Facebook Will Be Next

Facebook Will Be Next

We have long questioned the integrity of the reported user metrics disclosed by Twitter (TWTR) and Facebook (FB), as it relates to the number of fake user accounts in a given reporting period (See our recent article Elon Musk Does Perform Due Diligence). A recent Twitter study by SparkToro and Followerwonk claim that 19% of active accounts are fake or spam. What does this suggest about Facebook user accounts?

Our view is that institutional investors ought to be concerned about the issue of fake and spam accounts on social media platforms given that the number of active users is the primary valuation driver. Ad buyers have been concerned for years about this issue as Ad buyers want every dollar of spend to reach real users within the target cohort. Elon Musk’s proposed Twitter acquisition has brought this issue into the mainstream.

It is possible to analyze Twitter data given that Twitter makes certain data sets available to third parties through APIs. Facebook is not nearly as open a platform as Twitter and therefore it would not be possible to perform a similar analysis on facebook. Here is the link to the SparkToro and Followewonk study for those who may be interested: https://sparktoro.com/blog/sparktoro-followerwonk-joint-twitter-analysis-19-42-of-active-accounts-are-fake-or-spam/

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