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Facebook’s Mark Zuckerberg speaks during an interview in Washington on Sept. 18, 2013.

JIM WATSON/AFP/Getty Images

This last week has been something of a public relations disaster for Facebook, and the stock has taken a tumble. It's fallen from about US$185 to below US$170, and while the shares actually rose slightly on Wednesday, many experts believe the downward trend will continue.

For those unfamiliar, the story of a major privacy problem became public starting last Friday and has been developing since. Some social media experts and consumers are suggesting people delete their Facebook accounts and abandon the company's communication platform altogether.

Is Facebook doomed, or is this a great chance to buy a dominant leader at a discount? While I can't promise I'll be correct, my vote is the latter. I'm a shareholder and I have no intentions of selling. I may just buy more if the stock plunge continues.

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First, let's do a quick recap of what's going on in the media with respect to this privacy issue.

In 2013, Facebook's developer interface allowed for app creators to get access to significantly more user data, and data of users' friends, than is possible today.

To make a long story short, a company known as GSR created a quiz app, and this allowed them to collect data on millions of Facebook users. It is alleged that GSR shared this data with a firm known as Cambridge Analytica, who worked on the Trump election campaign.

Facebook reports that they discovered this inappropriate use of data in 2015, and had the parties involved sign legal documents declaring they'd deleted all of it. Facebook now has reason to believe these data weren't actually deleted. Hence the uproar over privacy.

But most major problems, even huge problems, are eventually forgotten provided they are effectively handled. A classic Canadian example is the Listeria bacteria outbreak at a Maple Leaf Foods plant in 2008. This outbreak was serious. It killed 22 people. But the company handled the crisis well and the effect on its stock price was temporary. As sad as it is, even when death is involved, the public at large tends to forget problems that are satisfactorily resolved.

This Facebook privacy problem has actually been dealt with back in 2014. It was then that Facebook decided not to give app developers nearly as much access to user data. From my own observations, it seems Facebook has become quite restrictive on what it now shares.

My take is quite simple. I think Facebook screwed up in 2013 by allowing developers to access too much data. While the consequence of this was only visible to Facebook in 2015 and to the public in 2018, they actually plugged the holes back in 2014, so it's already ancient history. It was a mistake that was effectively solved years ago. I think the public will quickly move on.

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Today, I pay a lot of attention to how marketers use Facebook, and I'm very excited about the opportunity. One major trend is the use of Facebook Messenger for businesses to speak with and sell to consumers.

Remember how we used to call up a company and navigate through a complex menu of touch-tone options to get information and be connected with the right person? All of that is now easy to do using an automated chat bot in Facebook Messenger. And soon, companies will be able to take your credit card payments right from the Messenger app.

Many experts believe that Facebook Messenger will become more dominant than e-mail for marketing purposes – with the added benefit that users will ultimately control who is allowed to connect with them and who is not.

It's no wonder that, in my experience, any serious marketer is very carefully considering how to leverage Facebook's tools, and how to use those tools to build an audience.

I'm fully satisfied that Facebook has solved the source of its privacy issues back in 2014. And I'm more convinced than ever that the Facebook platform is a marketer's dream come true. That's why I will remain a shareholder, and quite possibly buy more stock.

Chris Umiastowski, P. Eng., MBA, has over a decade of professional experience analyzing technology stocks as a former top-ranked equity analyst on Bay Street.

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The acting democratic institutions minister says the Liberals are 'open' to ideas on strengthening privacy laws after reports Facebook user data was used for political gain. Scott Brison says Ottawa has reached out to the company. The Canadian Press
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