With incidents of data breach becoming increasingly prevalent, going forward the credibility of social networking platforms will depend on their ability to plug the security loopholes. Recent developments indicate that leaving such issues unchecked could be a costly affair for the companies.
After Facebook (FB) and Google (GOOG) lost significant market value earlier this year, after multiple incidents of data breach, Twitter (TWTR) followed suit this week by shedding about 7% amidst reports that the site was hacked.
It was the biggest intraday fall in recent times, as investors feared the security concerns would impact user engagement and the company’s financial performance. Last month, the micro-blogging platform had suffered a selloff over suspected exposure of user information.
Shares of the company closed the last session down 6.8% but opened Tuesday’s trading slightly higher. Earlier, the stock had a short-lived rebound from its multi-year lows mid-year. The latest rout was triggered by reports that the management had launched a probe into the suspected attack by international hackers.
The stock fell as investors feared the security concerns would impact user engagement and the company’s financial performance
The revelation came after Twitter’s customer support portal witnessed unusually high volumes of traffic from users based in China and Saudi Arabia. The activity was detected while fixing a bug that had caused a data breach earlier. While the extent of the latest violation has not been determined, Twitter suspects the hand of state-sponsored hackers.
Twitter CEO Jack Dorsey is already struggling to address the issue of the widespread use of the platform for online abuse, on the basis of color and gender, and is facing a probe by the Amnesty International. A report from the human rights watchdog this week said Twitter is a ‘toxic place’ for women. The report revealed that women of color were increasingly becoming targets of hate speech on it.
Meanwhile, a statement from the government this week alleged that the campaign by Russian agencies to influence US voters during the 2016 election was not limited to Facebook. Rather, the Kremlin-sponsored agents used every available social media site to meddle with the presidential poll.
Latest user-engagement statistics point to growing skepticism among account holders about the promises made by social media firms on ensuring data security. The growing pressure on their CEOs to come up with tangible steps to tackle the issue, and the demand for a global regulation to bring more transparency to operations, suggest social media will continue to be under strict scrutiny.