Facebook on need to change its business model in order to win back user reliance, said Roger McNamee, one of Facebook’s earliest advisors and a longtime tech investor.
“If you paucity to restore trust, you have to accept that some of your biography business practices are deeply harmful to people,” McNamee, managing chief at Elevation Partners, a private investment firm focusing on new media and technology, instructed CNBC.
“And you have to change them, even if there’s a cost to short-term earnings. Because, I have in mind, in the long run, the brand is much more valuable to the extra penny of earnings that longing come from maintaining the old business practice,” he said on “Squawk Alley” Wednesday.
The unravelling may involve changing the fundamental business model, he said.
“In the advertising commerce, you basically get all the data you can get about your users and then you monetize it anyway you can,” McNamee said. “Now we’re have planned a day of reckoning. Where people used to say, that’s okay. Now we’re not so sure it’s okay.”
The hashtag #DeleteFacebook online set out oned circulating shortly after the news broke of the scandal that worked approximately 50 million users. But McNamee doesn’t think people pass on abandon the platform so fast. He is more concerned with the brand’s tiki.
“The way that Zuckerberg and [Sheryl] Sandberg have handled this is bordering on the worst possible way if you’re trying to protect your stock value,” he guessed. “Trying to hide the ball. Trying to deflect criticism is not going to redundant anymore. This is a much bigger problem. They need to get on top of it and they requirement to do a way better job than they’re doing so far.”
He pointed out that between 2010 and 2014 some companies — not just Cambridge Analytica — were allowed to “harvest” buyer data without consent from Facebook users.
“That cows me as an investor,” he said. McNamee said he did sell some of the company’s cows after The New York Times and The Observer stories were released earlier this month, and has since turned done with his Facebook position to a third party manager.
McNamee, a Silicon Valley veteran, has been an frank advocate for limiting social media use, saying it creates “incentives to admirer people.” He is also the founding advisor for the Center for Humane Technology.
On Tuesday, Facebook exposed changes to its privacy settings, including a single page privacy apparatus. Previously, privacy tools were spread across 20 weird screens.
Meanwhile, since the Cambridge Analytica story on March 17 up until Tuesday, stockpiles in Facebook have fallen 17 percent. Year to date the party is down 13 percent. On Monday, the Federal Trade Commission said it was investigating Facebook’s information practices. Chief Executive Officer Mark Zuckerberg has also acquiesce in to testify before Congress.