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Facebook's decision to stop working with data collectors took a toll on Acxiom Corp. shares Thursday. The decision by the social media giant also derailed Acxiom's fiscal 2019 earnings guidance.

Acxiom shares fell more than 30 percent in morning trading before recovering some of the losses. The shares fell $5.34, or 19 percent, to close Thursday at $22.71. Trading volume peaked at 7.3 million shares on Thursday, Thomson Reuters data show, up from a 100-day moving average of 550,000 shares a day.

Jerry Jones, Acxiom's chief ethics and legal officer, said Thursday that the company does not expect Facebook's changes to immediately affect the company, but they could hurt Acxiom's total revenue and profits by as much as $25 million for fiscal 2019, which begins Sunday.

"We think there's a strong argument to be made that the type of products and services we provide elsewhere will become more in demand," Jones said. Acxiom now predicts its LiveRamp subsidiary will grow 30 percent year over year.

"Today, more than ever, it is important for businesses to be able to rely upon companies that understand the critical importance of ethically sourced data and strong data governance," Scott Howe, Acxiom's chief executive officer, said in a news release Wednesday. "These are among Acxiom's core strengths."

While third-party data providers like Acxiom feel the adverse effects now, retailers reliant on Facebook advertising could be affected by future crackdowns, said Alan Ellstrand, associate dean of the Sam M. Walton College of Business at the University of Arkansas, Fayetteville.

"There's still a lot of uncertainty about how the Facebook platform might be regulated going forward," Ellstrand said.

Facebook's recent rollout of changes to its privacy policy came after reports that political-advertising firm Cambridge Analytica improperly obtained personal information on as many as 50 million users and failed to delete it when the leak was detected, Bloomberg News reported.

Facebook Chief Executive Officer Mark Zuckerberg has been doing damage control, informing users of steps the company will take to better secure their personal information. One of those steps involved the deletion of its business arm, Facebook Partner Categories, which used data from Acxiom and other firms to target specific audience groups with advertising.

In a news release to advertisers Wednesday, Facebook said this action is "common industry practice" and "will help improve people's privacy on Facebook."

Sheila Colclasure, Acxiom's global chief privacy officer, said Facebook's actions only "deflect from their own accountability, and it's an intentional effort to make their walls higher and heighten their monopoly."

While Facebook's services are free, the social network is cutting off revenue streams and making advertisement adjustments that "could really change Facebook," Ellstrand said.

It's also an effort to avoid the fate of Myspace, a social media platform largely supplanted by Facebook, he said. "If there becomes a more general backlash toward Facebook, where people move off the platform, that could even be the bigger threat."

Business on 03/30/2018

Print Headline: Acxiom shares, outlook take hit; Facebook shift stirs uncertainty

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