Facebook CEO Mark Zuckerberg told employees that the company would not change its approach on hate speech despite more than 500 advertisers boycotting the platform this month, The Information reported Wednesday.
“We’re not gonna change our policies or approach on anything because of a threat to a small percent of our revenue, or to any percent of our revenue,” Zuckerberg said during a virtual town hall last week, according to The Information.
“My guess is that all these advertisers will be back on the platform soon enough,” he said, according to The Information, adding that the boycott was a “reputational and a partner issue” rather than a financial one because most of Facebook’s revenue comes from small businesses vs large brands.
Facebook saw $60 billion in market value erased in just two days earlier this week as major brands joined the boycott, but its shares have largely rebounded since then.
Earlier this month, civil rights groups including the NAACP, Anti-Defamation League, and Color of Change called for advertisers to boycott Facebook following Zuckerberg’s inaction on controversial posts by President Donald Trump suggesting violence against people protesting police brutality and systemic racism.
Since the campaign launched, more than 500 companies, including major brands like Coca-Cola, Ford, Starbucks, Verizon, Adidas, and Unilever, have pulled ads from the social media platform.
On Friday, as the boycott gained steam, Facebook said it would attach labels to “newsworthy” posts from politicians that violate its hate speech policies — a significant reversal for the company — and tighten up its rules for advertisers.
In an email to Business Insider, a Facebook spokesperson said: “We take these matters very seriously and respect the feedback from our partners. We’re making real progress keeping hate speech off our platform, and we don’t benefit from this kind of content. But as we’ve said, we make policy changes based on principles, not revenue pressures.”
With over 500 companies having now joined the advertising boycott of Facebook called for by top civil rights groups, some investors are concerned about the company’s lost revenue—but most Wall Street firms estimate that Facebook is still looking at less than a 5% hit to overall revenue.
In a scenario where the company loses business from its top 100 advertisers, that would only be around a $1 billion hit to revenue per month, Morgan Stanley analyst Brian Nowak estimates.
If the ad boycott only lasts one month, according to Citi analysts, the likely impact on Facebook’s stock is just $1 per share, and if Facebook is unable to convince the companies who are boycotting to resume business, the impact on its stock would be $17 per share, they estimate.
Raymond James analysts similarly believe the financial impact on Facebook during the third quarter will be “minimal” and they remain “optimistic” that the company’s recently announced changes will “help alleviate advertiser concerns.”