Sep 252012
 September 25, 2012  Posted by  Business

How much did privacy concerns contribute to a 10% drop in Facebook’s stock  price yesterday?

Lord knows that I am no stock analyst, but is it just coincidence that yesterday saw a deluge of news reports and online comments about an alleged privacy breach by Facebook that exposed private messages in timelines?  By the end of the day, Facebook’s stock price had dropped 10%, a drop that was attributed in part to that privacy issue.  Even though Facebook promptly denied the allegations and offered a statement suggesting that users were wrong and that those “private messages” were actually public wall postings, the furor continued.  Even today, France summoned Facebook to the CNIL to discuss the matter.

A 10% hit is significant, and even if a stock rebounds, to the extent that consumers really do care about their privacy, companies need to take note. Yesterday, Facebook got a lot of bad press on privacy – not just the private messages in timeline accusation but also reports about its partnership with DataLogix.   So is it really a coincidence that their stock price dropped 10% or is there a lesson to be learned? What do you think?

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