing substantially world wide even though it has lost some users in Europe.
The Business Week article notes that Facebook usually reacts to user-growth numbers. In pre-market trading on Wednesday morning its stock price was up about 5 percent. The article suggests that declines from the GDPR were already priced in. Perhaps why the price went up is that the total number of users is up substantially in spite of the fact that Europe has lost users and growth is virtually flat in the US. Both areas are minor relative to the total user base of Facebook.

Previously published in Digital Journal

Thursday, December 13, 2018

Trump claims Twitter is suppressing his follower count

Donald Trump is again claiming without evidence that Twitter is suppressing his follower count due to their political bias. Apparently he made the claim after watching a Fox Business report on Twitter earnings.

Trump's complaint
Trump tweeted: “Twitter has removed many people from my account and, more importantly, they have seemingly done something that makes it much harder to join — they have stifled growth to a point where it is obvious to all. A few weeks ago it was a Rocket Ship, now it is a Blimp! Total Bias?”
As mentioned Trump made the complaint after watching his favorite TV channel Fox News. As Matthew Gertz of Media Matters pointed out Fox Business discussed Twitter's earnings report which showed that Twitter lost 9 million accounts last quarter which followed a loss of one million the quarter before.Twitter explains these losses due to a mass deletion of automated and spam accounts. It has been overcounting for years and is now attempting to correct the matter.
Twitter is removing fake accounts and trying to stop malicious behavior
A Twitter spokesperson told The Verge that “our focus is on the health of the service, and that includes work to remove fake accounts to prevent malicious behavior. Many prominent accounts have seen follower counts drop, but the result is higher confidence that the followers they have are real, engaged people.”
Twitter is harder to join
Since June Twitter has asked new users to confirm either an email address or a phone number. According to Twitter CEO Jack Dorsey this is a measure to reduce spam accounts. This is not that much of a burden for most people. This happened months ago along with the purging of many accounts.
Trump's followers' count is actually growing
Given the huge purging of accounts it would not be surprising if Trump's followers numbers were declining. Many prominent persons have found their follower numbers declining due to the purge. A decline in itself would not show bias. However in Trump's case Washington Post journalist Brian Fung checked and found that far from losing many people Trump's followers had increased over the course of this month.
Trump is wrong about Twitter changing from a rocket ship to a blimp
The earnings report on Fox is actually quite positive. Far from becoming a blimp now and a rocket ship before, this is the first year that Twitter has turned a profit. A recent Digital Journal article notes: "Twitter reported Thursday stronger-than-expected profits and revenues in the third quarter, igniting a strong rally in shares of the key social network. The San Francisco group delivered a $789 million profit, including one-time gains, compared to a net loss of $21 million in the previous year, as revenues grew 29 percent to $758 million." So in spite of losing so many accounts the firm is doing fine and much better than last year.
There are signs that Twitter filters show bias
Trump has before accused Twitter and other sites of mass-deleting real conservatives user's accounts as well as suppressing his follower count. There have been complaints about Twitter and other sites such as Facebook as filtering out conservative accounts. However, it seems that the bias is towards any strong anti-establishment view left or right. As discussed in a recent Digital Journal article some of those chosen to help filter out fake news such as the Atlantic Council are hardly neutral. As the appended video shows not just Twitter but Facebook also has been accused of bias in filtering out news posts. So behind the bravado boasting and downright lying, Trump's complaints do have a germ of truth, although he provides no evidence of personally being censored by Twitter or Facebook. In fact Twitter is one of Trump's favorite means of communication.

Previously published in Digital Journal on October 28

Facebook loses more users in Europe last quarter but is growing elsewhere

Facebook finds its user base had gone down in Europe the company reported as it announced its third-quarter earnings. This is the second qu...