Take public aim at Facebook’s ongoing privacy issues and you could just find yourself in a new job. No, that’s not a typo. Facebook has a tendency to offer its most outspoken critics positions of power within the organization rather than simply shading them out of online existence as other companies have been accused of doing. The most recent example of this unusual policy comes with the hires of two extremely vocal critics of the social media platform: Trump-appointed State Department official Jennifer Newstead and executive director of the Open Technology Institute Kevin Bankston. Both Newstead and Bankston have vocally criticized Facebook on numerous occasions and, analysts believe, could help the company deal with the Trump administration and GOP-controlled Senate (in Newstead’s case) and help control ongoing data and privacy scandals (in Bankston’s case).
Same Roles, a Different Stage
Bankston comes on board just in time to help Facebook deal with the fallout from a bug that may have exposed unposted photos taken by nearly 7 million users on Facebook and Instagram. The problem is multifaceted, since users are upset that unposted photos are stored at all and their ire is compounded now that those photos are public. When the story first broke, Facebook simply responded the images had been stored in drafts “to make it easier for someone to come back and post something if they have been interrupted.” Later, the company backtracked and said those images only are stored for three days. The truth of the matter is difficult to determine. The larger issue, however, is that those unposted images are sometimes made available to third-party developers that require a Facebook login.
Bankston concluded, “In the end and despite the scandals of the past few years, I believe that this company [Facebook] – which has accomplished the epochal task of putting free and powerful internet publishing tools and secure messaging tools in the hands of literally billions of people, and is likely to do so with billions more – still has the potential to radically transform the world for the better.”
Newstead, best known for steering the PATRIOT Act through Congress, has been appointed as Facebook’s general counsel. She explained her decision to work with Facebook relatively more succinctly than Bankston, posting simply, “I am looking forward to working with the team and outside experts and regulators on a range of legal issues.” She will replace the company’s former legal counsel, Colin Stretch, who has been planning to leave since last year.
The Facebook newsroom was a little more verbose, posting happily, “Jennifer is a seasoned leader whose global perspective and experience will help us fulfill our mission,” as Sheryl Sandberg, the company’s chief operating officer, put it. The platform also gloated about Newstead’s many senior roles in government at the Office of Management and Budget, the Department of Justice, the Supreme Court, and the U.S. Court of Appeals.
Privacy Critics Now a Threat to Your Privacy?
Newstead’s experience in crafting and ultimately helping pass the PATRIOT Act could make her a perilous addition to the Facebook family, critics of the hire warn. She has long advocated for more powerful electronic surveillance options when it comes to national security, and the PATRIOT Act also allows intelligence agencies to request specific user data from sources like Facebook without the authorization of a court or judge. Many companies fight these requests; if Facebook accedes, it could receive leniency in other areas. Furthermore, since Newstead will be positioned to block or enable those requests in many cases, her sympathies may lie with the government rather than users.
The Strategy Seems to be Working
Whatever the reason Facebook is so eager to hire its critics and opponents, the strategy seems to be working. Analysts are presently predicting Facebook will report $15 billion in revenue with adjusted profits of $1.62 per share. Last year, the company reported $12 billion in revenue at this time.
Tell us what you think:
- Are these good hires for Facebook?
- Do Newstead and/or Bankston have Facebook user interests at heart?
- Are you still active on social media? Why?
Thank you for reading the Bryan Ellis Investing Letter!
Your comments and questions are welcomed below.