Ironically, it may even increase the value of the stock. Ridding the producers of content is one thing.
But Ferrara at the University of Southern California says that number drastically underestimates the problem. Fake accounts are sowing division in Western democracies. Millions of fake accounts on Facebook and Twitter that spew vitriol and misinformation are finally prompting legislators and the public to come down on the companies.
Yet even the absolute number of bots obscure the full scope of the problem. That may not hurt Twitter or Facebook in the long run since some of the damage from fake accounts is baked into the stock price today. A previous version of this post misstated the spelling of Emilio Ferrara.
Executives fixated on user growth or lack thereof are focused on gaining and retaining new users, without much emphasis on deterring the fake ones. Managing the content is another. That metric has sent the valuations of Facebook and Twitter spiraling into the stratosphere and, from Twitter at least, back down to Earth , but it may no longer add up.
Mark Warner put the company on notice. At the moment, there is limited transparency and trust in the numbers the companies disclose, especially at Twitter.
The companies could deploy algorithms to weed out millions of fake accounts, and hire humans to restore real accounts snared by the bot dragnet Facebook recently said it would hire 1,000 contractors to better police ads and malicious targeting. No one knows how many fake accounts exist, but tens of millions on just Twitter and Facebook is likely conservative.
In the final months of the 2016 campaign, Buzzfeed found fake election stories outperformed factual coverage.
Even that number is low, they warn, because sophisticated AI-driven accounts can evade detection. Pachter agreed. Neither company permits outside researchers to verify their figures and the public companies divulge little in their regulatory filings.
Removing fake accounts might decrease total users, at least temporarily, but the effect would likely be offset by greater trust, giving advertisers and analysts better understanding of exactly who is on social media platforms. So long as Twitter and Facebook demonstrate user growth over time, and earn more revenue per user by increasing engagement, then their stock prices should emerge unscathed. Wall Street has a very simple way of pricing social media giants: Facebook and Snapchat reveal their daily active users DAU to investors each quarter, but Twitter has not done so, providing only percent growth of DAU.