Facebook Inc.'s Zuckerberg Complains to President Obama: The Internet Needs Trust

"As the world becomes more complex and governments everywhere struggle, trust in the Internet is more important today than ever," Facebook (NASDAQ: FB  ) CEO Mark Zuckerberg wrote on Facebook. Zuckerberg goes on to explain that the Internet's security, however, is being challenged domestically -- and that's not OK.

Facebook CEO Mark Zuckerberg (right) in his conference room. Image source: Facebook.

Zuckerberg phones Obama
The once surprising stream of headlines derived from the NSA whistleblower Edward Snowden don't have the same kick they first did. The shocking news that the U.S. Government is watching the Internet more closely than most of us imagined is now, unfortunately, old news.

Zuckerberg, who says in his recent post that he phoned Obama on the issue, asserts that breaches in Internet security by the U.S. Government is damaging "all of our future."

While Snowden's leaks and other modern Internet security problems are frequently discussed in terms of political viewpoints and privacy preferences, it also impacts modern business done on the Internet.

For Zuckerberg, obtrusive NSA surveillance is a disservice to Facebook's mission to connect. If we can't trust the medium that connects us, is the medium threatened?

Further, Zuckerberg explained that it has had to put engineering resources to work to protect Facebook users from our own Government:

... I've been so confused and frustrated by the repeated reports of the behavior of the US government. When our engineers work tirelessly to improve security, we imagine we're protecting you against criminals, not our own government.

But based on his conversation with President Obama, "it seems like it will take a very long time for true full reform."

What does the NSA's action mean for modern Internet businesses?
Online security is now more important than ever -- so important that investors should include it in their assessment of potential risks when analyzing Internet stocks.

But greater scrutiny of online security is a two-sided coin. While it could potentially threaten the reputation of some businesses, its heightened importance today could make platforms more secure than ever as Internet companies go to greater lengths to ensure privacy. Telegram, a competitor to Facebook's recently acquired WhatsApp, for instance, is so confident in the security of its network that it is offering $200,000 to anyone who can crack the system -- no small sum for a start-up. The statement, in and of itself, boosts the value proposition for the platform as a sensible alternative to WhatsApp.

While Snowden leaks of overzealous Government surveillance irk many Internet users, the greater emphasis on security is likely good news for investors (over the long haul) with Internet stocks in their portfolio. It was a matter of time before privacy took center stage, and the earlier it happened, the better. The prominent platforms today now have a chance to build a sense of trust that could have priceless intangible benefits that make switching from a platform they trust a less likely outcome.

At the same time, the greater emphasis on Internet privacy and security means potential security issues could alter the risk profile of Internet stocks they are considering. Major security breaches, more than ever before, could threaten the core reputation of a network like Facebook and break down trust on a platform.

For technology investors, let's hope Zuckerberg lives up to his proclamation at the end of his blog post:

So it's up to us -- all of us -- to build the Internet we want. Together, we can build a space that is greater and a more important part of the world than anything we have today, but is also safe and secure. I'm committed to seeing this happen, and you can count on Facebook to do our part.

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  • Report this Comment On March 14, 2014, at 3:16 PM, paule32 wrote:

    He would of been better off calling Congress. They are the ones who legislated against their constituents and they are the ones to fix it.

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