Facebook (FB - Free Report) shareholders were proved powerless at the annual meeting, a Pew teen survey showed that teens continue to move away from the platform, exclusive news content for Watch appears to be on the way even as fresh regulatory issues made headlines last week:
Facebook Shareholder Meeting
All eight Facebook director nominees were elected at its annual meeting, while all six shareholder proposals were rejected.
Voting tallies show that a whopping 83% of outside votes were cast in favor of changing the voting system wherein Zuckerberg controls around 60% of the voting rights. Support for Zuckerberg and Sheryl Sandberg was low at around 65%. It’s obvious that investors, both big and small, are unhappy with the way the company is being run, but the voting structure prevents them from taking any corrective action.
Facebook's management opposed all the shareholder proposals, so given Zuckerberg’s control over the company, it was easy to reject them.
The shareholder proposals involved reporting on "fake news" controversies, closing gender pay gaps, adopting responsible tax principles, establishing a board committee on risk management and two proposals that would in effect have Facebook adopting simple majority voting at shareholder meetings.
Norges Bank Investment Management, which runs the world's largest sovereign wealth fund, backed all six shareholder proposals. Proxy adviser Institutional Shareholder Services backed five of the six proposals, while advising against appointment of five Facebook directors including Zuckerberg. Vanguard Group Inc and Fidelity Investments didn’t comment on their votes.
Facebook earlier said that it had adopted the Rooney Rule to bring diversity to its board.
Teens Continue to Dump Facebook
A Pew Research survey of 750 teens during a one-month period this spring indicates that Facebook’s popularity with teens continues to decline. Pew said that there are more options today than there were a few years back, which could be partly responsible for the decline.
And in case you’re wondering if this is a backlash from the privacy problems at the social network that also isn’t true. The survey showed that teens generally have a positive feeling about the impact of social media with a third of them saying it was good for society and 44% staying neutral.
The survey also included YouTube in the mix this time, which wasn’t considered back in 2015 when the last such survey took place.
Around 95% of teens have access to a smartphone and 45% are practically always online. So it must be at least a little disheartening for Facebook that 85% of teens said they use YouTube, ahead of 72% for Facebook’s Instagram, 69% for Snapchat, 51% for Facebook (down from 71% in the 2015 survey) and 32% for Twitter.
Moreover, when asked which apps they used most often, Snapchat topped the list at 35%, followed by YouTube with 32% and Instagram 15%. Only 10% said they used Facebook most often and 3% chose Twitter. Acquiring Instagram does appear to have been a solid decision.
The survey also showed that around 97% of boys and 83% of girls are now gamers.
Facebook Watch Developments
Facebook is on the verge of acquiring exclusive news shows from a number of providers including Fox News and CNN for its video-focused Watch platform that officially launched last summer.
Now, people familiar with the matter are saying that the Fox show will be hosted by Shepard Smith, but further details aren’t available. Group Nine Media’s Now This is expected to start shows later this year. Talks are also on with News Corp’s Dow Jones & Co., BuzzFeed and digital-media company ATTN.
News shows from trusted players might take some of the heat off Facebook for allowing fake news to proliferate on the platform.
New Zealand Privacy Regulator Peeved
Facebook got on the wrong side of New Zealand’s Privacy Commissioner John Edwards after it refused to comply with an order to submit data relating to certain individuals. Facebook at the time said that the country was subject to Irish laws on privacy and local laws wouldn’t apply.
Later, Facebook changed its terms of service and said that U.S. laws would apply to the country along with international markets, since the company was domiciled in the U.S. New Zealand is now rewriting its own privacy laws, so Facebook can be forced to comply.
Papua New Guinea Banning Facebook
Papua New Guinea, the island nation near Australia, is shutting down Facebook for a month to study the impact of the social network on its people and crack down on the fake accounts, false news and other information that is free-flowing across the platform. Since the Internet penetration is reportedly very low at around 12%, there is unlikely to be a huge impact.
Trending Feature Scrapped
Facebook has finally decided to scrap the trending news feature that has been a source of embarrassment for the company. Initially rolled out to help users quickly find interesting content that their friends and contacts might also be interested in, the feature has at times promoted 9/11 conspiracy theories, a false story about then-Fox News host Megyn Kelly, and a parody news article about magical iPhone features.
Facebook has also been pulled up for promoting a certain political viewpoint through the feature. Moreover, getting rid of human curators only worsened the problem. So it’s good to say goodbye.
Facebook shares have a Zacks Rank #3 (Hold). Stocks worth buying in the same industry are Baidu (BIDU - Free Report) , The Trade desk (TTD - Free Report) , 21Vianet Group (VNET - Free Report) , Akamai Technologies (AKAM - Free Report) and Dropbox (DBX - Free Report) . You can also take a look at the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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