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Facebook faces huge economic losses due to data leakage

Original title: FB's advertising revenue may decrease by US $2 billion due to the data leakage incident

Daniel ives, chief strategy officer of GBH insights, believes that 3% of the company's annual advertising revenue is at risk due to Facebook's improper handling of data and involvement in the scandal. These revenues could be lost, ranging from $1 billion to $2 billion.

GBH's tech tracker investigated the public's emotional reaction to Facebook and found that Facebook's reputation was seriously damaged. As a result of the scandal, 15% of users decided to leave the Facebook platform, Ives said.

Ives also said the investigation led his team to believe that Facebook could lose a lot of revenue. GBH insights believes that at present, the loss is still within the controllable range.

At the hearing, Facebook CEO Zuckerberg stressed the importance of advertising to the company's business model. The senator once asked Zuckerberg how the Facebook online platform can survive if users are not willing to pay. Zuckerberg said: 'through advertising. Facebook said in its annual report at the beginning of the year: 'the revenue from selling advertising space to marketers accounts for a large share of total revenue. '

Last week, Facebook coo Sandberg told NBC news that users may have to pay if they don't want their data to be used to send targeted ads. Zuckerberg later added that there would always be a free version of Facebook. He added that Facebook wants to connect everyone in the world, and the advertising model best matches that mission, because Facebook wants to provide free services that everyone can afford.

Ives said that if the promotion of paid subscription service, in theory, user data privacy can be better protected, but it may affect the entire business model of Facebook. Ives believes it's important for the company to maintain the integrity of Facebook's strategy in the coming months.

According to ives, the whole industry will wake up under the influence of the Cambridge analytics scandal, and he believes that eventually the industry will strengthen its supervision.

Other social platforms may strengthen self-regulation and advertising will become more transparent, Ives said. In addition, if the implementation of strict regulatory policies, may bring many unexpected consequences. Supervision may be severe or moderate. Ives warned that there was no supervision in this industry originally. If the supervision becomes too severe, it may be a dangerous thing, which is equivalent to opening the 'Pandora's box'.

Still, GBH is confident of Facebook, giving it a 'very attractive' rating.