Sputnik: What is the real extent of correlation between Facebook's share plunge and Cambridge Analytica scandal?
Daniel Ives: They have specific challenges just in terms of user growth, engagement on the platform and advertising, which is their break and butter – that’s how they got to a $50 billion annual advertising fortress. Cambridge […] has added to the headwind and I think that confluence of events all sort of hit this past quarter, and that just really blindsided [Wall] Street in terms of just how negative it was.
Sputnik: To what degree does the increase of Facebook’s expenses in the wake of the scandal make the company less attractive to investors. What’s your take on that?
North America has been stagnant. […] across Europe. And I think now it’s a huge groovy period for Zuckerberg and Facebook to get investors back on board.
Sputnik: Experts are saying that Facebook could rely more on Messenger, Instagram, WhatsApp, you have mentioned those platforms in terms of increasing revenues – how much of a potential do these apps have as an advertising platform?
Daniel Ives: The best thing they have going for them is Instagram. Instagram has been the crown jewel of the platform – just massive growth. The question is can that growth be used to equalize some of the soft spots that they are seeing on the core platform.
Those are the things that they have going well. The big issue is what’s happening on the core platform in terms of slowing user growth and engagement in advertising. That’s what they have to fix in the coming six to nine months, to make sure that this is just a big speed bump, rather than hitting a brick wall.