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By: Thomas Podrasky | tap5517@psu.edu | March 14, 2019
Two key Facebook executives announced Thursday that they would be leaving the company in the wake of Mr. Zuckerberg’s intended switch in strategy to focus more on private messaging. Chris Cox, the Chief Product Officer, stated that he would be departing in order to open up his position for someone who is a better fit for the CEO’s new game plan. In addition, Chris Daniels, the head of Whatsapp, also handed in his resignation in the wake of the proposed changes.
Mr. Zuckerberg’s new vision involves deviating from public sharing in order to develop and enhance private messaging platforms. A few key ideas he has illustrated is the planned addition of encrypted facebook messaging and ephemeral conversations that disappear after a short amount of time, perhaps similar to Snapchat’s model. While the reasoning for this switch is not 100 percent clear due to Facebook’s tight grasp on its user data, many speculate a plateau in Facebook users is the cause. In addition, industry research suggests that private social-media chat groups are on the rise.
Despite Mr. Zuckerberg's broad ambitions, concerns have been raised over the absence of a clear business plan. One of the main questions that are being raised is that of revenue generation. 98 percent of Facebook’s revenue comes from advertising. Transitioning focus away from public sharing to private messaging will likely mean that Facebook will have to develop and incorporate new ways of producing income.
The social media mogul’s change in approach and reorganization of key leadership raises quite a few questions regarding the company’s future. Investors are likely to see a dip in the price of Facebook’s stock when the markets reopen on Friday, although this should come as no surprise to most. The important thing to monitor in the coming months will be the release of the company’s game plan for carrying out their newfound aspirations, especially their solution for counteracting the potential loss in advertising revenue.
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