Facebook shares jumped more than 4% on Friday, following comments by Chief Executive Mark Zuckerberg on Thursday, indicating a change in his view of From Apple (AAPL) new user privacy update that may weaken social network advertising.
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Zuckerberg struggled with Apple because of concerns that personalized advertising in the Facebook (FB) can be hindered by an update of the operating system known as iOS 14 for Apple iPhone and iPad.
In the past few weeks, Facebook has run an advertising campaign advocating personalized ads. Targeted advertising is the key to small business success, he says.
But Zuckerberg changed his position when he was interviewed on a new social networking app called Clubhouse. When asked about Apple, Zuckerberg said, “The reality is that I am confident that we will be able to manage this situation well and be in a good position.
“I think we may even be in a stronger position if Apple’s changes encourage more companies to conduct trade on our platforms,” he added.
Each iPhone and iPad has a unique identifier called IDFA. The next update to Apple’s iOS 14 allows users to disable an app’s ability to track its activities.
But Facebook and others that sell mobile ads rely on this ID to help target ads to users. Advertising accounts for about 98% of Facebook’s revenue.
Facebook Stock: Navigating the changes
Zuckerberg hopes that small businesses and developers will have a harder time navigating the changes.
Alphabet (GOOGL), the owner of Google, has been relatively quiet about the change, as he is introducing his own privacy-related changes to his Chrome browser. Alphabet also promised to stop tracking individual users altogether.
Furthermore Twitter (TWTR) and Photograph (SNAP) said the move would be good for user privacy and could even benefit their business.
Apple watchers expect the changes to iOS 14 to be released soon.
Facebook shares were up 4.1% to close at 290.11 on today’s stock exchange.
Follow Brian Deagon on Twitter at @IBD_BDeagon for more information on technology stocks, analysis and financial markets.
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