By: Aahoo Pourang
On Monday, October 4, Facebook experienced a six-hour outage that extended to Instagram and WhatsApp. While active social media users ran to other apps like Twitter, TikTok, or Snapchat, Facebook not only became the center of all jokes, but the company lost in more ways than one.
What was considered the largest outage ever tracked since 2008 cost the company about $164,000 per minute on top of an already falling stock, erasing $40 billion market cap and taking $6 billion from Mark Zuckerberg’s pocket.
The timing of Monday’s outage and declining stock could not have been any worse. On Sunday night, “60 Minutes” aired an interview with a former Facebook data scientist, Frances Haugen, who alleged that Facebook valued profit over safety when it came to misinformation and hate speech. She also stated that Facebook was lying to investors on how the company handled its problems. Haugen went on to say that the company constantly faced conflicts of interests when it came to what was good for the public and what was good for Facebook, and how over time, Facebook would prioritize its own interests over its users.
Her interview made a lot of shareholders reluctant and concerned over out-of-touch management teams and arising governance issues, especially after the Senate Commerce subcommittee on consumer protection urged Facebook to end its plans on offering child-safe version of Instagram.
The next day, Facebook went completely dark, losing access to its webpage, Instagram, WhatsApp, and all messaging systems connected to the app for a little over six hours. According to MarketWatch, the outage cost an average of $163,565 per minute, which totals over $60 million for the amount of time the company went dark. But what Facebook lost in the outage is minimal compared to how much the company lost in the market.
Shares fell about 5%, equaling to $47.3 billion, and $6 billion from Mark Zuckerberg’s pocket. Zuckerberg lost so much that he dropped from 5th to sixth richest person. But according to Jessica Gonzolaz, Free Press co-CEO, the financial loss is just a “drop in the bucket” for the tech company, since it didn’t earn revenue in a linear way like a lot of other major tech companies.
It’s important to note that while a six-hour social media outage would not affect the entire stock market, more instances like today will be seen in the foreseeable future, and it’s important for small businesses who rely on social media to be prepared. What other outlets can they rely on that isn’t within Facebook’s web of social media? How much confidential information are on these social networks that can be protected? Although Facebook paid a hefty price for today’s outage and stock decline, users don’t and shouldn’t have to.