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No crisis here! Facebook staff are all smiles at Allen & Co despite a horror year


It’s been a tough year for Facebook, but you’d never know from the beaming smiles of Mark Zuckerberg and fellow executives at Sun Valley this week.   

Zuckerberg, Facebook VP Dan Rose and COO Sheryl Sandberg joined some of the world’s most powerful and influential people from the media, finance, technology and political spheres for the exclusive Allen & Co conference.

The week of events and networking in the Idaho sunshine may offer the executives a chance to forget about a horror year for the social media giant. 

Facebook saw millions wiped from its market value amid a wave of controversies, including privacy violations, fake news and even electoral interference. 

There have even been demands from shareholders for Zuckerberg to stand down as chairman.

All smiles: Facebook's Mark Zuckerberg, Dan Rose and Sheryl Sandberg seemed to have forgotten about their besieged company's troubles as they attended the Sun Valley conference on Thursday 

All smiles: Facebook’s Mark Zuckerberg, Dan Rose and Sheryl Sandberg seemed to have forgotten about their besieged company’s troubles as they attended the Sun Valley conference on Thursday 

Zuckerberg, Facebook VP Dan Rose and COO Sheryl Sandberg joined some of the world's most powerful and influential people from the media, finance, technology and political spheres for the exclusive conference

Zuckerberg, Facebook VP Dan Rose and COO Sheryl Sandberg joined some of the world’s most powerful and influential people from the media, finance, technology and political spheres for the exclusive conference

The biggest scandal of the year was the huge privacy breach by communications firm Cambridge Analytica.

The company profited from a feature that meant apps could ask for permission to access your own data as well as the data of all your Facebook friends.

Earlier this year, it was revealed that the firm obtained data about 87 million Facebook users without their knowledge or consent.  

The controversy led to Zuckerberg taking out full-page ads in nine major US and British newspapers to apologize.

The ads, done in simple black text against a plain white background, were headlined: ‘We have a responsibility to protect your information. If we can’t, we don’t deserve it.’

The week of events and networking in the Idaho sunshine may offer the executives a chance to forget about one of the hardest years the social media giant has faced so far. In April, Mark Zuckerberg had to testify in front of Congress over a major privacy breach (pictured)

‘This was a breach of trust, and I’m sorry we didn’t do more at the time. We’re now taking steps to make sure this doesn’t happen again.’

Zuckerberg’s mea culpa came after a terrible week for the social media giant, which saw its shares fall 13 percent to below $160 – the company’s worst week in the stock market since July 2012. 

The scandal also saw Zuckerberg dragged in front of Congress to testify about the major breach.

The Facebook chief accepted responsibility for the social network’s failure to protect private data and prevent manipulation of the platform in the Congressional testimony on April 9.

‘We didn’t take a broad enough view of our responsibility, and that was a big mistake. It was my mistake, and I’m sorry,’ Zuckerberg said in his written testimony released by a House of Representatives panel. ‘I started Facebook, I run it, and I’m responsible for what happens here.’

In his written remarks, Zuckerberg called Facebook ‘an idealistic and optimistic company’ and but acknowledged that ‘it’s clear now that we didn’t do enough to prevent these tools from being used for harm as well. 

‘That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy.’

The biggest scandal of the year was the huge privacy breach by c ommunications firm Cambridge Analytica. The scandal saw Zuckerberg take out full-page ads in nine major US and British newspapers to apologize (pictured)

The biggest scandal of the year was the huge privacy breach by c ommunications firm Cambridge Analytica. The scandal saw Zuckerberg take out full-page ads in nine major US and British newspapers to apologize (pictured)

WHAT IS THE CAMBRIDGE ANALYTICA SCANDAL?

Communications firm Cambridge Analytica has offices in London, New York, Washington, as well as Brazil and Malaysia.

The company boasts it can ‘find your voters and move them to action’ through data-driven campaigns and a team that includes data scientists and behavioural psychologists.

‘Within the United States alone, we have played a pivotal role in winning presidential races as well as congressional and state elections,’ with data on more than 230 million American voters, Cambridge Analytica claims on its website.

The company profited from a feature that meant apps could ask for permission to access your own data as well as the data of all your Facebook friends.

The data firm suspended its chief executive, Alexander Nix (pictured), after recordings emerged of him making a series of controversial claims, including boasts that Cambridge Analytica had a pivotal role in the election of Donald Trump

The data firm suspended its chief executive, Alexander Nix (pictured), after recordings emerged of him making a series of controversial claims, including boasts that Cambridge Analytica had a pivotal role in the election of Donald Trump

This meant the company was able to mine the information of 87 million Facebook users even though just 270,000 people gave them permission to do so.

This was designed to help them create software that can predict and influence voters’ choices at the ballot box.

The data firm suspended its chief executive, Alexander Nix, after recordings emerged of him making a series of controversial claims, including boasts that Cambridge Analytica had a pivotal role in the election of Donald Trump.

This information is said to have been used to help the Brexit campaign in the UK.

Facebook has also been under intense pressure to crack down on fake news being spread across its website, since it was found that Russian actors’ propaganda had influenced the 2016 election.

Over the past year, Facebook has been reevaluating how news is shared on its platform, from promoting more posts from family and friends, to prioritizing news from local publishers.

The tech giant eventually acknowledged that ads that ran on the company’s social media platform and have been linked to a Russian internet agency were seen by an estimated 10 million people before and after the 2016 US presidential election

But when the claims first emerged after the election, Zuckerberg had been dismissive.  

‘Of all the content on Facebook, more than 99 per cent of what people see is authentic’, he said at the time, adding the company should not rush into fact-checking. 

But Zuckerberg soon came under fire after it emerged fake news had helped sway the election results.

Facebook has also been under intense pressure to crack down on fake news being spread across its website

The company rolled out a ‘Disputed’ flagging system for users in December 2016, which they hailed as a success in April 2017, saying fake news had decreased. 

But it soon emerged that Facebook was not providing the full story. By July that year, Oxford researchers found Facebook was playing a major role in spreading fake news. 

In September 2017  Facebook finally admitted during congressional questioning that a Russian propaganda mill had placed adverts on Facebook to sway voters around the 2016 campaign, and in December 2017, Facebook admitted that its flagging system for fake news was a failure.

Since then, it has used third-party fact-checkers to identify hoaxes, and then given such stories less prominence in the Facebook News Feed when people share links to them.

The series of scandals appears to have shaken shareholders’ confidence in founder and CEO Zuckerberg.

Last month six Facebook investors with almost $6 billion in the company between them, demanded the billionaire relinquish his role as chairman to allow an independent executive to be hired in his place. They also want a change in how voting rights are distributed among shareholders to lessen his power.

HOW MANY AMERICANS SAW RUSSIA’S DIVISIVE ADS DURING THE 2016 US PRESIDENTIAL ELECTION?

Facebook says ads that ran on the company’s social media platform and have been linked to a Russian internet agency were seen by an estimated 10 million people before and after the 2016 US presidential election.

The company turned 3,000 ads over to three congressional committees in October 2017 as part of their investigations into Russian influence in the 2016 election.

In a company blog post, Facebook’s Elliot Schrage said the ads appeared to focus on divisive social and political messages, including LGBT issues, immigration and gun rights. 

In many cases, the ads encouraged people to follow pages on those issues.

Facebook said last month that the ads appear to have come from accounts associated with a Russian entity called the Internet Research Agency.

Fewer than half of the ads – which ran between 2015 and 2017 – were seen before the election, with 56 percent of them seen after the election. 

The bid to topple the 34-year-old follows growing anger about his ‘dictatorship’ over the company.

In recent weeks, Zuckerberg faced a grilling at an angry shareholder meeting, where they warned the company risked becoming a ‘corporate dictatorship’.

The billionaire executive was urged to ‘take a page from history’ and ’emulate Washington, not Putin’, during the heated encounter.

One investor argued that Facebook’s recent Cambridge Analytica data scandal was tantamount to a human rights violation. 

Will Lana of Trillium Asset Management said that his firm had identified ‘at least 15 distinct controversies’ facing the company.

He argued for a change to the board’s approach to risk management to avoid further scandal.

Facebook risked becoming a ‘corporate dictatorship,’ James McRitchie, another of the company’s investors, told Zuckerberg.

‘Mr Zuckerberg, take a page from history,’ McRitchie added. ‘Emulate George Washington, not Vladimir Putin.’

Yet on Thursday, all the trials and tribulations at Facebook HQ seemed forgotten as a very social Zuckerberg got his networking on in a big way at the Allen & Company conference in Sun Valley

Yet on Thursday, all the trials and tribulations at Facebook HQ seemed forgotten as a very social Zuckerberg got his networking on in a big way at the Allen & Company conference in Sun Valley

Zuckerberg rubbed shoulders with Felicia Horowitz, founder of Horowitz Family Foundation and wife of venture capitalist Ben Horowitz, Thomas Staggs, former chief operating officer of The Walt Disney Company, and Haim Saban, chairman of Univision Communications and chief executive of the Saban Capital Group 

Zuckerberg rubbed shoulders with Felicia Horowitz, founder of Horowitz Family Foundation and wife of venture capitalist Ben Horowitz, Thomas Staggs, former chief operating officer of The Walt Disney Company, and Haim Saban, chairman of Univision Communications and chief executive of the Saban Capital Group 

New York in the house: Mark Zuckerberg was seen with Senator Chuck Schumer and his wife in Sun Valley on Thursday

New York in the house: Mark Zuckerberg was seen with Senator Chuck Schumer and his wife in Sun Valley on Thursday

Last month Facebook investor Michael Frerichs told Business Insider that Zuckerberg fulfilling both roles as CEO and chairman of the board, means he is ‘answerable to no one’, Illinois state treasurer and Facebook investor Michael Frerichs told Business Insider.

The tycoon’s control is compounded by his voting rights. Facebook shares come in two classes, with class B shares wielding 10 times the voting power of class A ones.

Three-quarters of class B shares are owned by Zuckerberg, meaning he commands more than half of the company’s voting power.

Patrick Doherty, the director of corporate governance at the office of the New York comptroller, which oversees more than $1 billion in Facebook stock, slammed the set-up as a dangerous throwback.

‘The idea that there should be an autocrat in charge of a gigantic public company, which has billions of dollars of shareholder money invested in it, is an anachronism,’ Doherty said. 

‘It harks back to the 19th century when you had these robber barons who were autocrats and dictators.’

Yet on Thursday, all the trials and tribulations at Facebook HQ seemed forgotten as  a very social Zuckerberg got his networking on in a big way at the Allen & Company conference in Sun Valley.

The Facebook founder was spotted chatting to New York senator Chuck Schumer and his wife as well as NFL commissioner Roger Goodell in between sessions at the Idaho campus.

Networking: Zuckerberg also took spent some time rubbing elbows with Roger Goodell at the event (above)

Networking: Zuckerberg also took spent some time rubbing elbows with Roger Goodell at the event (above)

Family ties: Rupert and Lachlan Murdoch were seen heading to a session at the Allen & Co conference early Thursday morning (above)

Family ties: Jeff Bezos hangs with John Elkann on Thursday (left);  Rupert and Lachlan Murdoch were seen heading to a session at the Allen & Co conference early Thursday morning (right)

Understated luxury: Diane von Furstenberg (above on Thursday) has returned for another years with her husband Barry Diller, and one more hosted a pop-up shop to sell her wears to guests

Understated luxury: Diane von Furstenberg (above on Thursday) has returned for another years with her husband Barry Diller, and one more hosted a pop-up shop to sell her wears to guests

Model mayhem: Jerry Hall (above on Thursday) is attending the Allen & Company conference in Sun Valley this week, with the model part of a new crop of stylish guests

Model mayhem: Jerry Hall (above on Thursday) is attending the Allen & Company conference in Sun Valley this week, with the model part of a new crop of stylish guests

Stacey Bendet on Wednesday morning

Punky Brewster: Stacey Bendet, the creative director and CEO of Alice & Olivia is also in Sun Valley with her husband Eric Eisner, and has donned six looks in 48 hours (Tuesday afternoon on left, Wednesday morning on right) 

Jeff Bezos was in a rather loquacious mood as well it appeared, as he engaged in conversation with Fiat heir John Elkann, whose brother Lapo has been at the center of a number of scandals.

And Kathryn Murdoch was also spotted on campus, but not her husband James. 

The event also got a glimmer of glamour thanks to the Valley ‘wags’; with Diane Von Furstenberg, Jerry Hall Stacey Bendet and Tamara Mellon among the well-heeled high-rollers in attendance.

Allen & Company began privately funding the annual conference back in 1983, but it was not until 1994 that the event really took off when The Walt Disney Company’s deal to acquire ABC was put into motion at the event.

The deal was brokered by Warren Buffet, who brought together Tom Murphy and Michael Eisner, then the head of Disney.  Twenty-four years later Eisner is back at the conference, as is his daughter-in-law Bendet.

The two major stories out of Idaho revolve around the feuding board at CBS and the merger of Fox and ABC.

Two of the key players behind that sale were seen on campus Thursday morning as billionaire Rupert Murdoch headed off to an early morning session with son Lachlan by his side.

The pair will be meeting up with Bob Iger while at the conference, who is the chairman and CEO of The Walt Disney Company, which owns ABC. 

 

 

 



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