Facebook's scandal-ridden year gets a fresh glimpse in massive expose

Key Points
  • A new report from Wired details Facebook's internal hand-wringing over how to confront the public and its own employees about several PR fires.
  • Facebook's PR team was divided over how to respond to the reports about Cambridge Analytica, Wired reports.
  • The company also had a tense internal relationship between the teams at Facebook and Instagram due to the latter's growing success, according to the report.
Mark Zuckerberg testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018.
Chip Somodevilla | Getty Images

A new cover story from Wired gives a fresh glimpse inside Facebook's headquarters during its scandal-ridden year.

The article, topping well over 10,000 words, details Facebook's internal hand-wringing over how to confront the public and its own employees about several PR crises. Among them: the reported use of Facebook data by Cambridge Analytica to influence the U.S. presidential election, its algorithmic shifts that cost engagement for many news organizations, the dissatisfaction and departure of the Instagram founder, and a top executive's public support for Supreme Court nominee Brett Kavanaugh.

Facebook did not immediately respond to CNBC's request for comment.

Here are some of the key takeaways from the report:

Facebook's PR team was divided over how to respond to Cambridge Analytica

Facebook's PR team, under the direction of former Uber communications SVP Rachel Whetstone, was torn over the decision of how to respond to The Guardian and New York Times' reporting on Cambridge Analytica, according to Wired. Whetstone was a divisive figure within the communications team, according to Wired, and she had close access to Chief Operating Officer Sheryl Sandberg and CEO Mark Zuckerberg, with whom she traveled and joined for important meetings. Whetstone, who has since moved to Netflix as its chief communications officer, did not immediately respond to CNBC's request for comment.

After learning in late February 2018 of the impending stories, Facebook debated how to respond, but eventually chose to get in front of the coverage by publishing its side of the story ahead of the news outlets. People involved in the decision told Wired the decision was close and the team recognized that it may have sacrificed some goodwill with the journalists who had uncovered the scandal in the first place.

In the days after the reports, Sandberg and Zuckerberg remained silent while senior managers pleaded for them to make a statement, Wired reported. Sandberg later told Wired it was a mistake to delay a public response.

Facebook had a tense relationship with Instagram as it reached new heights

Instagram has grown to be a great success after being acquired by Facebook in 2012 for $1 billion. And while that would seem like a win for Facebook on the surface, it also bred internal tensions within the companies as Instagram's growth began to outshine Facebook's flagship service. In late 2018, Instagram's founders left the company.

Sources told Wired that top executives worried Instagram was cannibalizing Facebook's own users. Following favorable press coverage of former Instagram CEO Kevin Systrom, Zuckerberg reportedly ordered in 2014 that executives must be approved by him or Sandberg to sit for magazine interviews. Some involved told Wired this was an effort to prevent poaching, while others said it was meant to keep Systrom in check.

When it was time to report Facebook's earnings to investors in July, Facebook's top executives struggled with how to communicate its slowing user growth while highlighting Instagram's success. A person who saw communications between top executives told Wired that Zuckerberg and others debated over email whether to say on the earnings call that Instagram's growth was mainly due to its relationship with Facebook. Whetstone reportedly advised Zuckerberg against that approach and suggested he include a nod to Instagram's founders. Zuckerberg's script ultimately read, "We believe Insta­gram has been able to use Facebook's infrastructure to grow more than twice as quickly as it would have on its own. A big congratulations to the Insta­gram team — and to all the teams across our company that have contributed to this success."

Following the call, Zuckerberg told Instagram's founders he was removing the supports Facebook had previously provided the team that referred traffic from Facebook to Instagram, in an attempt to stop users from leaving or leapfrogging Facebook's main service in favor of Instagram. Systrom reportedly explained the change to staff in a memo, which Facebook feared would leak. Shortly after, Systrom went on a paternity leave that never ended.

An executive's public support of Brett Kavanaugh led to an internal reckoning at Facebook

Facebook's vice president of global public policy, Joel Kaplan, wedged another divide within the company after he appeared sitting behind then-Supreme Court nominee Brett Kavanaugh during his hearing before the Senate Judiciary Committee about allegations of sexual assault made against President Donald Trump's nominee, the Wired story says.

Kaplan, who was a long-time friend of Kavanaugh's, reportedly did not inform Facebook's leadership that he would be at the hearing. About a week later, Facebook had an all-hands meeting to discuss the event, where female employees relayed their own experiences of sexual harassment and assault. Kaplan attended the meeting via video conference, according to Wired, while Zuckerberg and Sandberg attended in person. While some employees felt the meeting was an empowering reckoning, others told Wired they rolled their eyes at the event and demands made of Facebook.

Facebook feared being seen as biased for favoring quality news outlets

Kaplan was also a central figure in Facebook's decision on how to handle misinformation on its platform, according to Wired. While Facebook Chief Product Officer Chris Cox, who recently announced his decision to leave the company, advocated for supporting high-quality news outlets on the platform, Kaplan pushed back.

Kaplan, a former deputy chief of staff to President George W. Bush, reportedly argued that such support would make it seem like Facebook supported liberals, which could cause problems for the company in Washington. He said conservative outlets Breitbart and the Daily Caller also needed to be protected, according to Wired. Zuckerberg ultimately pushed the decision about how to boost publishers to the side, which was effectively a win for Kaplan.

Read the full report at Wired.

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