Market Overview

Zuckerberg Tells Facebook Employees He's Not Going To Change Policies In Response To Advertiser Boycott

Zuckerberg Tells Facebook Employees He's Not Going To Change Policies In Response To Advertiser Boycott

Facebook Inc (NASDAQ: FB) CEO Mark Zuckerberg weighed in on the growing advertising boycott centered around the company and told employees that he was reluctant to bow to pressure and was not worried about the withdrawal of advertisers.

What Happened

The Facebook chief executive said, “We’re not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue,” reported MarketWatch.

The comments by Zuckerberg were first reported by The Information, an online tech publication. 

On the topic of acceding to the demand of the boycotters, Zuckerberg said, “Usually I tend to think that if someone goes out there and threatens you to do something, that actually kind of puts you in a box where in some ways it’s even harder to do what they want because now it looks like you’re capitulating, and that sets up bad long-term incentives for others to do that [to you] as well.”

Why It Matters

Companies such as Verizon Communications (NYSE: VZ), VF Corp, (NYSE: VFC) Starbucks Corporation (NASDAQ: SBUX), Unilever NV (NYSE: UN) are either boycotting social media or have joined the #StopHateForProfit campaign, supported by multiple civil rights organizations.

The campaign claims 70% of Facebook’s $70 billion is made through advertising and is urging advertisers to take a stand against hate speech on the social network. 

Francis Corbett, a Silicon Valley communications strategy consultant, told MarketWatch, “By pulling ads, they save money and make a low-risk statement that results in positive publicity and marketing for their brands among constituents.”

Rohit Kulkarni, executive director at MKM Partners, claimed that the boycott would affect less than 5% of Facebook’s revenue.

Price Action

On Thursday, Facebook shares closed 4.62% higher at $237.55.

Image: Wikimedia


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