Facebook Inc. (FB) has announced that it is forming new teams to study its sites to look for possible site-engineered biases.
The social media giant says that it will analyze its artificial intelligence-trained algorithms to see if racial bias has been unintentionally programmed into Facebook and Instagram as a result of adverse machine-learning.
In a July 21 statement to The Verge, a Facebook spokesperson said, “We will continue to work closely with Facebook’s responsible AI team to ensure we are looking at potential biases across our respective platforms.”
The announcement follows a wave of companies that suspended marketing on the site starting in June to support a general ad boycott against racism and hate speech. Companies such as Disney, (DIS) Coca-Cola, (KO) Starbucks, and Verizon endorsed the campaign called, Stop Hate For Profit on Facebook and Instagram using targeted ad suspensions as leverage.
Facebook CEO Mark Zuckerberg and Sheryl Sandberg COO, along with select Facebook staff, met in a Zoom meeting on July 7 with the boycott campaign organizers to address their issues. The group included Color of Change, Free Press, the NAACP, and the Anti-Defamation League.
According to the organizers, Facebook would not commit to 10 demands that they had made despite the company’s assurances to prohibit calls to violence from politicians and remove groups focused on Holocaust denial or white supremacy.
Instagram VP Vishal Shah said in a statement to The Verge on July 21, “Any bias in our systems and policies runs counter to providing a platform for everyone to express themselves.” He added, “While we’re always working to create a more equitable experience, we are setting up additional efforts to continue this progress — from establishing the Instagram Equity Team to Facebook’s Inclusive Product Council.”
Last month, Citigroup analyst Jason Bazinet stated on June 30 that shares of Facebook had seen an overreaction in light of the ad boycotts. He noted that if the ad boycotts end after July, the likely impact on Facebook’s equity is $1 per share. However, if they continue, it could become $17 per share, saying that the stock has fallen by $24 since the ad pause. He reiterated a Buy rating on FB and a price target of $275, which implies 4% upside potential.
On July 15, JP Morgan analyst Doug Anmuth reiterated a Buy rating on Facebook’s stock and raised his price target from $245 to $290 (20% upside potential). He commented that consumer spending on online advertising slowed in April but that there are trends showing improvement. However, he does admit spending is not back to pre-COVID levels.
Overall, 29 analysts assign Buy ratings, 5 Hold ratings, and no Sell ratings, giving FB a Strong Buy Street consensus. The average analyst price target stands at $258.78, suggesting 7% upside potential, with shares already up 18% year-to-date. (See Facebook’s stock analysis on TipRanks).
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