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Facebook's New Security Measure Targets Page Administrators

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Facebook (FB - Free Report) is strengthening its initiatives related to improving transparency and security on its platform. The social media giant recently announced its plans to bring in new security features for Pages that have a large number of U.S. followers.

Page managers are required to verify their accounts by completing a two-step verification process. The process involves disclosing their location, which will be made visible to users following the Page.

Per TechCrunch, the latest measure comes after Facebook discovered campaigns that were built to politically influence users before the upcoming U.S. mid-term elections. Reportedly, the company has erased 17 profiles, 8 Pages and 7 Instagram accounts related to the campaigns.

Facebook owned Instagram will also be secured with similar features in the coming weeks.

Facebook, Inc. Revenue (TTM)

 

Facebook, Inc. Revenue (TTM) | Facebook, Inc. Quote

Will Facebook’s Measures Ensure User Safety?

Facebook has been investing heavily to secure its platform after being criticized about its data privacy issues.

The company is investing in artificial intelligence (AI) to prevent false news, hate speech, suicide attempts and other abuses from spreading quickly. Notably, its AI technology is successful in identifying 99% of terror content before anyone notices it.

Facebook has also appointed employees to keep a close watch on online campaigns to combat data leak threats in addition to its investments in AI. Additionally, talks of Facebook using blockchain technology for securing the data handling process are also doing the rounds.

Despite the attempts to tackle data privacy and fake account issues, investors’ are becoming increasingly concerned about Facebook’s user growth amid increasing competition from the  likes of  Twitter (TWTR - Free Report) and Snap (SNAP - Free Report) for advertising dollars.

Are Investors Losing Confidence in Facebook?

Facebook suffered its worst ever one-day drop of nearly 19% on Jul 25, following disappointing second-quarter results and near-term guidance. This erased nearly $120 billion from the stock’s market capitalization, the largest one-day drop in the history of the American stock market.

Notably, Facebook managed to add only 22 million users worldwide in the second quarter, its lowest quarter-over-quarter jump since early 2011. The slowdown was primarily due to increased concerns over data privacy, security and fake news issues that Facebook has been encountering lately.

Moreover, weaker guidance for the period through 2019 due to deceleration in revenues and acceleration in expenses does not bode well for investors.

We believe that slowdown in Stories and Messenger monetization is likely to hurt top-line growth. Moreover, Facebook’s aggressive investment amid increasing competition is expected to hurt profitability in the near term.

Zacks Rank & Stock to Consider

Facebook currently carries a Zacks Rank #5 (Strong Sell).

Adobe Systems (ADBE - Free Report) is a better-ranked stock in the broader Computer and Technology sector, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for Adobe Systems is 16.4%.

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