The social media giant’s stock is down by as much as 20% after a blog post by CEO Mark Zuckerberg sparked a global backlash over the company’s advertising policy.
Facebook said it was reviewing its policies and was taking the issue seriously, though some analysts were quick to question whether the company was really in a position to change its practices without the public outcry.
“I don’t think the public has much of a stake in Facebook’s business practices,” Jefferies analyst Mark Schroeder said in a note to clients.
Schroeder noted that Facebook’s ad revenue is only about 1% of its $23.6 billion in revenue.
He noted that other online businesses like Amazon, eBay and eBay Prime have had their ads removed from sites with the highest ad revenue.
“It’s not a lot of money to lose if you’re willing to make the change,” Schroeder added.
“The public has little understanding of the companies business practices and it’s only gotten worse as we’ve been able to learn more about it.
The more we learn, the more we understand, the less we’re comfortable with it.”
In addition to a Facebook policy that prohibits “promotion of a product or service in the form of advertising” in ads for which there is “no direct benefit to the buyer,” the company also prohibits “direct promotion of products or services” by “advertising through third-party services.”
According to the company, the policy applies to any advertisement that “directly benefits a third-parties’ business or is made to appear to benefit the buyer.”
The blog post also includes a number of “silly” suggestions for Facebook’s advertising policies that, if implemented, could lead to a $1 billion loss.
One of those suggestions is to change the terms of Facebook’s AdSense contracts, which require the company to make ads appear in a certain amount of time before they appear in third-Party search results.
That is something Facebook has been trying to do for years.
In 2014, the company implemented a similar policy that allowed it to keep some ads in a limited amount of times to show up in search results in certain cases.
But many advertisers, like the New York Times, have been asking Facebook to make that change in recent months, and the company has repeatedly denied that it was changing its advertising policies.