Facebook Inc (NASDAQ:FB) is not only the world’s giant social networking site, it is also responsible for an impact in the global economy to the tune of $227 billion, in the process creating roughly 4.5 million jobs for the year 2014. This is according to the results of a study conducted by Deloitte & Touche, a consulting firm commissioned by Facebook to come up with the report.
Deloitte & Touche examined three factors in order to calculate Facebook Inc (NASDAQ:FB)’s impact on a global scale. Deloitte analyzed connectivity effects, marketing effects, and platform effects. Connectivity effects accounted for the infrastructure needed such as broadband improvements and devices that makes it possible to use Facebook. According to Deloitte, this created an economic impact worth $50 billion, and about 1.6 million jobs. Platform effect refers to the apps and games created within Facebook. The study found out that it accounted for $29 billion of economic impact and created 660,000 jobs. Marketing effects took note of the benefits obtained by businesses by running ads within Facebook. This area contributed $148 billion worth of economic impact and accounted for 2.3 million jobs.
The results of the study, however, was questioned by some independent economists. In an email to The Wall Street Journal tech blog Digits, Stanford economist Roger Noll said that “The results are meaningless.” According to Noll, “Facebook is an effect, not a cause, of the growth of Internet access and use.” Facebook Inc (NASDAQ:FB) Chief Operating Officer Sheryl Sandberg defended the results of the study, saying that “Facebook is one of the main drivers of why people buy phones, particularly in the developing world.” Sandberg further elaborated that there are places where people actually confuse internet with Facebook. Other critics of the study pointed out to inaccurate methodology, such as the assigning of quantitative value to “Facebook Likes”, although such value was kept confidential. George Mason University economics professor Tyler Cowen concedes that Facebook has an impact, but argues that it should not be to the scale that is being reported.
Facebook Inc (NASDAQ:FB) Chief Operating Officer Shery Sandberg will be attending the World Economic Forum in Davos, Switzerland this week, and will discuss the results of the Deloitte study in a panel that includes Google Inc (NASDAQ:GOOGL) Executive Officer Eric Schmidt and Microsoft Corporation (NASDAQ:MSFT) CEO Satya Nadella. The panel will be deliberating on issues affecting the future of the digital economy.
This article has been written by Nonito Guntan.