In the past 24 hours Facebook (NASDAQ: FB) has done something very creepy and alarming in Australia. It suddenly prevented all of its users inside of that country from seeing any news stories on their newsfeed and has also blocked them from sharing them. It’s a shocking action.
At the same time, users such as myself who live outside of Australia are being blocked from Facebook from sharing any Australian news stories as an attempt to black out what they are doing and to punish Australian news outlets.
Facebook in effect is attempting to wage war on news companies in Australia, because of a proposed law in their parliament to force internet media companies that profit off of news outlets to pay small fees for the information.
Government communications Minister Paul Fletcher said, ““This announcement from Facebook, if they were to maintain this position, of course would call into question the credibility of the platform in terms of the news on it. Effectively Facebook is saying to Australians information that you see on our platforms does not come from organizations that have editorial policies or fact-checking processes or journalists who are paid to do the work they do.”
Google has said that it will work with the government of Australia and news outlets in that country on this issue, while Facebook has entered a game of chicken, betting that its users are so addicted to its apps that they won’t be able to stop using them no matter what the company does and that the news companies will start to beg Facebook to let them by on to their feeds.
I’m not a huge fan of either company, but I must say that Facebook has had a history of actions that show complete contempt for businesses and news outlets that use its platform and this is simply another example of it.
All one has to do to see the difference between how the two companies deal with news publishers and content creators is take a look at the Google New initiatives and how its positions itself on its website to the way Facebook deals with publishers with threatening proclamations and edicts, in which it tends to portray itself as a victim and then claim that it makes no money with news showing up in its newsfeed so doesn’t really care about you. I can tell you that the people that I know personally that most frequently use Facebook to the point of addiction do so by sharing and commenting on news stories nonstop. They often end up getting angry from what they see and driven to keep going back in a cycle of anger that stimulates them just as nicotine in cigarettes keep people buying them despite the negative health impacts.
Is this a reason to sell the stock if you own it?
For decisions like that I look at the charts and Facebook is now lagging the S&P 500 while other sectors and stocks are doing better. This is what the relative strength plot on the bottom of this chart is showing.
From a technical perspective Facebook (NASDAQ: FB) is trading in a triangle pattern near its 200-day moving average. Volatility is shrinking slowly in the stock and likely to do so in the coming weeks. I wouldn’t expect the stock to do much one way or the other for now, but this pattern could easily result in a breakdown later this year. Let’s face it, it’s a creepy platform and company.
I don’t understand why CNBC, Bloomberg, and other financial outlets are not speaking out against Facebook’s actions.