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Facebook Hasn't Changed Much (Except for the Name)

Facebook marks an important milestone in its long and controversial journey.
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Do you remember where you were on May 18, 2012?

Barack Obama was in the White House back then and on that day he was meeting with then-French President Francois Hollande for the first time ahead of the G8 Summit, which was starting that evening at Camp David.

'Geek King of a Generation'

Meanwhile, nearly 3,000 miles away in Menlo Park, Calif., a young man named Mark Zuckerberg rang a bell.

The self-taught computer programmer--described by ABC News as "the Geek King of a Generation"--was announcing the first day of trading for the social media company he had co-founded, Facebook, now known as Meta Platforms  (FB) - Get Meta Platforms Inc. Report, and the reverberations of the bell are still being felt today.

"The first day of trading for FB had a delayed opening because Nasdaq’s systems were overwhelmed by the buy orders that high-frequency traders kept submitting and cancelling," said Jay Ritter, professor at the University of Florida's Warrington College of Business. 

"Then there was an additional glitch in which some investors were not notified in a timely manner that their orders had been executed, so they bought more shares than they wanted to."

Facebook had an offer price of $38.00 and closed at $38.23 on the first day of trading, Ritter said. 

The stock price then dropped to below $19 over the next six months on investor concerns about whether they would be able to monetize users that were increasingly using their phones to access Facebook. 

"But the stock has certainly done extremely well in the next 9.5 years, exceeding expectations," Ritter said.

'A Mixed Bag'

How well? On May 18, 2022, Facebook was trading at nearly $200 a share with a market capitalization of about $536 billion.

But that was down about 47% from the all-time closing price of $382.18 on Sept. 7, 2021.

And just a few months earlier, on June 28, Meta had reached a market capitalization of $1 trillion.

It has been a journey for the social networking service originally launched as FaceMash in 2003 and membership was limited to Harvard University students.

Meta has spread around the world, reporting 2.936 billion monthly active users in April. Along the way, the company acquired Instagram, WhatsApp, and Oculus, and Zuckerberg is still at the helm as chairman and CEO. 

But Meta has also been the subject of controversy and scorn. 

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"The only person who hasn’t been harmed by Facebook’s IPO is Mark Zuckerberg," said Jennifer Grygiel, associate professor of communications at Syracuse University.

"Facebook has in many ways completely reshaped the way we understand ourselves and how we interact with others," said David Schmid, associate professor of English at the University at Buffalo College of Arts and Sciences. "So, as with anything that's had that big an impact, it's a mixed bag."

Schmid said the pros include the way it enables us to keep in touch with friends and family around the world, share news and information quickly and efficiently, and possibly counter feelings of isolation, which was especially important during the pandemic.

"Cons include time-wasting, privacy concerns," he said, "and, arguably, the way Facebook, like other forms of social media, intensifies the 'bubble effect,' whereby we only interact with people who support and confirm our view of the world."

'A Much Stronger Stand'

Schmid said this is a real concern, especially in the wake of the mass shooting in Buffalo, NY-- --where authorities said 10 people were killed by an 18-year-old white man who believed in the racist "Great Replacement" theory--and the role that online radicalization appears to have played in the perpetrator's life.

"It remains to be seen whether meaningful change will take place, but I think FB could be taking a much stronger stand than it currently is to counter the availability of misinformation," he said.

Meta did not immediately respond to a request for comment.

There have been numerous scandals controversies over the years, including the case of the British consulting firm Cambridge Analytica, which collected data from millions of Facebook profiles and used it to help the presidential campaigns of Senator Ted Cruz and Donald Trump, who went on to win the election.

The company apologized for their role in the data harvesting and Zuckerberg testified in front of Congress.

Three years later, Facebook reached an agreement with the Federal Trade Commission where the company would pay a $5 billion penalty over privacy violations.

Arguably the company's biggest blow to date came last year from Frances Haugen, a former product manager, who revealed herself as the whistleblower behind a series of documents leaked to the Wall Street Journal during an interview on the CBS show "60 Minutes." 

Haugen, who would later testify before Senate lawmakers, accused the social media giant of putting profits over the impact of hate speech.

“There were conflicts of interest between what was good for the public and what was good for Facebook,” she said. “Facebook over and over again chose to optimize for its own interests like making more money.”

Facebook denied the allegations, stating that "to suggest we encourage bad content and do nothing is just not true ... We continue to make significant improvements to tackle the spread of misinformation and harmful content."

'We're Addicted'

The company changed its name to Meta Platforms in October as it sought to move from its much-criticized social network and related family of apps and into Zuckerberg has called an "embodied Internet."

"Today we are seen as a social media company but in our DNA we're a company that builds technology to connect people and the metaverse is the next frontier just like social networking was when we got started,"  he said at the time.

The move to the metaverse proved to be costly to both Facebook and Zuckerberg, who lost $29.7 billion from his net worth in February and fell from the top 10 of the Bloomberg Billionaires Index down to 13th place.

On April 27, Meta Platforms posted a mixed set of first quarter results. 

The company reported the slowest revenue growth in ten years, but also saw a rebound in daily active users that offset a near $3 billion loss in its metaverse division and a softer-than-expected near-term forecast.

On that same day, Zuckerberg made $11 billion, the largest one-day gain he has ever had in his fortune. He's currently ranked 13th on the billionaire's hit parade with an estimated total net worth of $70.9 billion as of May 18.

Schmid dismissed the company's metaverse plan as "the ultimate cynical rebranding move, an obvious attempt to leave behind any negative associations people have with the Facebook brand."

"Not only will it not work, but I also think it's unnecessary, in the sense that millions of people hate Facebook and yet can't give it up," he said. 

Schmid said the writer William S. Burroughs once said that heroin is "the ideal product … the ultimate merchandise. No sales talk necessary. The client will crawl through a sewer and beg to buy.” 

"I think the same is true of Facebook," Schmid said. "We're addicted."