Tuesday, March 2, 2021

Melbourne fund manager dumps Facebook

Melbourne fund manager dumps Facebook

“But they both agree social media has a problem. And they want to clamp down on it.”

Mr Griffin said at the heart of the problem is an ideological perspective driven by chief executive Mark Zuckerberg that includes abdicating responsibility for monitoring content.

“Most media in the world is liable to what’s on their platform and Facebook is not,” he said. “Inevitably we expect that to change.

“It’s that issue around hate speech, extreme content, fake news that’s making Facebook public enemy number one for every single government on the planet right now.


“This problem, unfortunately, is unique to Facebook.”

The fund’s investment strategy is anchored in identifying structural shifts in society and picking global stocks that can harness the fastest growth.

Mr Griffin said the company was a profitable business with over 1 billion users globally “that look at it pretty much every single day” but its refusal to negotiate, like Google had done in Australia, would continue to create headaches.

“Facebook is making nearly $100 billion in revenue today. And if you look at what Google settled for, it’s $30 million per publisher.

“In the grand scheme of things, I don’t think it’s going to cost Facebook that much money. It’s not going to change the business model too much if this goes global,” he said of the Australian Competition and Consumer Commission’s news media bargaining code.

“I think they’re doing it on principle,” he said. “And its this stance that has caused most of their recent issues.


“We would argue the management team are stretched in the way they’re fighting battles.”

He said Facebook could benefit from appointing more independent directors, adding the fund would consider re-entering the stock once it pivots to e-commerce and messaging apps in the future.

“The financial model of Facebook is not broken, it’s still a powerful business, it will be with us for a long time,” he said. “But they’re probably at a bit of an identity crisis as to the role they play.”

“If they can solve the issues around hate speech and how they’re going to deal with content on their platform, to the extent that would make advertisers happy and consumers happy, that overhang would be removed, we may come back.”

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