Think Like a Bank: What Is Facebook’s Exposure to Risky Revenue?
A bit more financial transparency would be a solid first step. Until then it’s hard to know just how precarious the business model is.
It should be possible to follow the money.
Photographer: David Paul Morris/Bloomberg
What’s a troubled social network to do? Facing a crisis of confidence, Facebook appears to struggle to take actions on its own, whether out of uncertainty or stubbornness, and it’s not clear a divided Congress and the Trump administration could agree on regulatory actions to force its hand.
One simple first step would be a bit more financial transparency. Inspired by troubled financial firms over the past decade, the company could disclose revenue from various ad sectors, the way banks reported loan exposure to the mortgage industry a decade ago or the energy industry a few years ago. That would give all interested parties a better idea about how big a part of Facebook’s business relates to activities that may be problematic.