By Matt Egan, CNN Business
Updated: Wed, 27 Oct 2021 14:01:45 GMT
Source: CNN Business
Venture capitalist Roger McNamee says Corporate America shares blame for the troubles that exist today at Facebook.
"What they are doing is willfully turning a blind eye to catastrophic problems that would not exist if they were not willing to advertise on these platforms," McNamee, an early investor in Facebook, told CNN on Tuesday in a phone interview. "The major advertisers have a lot of guilt here."
McNamee, who began advising Facebook co-founder Mark Zuckerberg in early 2006, said the problem is that the vast majority of companies prioritize maximizing shareholder value instead of what's good for society.
"They allowed themselves to get addicted to the convenience of the products, so they go along with it," said McNamee, who co-founded venture capital firm Elevation Partners.
Facebook generated $28.3 billion in advertising revenue during the third quarter alone, the company said Monday. That's up by 33% from a year ago and underscores the vast scale of a platform that has a staggering 1.9 billion daily active users.
"Facebook is terrible, but I have to maximize shareholder value, so I have to use it. They tell themselves this is not their fault. It's really Facebook's. No, it is your fault," McNamee said.
'More work to do'
The comments come after a consortium of 17 US news organizations began publishing articles based on the Facebook Papers, a trove of hundreds of internal documents that were included in disclosures made to the Securities and Exchange Commission and provided to Congress in redacted form by Facebook whistleblower Frances Haugen's legal counsel. The consortium, which includes CNN, reviewed the redacted versions received by Congress.
CNN's coverage includes stories about how coordinated groups on Facebook sow discord and violence, including on January 6, as well as Facebook's challenges moderating content in some non-English-speaking countries, and how human traffickers have used its platforms to exploit people.
In a statement, a Facebook spokesperson said the company's "work on safety and security is the most comprehensive effort to remove hate speech of any major consumer technology company."
"We have more than 40,000 people focused on this and are on track to spend more than $5 billion on safety and security in 2021. While we have more work to do, we remain committed to getting this right," the Facebook spokesperson said.
Sonnenfeld: 'They must sever ties'
Still, Jeffrey Sonnenfeld, a professor at the Yale School of Management who regularly talks to CEOs about controversial topics, called for business leaders to take action following the recent revelations at Facebook.
"They must sever ties as they are complicit tacitly with some of the worst human atrocities, human rights violations and subversion of democracy," Sonnenfeld told CNN on Monday.
But major companies are not the only source of Facebook's ad revenue. Countless small businesses rely on Facebook to reach customers. And these smaller firms may not have the luxury of saying goodbye to the unparalleled reach of Facebook.
That means Facebook is no longer reliant on huge ad spends from major brands. It has an army of small-and-pop advertisers to fall back on.
Hundreds of companies joined an ad boycott against Facebook last year that was organized by Stop Hate for Profit, a campaign that aimed to hold the company accountable for failures to address the incitement of violence on the platform.
"You may see one again," McNamee, who advises Stop Hate for Profit, said of a potential ad boycott of Facebook. "I wouldn't rule it out."
Jonathan Greenblatt, the CEO of the Anti-Defamation League, which helped launch Stop Hate for Profit, told CNN on Monday that the ADL is in talks with members of its coalition to "explore the appropriate response" to the Facebook Papers. "There are things advertisers can do to demonstrate their discontent," Greenblatt said.
Although many companies resumed advertising on Facebook after pausing last year during the boycott, some brands have not returned.
Patagonia told CNN on Monday that it halted advertising on Facebook and Instagram in June 2020 and has no plans to resume ad spending on the platforms.
Advertisers "do have leverage," McNamee said. "They're just choosing not to use it."