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Facebook (FB), in the headlines recently for all the wrong reasons, is in uncharted territory for reasons partly of its own making, prominent technology entrepreneur Alexis Ohanian told Yahoo Finance.
Whistleblower Frances Haugen, who told lawmakers how her former employer puts profits ahead of the mental well being of its users, sparked a firestorm that was followed by a worldwide outage at Facebook and its apps Instagram and WhatsApp.
Afterward, CEO Mark Zuckerberg reportedly signed off on an internal effort to push pro-Facebook content on users’ News Feeds. They’re just the latest in a string of scandals to plague the world’s top social media platform.
“We’re in territory that I don’t think any of us expected,” Ohanian, who co-founded Reddit, told Yahoo Finance Live in an interview this week.
“I started Reddit in 2005 and Zuck started Facebook in 2003. We were building things that we thought we would like and other college kids would like, and the reality is it’s having much bigger implications on far more people than we ever expected," he added.
When asked if Zuckerberg should step down as Facebook’s CEO, Ohanian answered with a question, “Does that come down to the shareholders voting? I don’t know,” he said.
“It disappoints me when leaders lead by reacting as opposed to making hard decisions and leading from the front lines as opposed to just being reactive to press cycles or outcry," Ohanian said. "Part of that comes from the responsibility of accepting the reality of what an impact these platforms are having.”
Zuckerberg under pressure as 'gulf' widens
Less than two years after he helped create Reddit, Ohanian sold the company to publisher Conde Nast for $10 million. In its most recent funding round in August, Reddit was valued at $10 billion. The platform, which has become the site of choice for meme stock investors, is reportedly mulling an IPO sometime next year.
Zuckerberg is expected to face renewed calls from shareholders to ease his iron grip on the company he founded, and finally split his roles of CEO and chairman.
Despite the recent controversies, shares of Facebook are still up by double-digits year-to-date, as investors continue to bet that regulators won’t clamp down on the social networking giant that now boasts nearly 2.9 billion users.
Ohanian, who is married to tennis star Serena Williams and is co-founder of the venture capitalist firm Seven Seven Six, said lawmakers are at an “inherent disadvantage” because they don’t fully understand the technology they’re trying to regulate.
He pointed to a recent exchange that went viral on Twitter, in which Senator Richard Blumenthal grills a Facebook executive asking, “Will you commit to ending Finsta?”
Facebook’s safety chief explained that “finsta” is slang to describe a private Instagram account created by teens to interact with a trusted group of friends.
During a Senate hearing, Facebook safety chief explains to Sen. Blumenthal that Finsta is slang for a fake account.
The hearing follows reports that the platform knew of mental health harm to teens https://t.co/J7f4BJktZB pic.twitter.com/gesXv02qKC
— Bloomberg TV (@BloombergTV) September 30, 2021
“There is such a gulf between the folks who understand the technology and the folks regulating it in almost all cases,” Ohanian said, “which presents a really big challenge because well-intentioned regulation can have really unintended consequences.”
Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.