Facebook CEO Mark Zuckerberg delivers the keynote speech at F8
Mark Zuckerberg's personal wealth has fallen by nearly $7 billion in a few hours, knocking him down a notch on the list of the world's richest people, after a whistleblower came forward and outages took Facebook's flagship products offline. Image Credit: AP

Dubai: Has Mark Zuckerberg been punished enough? Or are investors in the mood to hand out some more pain to Facebook and its founder?

Losing $7 billion of his networth in a matter of hours after Facebook - and the WhatsApp and Instagram portals that it owns – suffered a six-hour outage should be construed as heavy punishment by itself. But some UAE business owners, especially those in F&B and who rely on Facebook for part of their orders, were not willing to be that generous. Those six hours when Facebook was down did eat into their Monday end-of-day takeaway, especially those orders streaming in through Facebook.

Stock - Jeffrey Halley, Oanda
Jeffrey Halley, Senior Market Analyst for Asia-Pacific markets at Oanda: "In all honesty, I believe that we are going to have a very choppy week and that equities will bounce around on the massive swings of intra-day sentiment this week. I put that down to a thin Tier-1 data calendar this week until Friday, and so it is important not to get swept up in the day-to-day noise."
Will this time be different?
This time, though, the pain for Facebook could run deeper. There is a US Congressional hearing scheduled for later today, where a former employee will outline how Facebook was aware of the impact some of its operational ways hurt impressionable users.

But Jeffrey Halley, Senior Market Analyst for Asia-Pacific markets at the consultancy Oanda, is willing to take a wide-angle perspective on all of this. “Technology has been on a huge rally since March 2020, and in that context, tech stocks could fall a long way and still be in a longer-term bull market,” said Halley. “Rather than looking at technology in isolation, it should be noted that stocks, as a whole, retreated.

“I believe that the direction of technology stocks will be resolved by the outcome of this Friday's US non-farm payrolls number. A higher than 500,000 print will lock-and-load the Fed taper for December, and as markets price in that reality, technology stocks will likely continue lower into Q4. Until then, I would not write off buying the dip!”

Lost in outage

According to Rayyan Rizvi, Managing Director of YOko Sizzlers, “We receive an average of 3-4 table bookings through Facebook – unfortunately, last night, we received none. Yes, they are an important part of the business, but to rely on them completely will have their cons.

We make sure that the customers can always contact us through direct calls.

- Rayyan Rizvi, Managing Director of YOko Sizzlers

Rely on old ways

That’s right, during those six hours, local businesses fell back on Plan B, as representing by a customer calling in rather than get through via a social media portal.

“The enquiries we get via our WhatsApp for Business got delayed; instead phone calls were a good way of communicating the same,” said Eti Bhasin, owner of Dhaba Lane and Old Castello Jumeirah.

Definitely, in terms of our marketing via social pages of our evening entertainment events, we did lose out a considerable amount of customer visibility.

- Eti Bhasin, owner of Dhaba Lane and Old Castello Jumeirah

All three in one go

“In a 24-hour connected world, an outage of one channel or another would normally not have a major impact on us,” said Julianne Holt-Kailihiwa, CEO of Sumo International Inc.. “But three major vehicles - WhatsApp, Facebook and Instagram - for marketing reach and direct communication with customers was certainly felt.

The sales impact was not significant to our brand as we started years back working with a robust loyalty app for direct ordering as well as a call centre.

- Julianne Holt-Kailihiwa, CEO of Sumo International Inc.
Candid Wuest of Acronis
"Having a fall back communication method ready can minimize inconvenience for customers," said Candid Wuest of Acronis.
What caused the outage?
"Given the current information, it does not look like an external cyber-attack. But we can’t yet eliminate that there was an external or even insider threat involved. We need Facebook to provide more information on the disruption to answer this."

"As this relates to the servers of Facebook and all data is hosted there, there is nothing anyone [at the UAE level] can do but be ready with having the data used on the app backed up locally and simply diversify the apps being used."

Candid Wuest of Acronis

Temporary blips

Zuckerberg has been no stranger to seeing a few billions knocked off his networth each time Facebook has had revelations of its inner workings to deal with.

With Facebook – Google, Amazon, Apple, et al – analysts have this been there, done that mindset. These tech stocks have been through extreme swings in the past – but there is always something that brings investors back with renewed vigour.

Which is why Vijay Valecha, Chief Investment Officer at Century Financial, insists that “though Facebook is always in the middle of some controversy, Its shares have managed to outperform over the long term. Previous controversies have hurt Facebook’s share price temporarily - but none had a permanent impact as revenues and profit growth remained intact.

Last year, an advertising boycott by a coalition of US civil rights organizations forced some global brands not to advertise on the Facebook platform. Even that didn’t impact the company much, and its share recovered eventually.

- Vijay Valecha, Chief Investment Officer at Century Financial