MONEY stocks

The Market’s New Message: Show Me the Money Now!

Investors lost patience last week, punishing companies like Amazon that aren't generating profits while rewarding those such as Facebook that are delivering on their promise.

The stock market has a reputation for looking ahead.

That’s why equity prices tend to predict shifts in the economy six to nine months before they happen. It’s also why investors recently punished shares of the credit card giant Visa after the company posted solid earnings but hinted that revenues later in the year would fall short of expectations.

Still, there are times when Wall Street adjusts its perspective and focuses on the here and now. And Friday was one of those occasions.

In what turned out to be a rather brutal end of the week, investors gave companies—including some of the market’s darlings of the past few years—an extremely short leash. Those that lived up to their promise came out relatively unscathed, but those that fell short got hammered.

Just ask Jeff Bezos and Mark Zuckerberg.

For years, Bezos’ Amazon.com AMAZON.COM INC. AMZN -1.8827% soared as it posted robust sales growth while promising strong earnings were just around the corner. The e-commerce giant delivered the exact same message (and results) when it announced its quarterly earnings last week. This time, though, investors responded by erasing $16 billion of market value from the company in half the time it takes the company to deliver packages to its Prime membership customers.

Other examples of companies that couldn’t deliver on growth and earnings now were the streaming music service Pandora Media PANDORA MEDIA INC. P -2.466% and Dunkin’ Brands DUNKIN BRANDS GROUP DNKN 1.2877% , the parent company of the Dunkin’ Donuts chain, which is struggling to fight off Starbucks and McDonald’s in the coffee wars.

DNKN Price Chart

DNKN Price data by YCharts

On the flip side, Zuckerberg’s Facebook FACEBOOK INC. FB -0.7581% not only blew past Wall Street’s revenue and earnings expectations in the recent quarter, it proved that it was making big strides in mobile advertising, the area the social network giant’s investors were most worried about in recent years.

Not surprisingly, shares of Facebook—and other companies firing on all cylinders, such as Starbucks STARBUCKS CORP. SBUX -0.6477% —defied the market’s end-of-the-week sell-off and are at or near their all-time record highs.

Here’s a closer look at the week’s winners and losers:

Amazon and Pandora Slammed by Wall Street for Weak Earnings

Dunkin, Mickey D’s, or Starbucks? The Surprising Winner of the Coffee War

Facebook’s Next Battle is Wrestling Your Credit Card Number from Amazon

TIME Tech Policy

Meet the Woman Trying to Protect You From Silicon Valley

Federal Trade Commission Chairwoman Edith Ramirez Cade Martin 2014

Edith Ramirez is probably not the most popular person in Seattle right now. As the chairwoman of the Federal Trade Commission, she’s currently suing two of the city’s biggest tech companies: Amazon, for allegedly making it too easy for kids to rack up in-app purchases on their parents’ Kindles, and T-Mobile, for allegedly cramming unwanted charges into customers’ phone bills. That’s to say nothing of the recent settlements with Snapchat over false marketing and Apple over in-app purchases. It’s all come under the watchful eye of Ramirez, who assumed the chairwoman’s position in March 2013 and has taken a laser focus to the activities of tech companies, particularly in regards to mobile.

The new FTC head talked to TIME about the hidden permissions lurking in terms of service agreements, Facebook’s controversial mood study and whether Americans should ever expect a “right to be forgotten” online. An edited version of the conversation is below.

TIME: How important is the technology sector as a whole for the FTC right now? Is it an area of focus for you personally?

Ramirez: Our fundamental mission is to protect consumers and promote competition and so we are going to be wherever consumers are. The reality is that technology has been playing a critically important role for the agency for a number of years. Because we see consumers really gravitating to mobile devices, it’s crucial that the agency be very much informed about and keenly aware of what’s happening in the mobile sphere.

TIME: What are the biggest challenges or dangerous that consumers can face with the rise of mobile?

Ramirez: You want consumers to be able to partake in all of the terrific innovation we see in the marketplace. One way to assure that is to make sure the products that are out there take into account what’s of concern to consumers—that includes, among other things, taking into account concerns about data security and privacy, and also making sure that some of the basic protections that we’re all used to when we walk into a grocery store or a local convenience store, that we also have those basic protections available to us when we’re engaging in a transaction on our smartphone.

Data security is paramount in my view. The more connected we are, the more information and data that is being gathered by all sorts of different companies. It’s crucial that this personal information that is being collected and being used, that companies take reasonable steps to ensure that data is protected.

TIME: We live in this era now where people sign up for services and they don’t read the fine print. Do you think there’s a base level of privacy or control that Internet companies should be affording their customers?

Ramirez: I do. We realize that consumers aren’t going to be poring over long, confusing privacy policies. Now that we’re in a mobile world, what’s the likelihood that anyone’s going to be scrolling through on a mobile device some lengthy privacy policy? That’s become increasingly unlikely.

Companies need to be thinking about privacy from the get-go, when they first start conceiving of any new product or service. If you’re developing an app that’s a flashlight app, do you really need to have access to my contacts? Do you really need to have access to my geolocation? If they want to access information that goes beyond what one would expect, they ought to be asking for permission to do that.

I think we’ve seen a tremendous improvement, even in the course of the time I’ve been at the agency. We’ve seen companies realize that consumers really do care very deeply about maintaining their information [security] and they want to also exercise greater control. At the same time I think a lot more needs to be done in this area. A lot in this area still continues to take place behind the scenes in a black box. Consumers may not fully appreciate the extent of data-sharing that’s taking place.

TIME: Last month people were upset because Facebook had done this experiment where they were altering people’s News Feeds to change their mood in some way. Do you think that experiment was appropriate for them to do?

Ramirez: I can’t really comment on the specifics of what Facebook did, but I think what it does show is again the need for consumers to be in the driver’s seat. They want to know what companies are doing, how they’re using the information that they’re sharing. It just goes to show that consumers don’t want to be in the dark about this. That’s a basic responsibility companies have—they ought to be transparent about what they’re doing, they ought to give consumers an opportunity to have control over how their information is being used, what information is being collected. Simply because [consumers] are receiving a service, and even it happens to be free, that doesn’t mean they don’t want to be in control.

TIME: Does the FTC plan to investigate the Facebook issue formally?

Ramirez: We can’t comment on how investigations we conduct. What I can tell you is these are issues we are concerned about and we are monitoring the marketplace.

TIME: In Europe, the courts recently enshrined a “right to be forgotten,” so people can delete articles about themselves from search results. Do you think that’s something Americans should have the right to for privacy reasons?

Ramirez: Of course we’re operating here in the U.S. under a very different legal regime than folks are in Europe. An expansive “right to be forgotten” is not something that’s likely to pass Constitutional muster here in the United States because there is a First Amendment right to both access to public information and freedom of expression. At the same time, I do understand the need for us to think about controlling our own information. By way of example, I know that consumers want to be able to delete information. If they’re on a particular platform, they will want to be able to be assured that if they close out their account that their information will be deleted. This is exactly an element of an order we have with Facebook. It’s not an expansive right to be forgotten, but there are certain controls and tools that I think U.S. consumers would like to have.

TIME: As we see these tech companies like Google and Amazon getting bigger and bigger, taking up a larger portion of their sectors, do you think there are antitrust issues with these companies as they continue to grow?

Ramirez: With any large company, if they have market power, monopoly power, we would be looking closely at how they use that. We did conduct an investigation relative to Google a couple of years back. In that particular investigation, we opted not to take action.

TIME: A lot of times when people FTC settlements come out, people see the dollar figure, and it seems like a slap on the wrist to these companies that are generating billions of dollars in revenue every year. Are the actions you take are actual deterrents to stop companies from abusing consumers in various ways?

Ramirez: We do not have general civil penalty authority. We can’t assess a fine when we find a violation of law under our general statute. What we can do is seek to obtain consumer redress or we can, if appropriate, ask a company to disgorge any unlawful gains that resulted from the unlawful conduct.

In any particular case, the amount that you may see, you may think, ‘Well how does that compare to the profits of a company?” But that’s not really the analysis. The analysis on our end is, “Are we successfully recovering money that would compensate consumers for the damage that they have suffered.”

I think our enforcement work is sending important signals to the marketplace. In the privacy arena, Facebook, Google, Twitter [are] under order. It’s sent important signals to them, and I think as a result of the action that we’ve taken, companies are more aware of what their responsibilities are.

TIME: How are you able to strike a balance between this goal of consumer protection and allowing companies to innovate and try new things?

Ramirez: Whether it’s having information about what you’re paying for, whether it’s knowing what information an app might want to have access to when I’m downloading it—all of these things really work side by side with innovation. I don’t think consumers should have to sacrifice their privacy, the security of their information…when they avail themselves of all these terrific products that we see today. In fact I think for companies to flourish, it’s really important that consumers feel they can trust the products that they’re using, that they feel that they know the full extent of what is happening when they download a service. Companies will flourish all the more if they provide basic protections.

TIME facebook

Here’s How Facebook Doubled Its IPO Price

Facebook Holds f8 Developers Conference
Facebook CEO Mark Zuckerberg delivers the opening kenote at the Facebook f8 conference on April 30, 2014 in San Francisco, California. Justin Sullivan—Getty Images

Facebook's stock doubled its IPO price by midday Thursday

Facebook suffered a cruel summer back in 2012. The social network raised its IPO price just before going public in May 2012, but technical glitches during early trading caused mass investor confusion. Nasdaq eventually paid a $10 million fine over the debacle, and Wall Street showed no mercy to the social network in the ensuing months. Facebook’s stock cratered, diving from $38 to below $18 before the following autumn.

Two years later, the sun’s shining bright on the tech giant. Facebook beat analysts’ expectations yet again in its latest quarterly earnings report, generating revenue of $2.9 billion and earnings per share of 42 cents. That sent the company’s stock soaring above $76 during midday trading Thursday, doubling its IPO price of $38. That’s also more than quadruple the social network’s all-time low close of $17.73.

Screen Shot 2014-07-24 at 1.25.08 PM

Facebook’s massive turnaround has everything to do with mobile. When the company went public, its revenue was almost completely tied to desktop ads–exactly the kind of business investors in the mobile era don’t like. With more than half a billion people already accessing Facebook on mobile, the company had to prove that it could successfully transition its business. CEO Mark Zuckerberg set a laser-like focus on mobile strategy, and he forced his executive clique to do the same.

The dedication has paid off. Facebook now generates more than two-thirds of its total ad revenue on mobile and has more than a billion mobile monthly active users. Overall ad prices jumped 123 percent year-over-year, partially because mobile ads placed directly in users’ News Feeds are more valuable than ads on the right rail of the site served to desktop users.

But what really has Wall Street salivating is the fact that Facebook has plenty of mobile monetization moves left to make. New auto-playing video ads in users’ News Feeds could help the company lure marketers from television. Instagram introduced ads last year that are being positioned as an attractive option for brand marketers. The company is also likely to figure out ways to make money off its messaging goliaths Messenger and recently-acquired WhatsApp.

Overall, it’s clear that Facebook has solved its mobile conundrum, and Wall Street is rewarding it handsomely. With its share of the overall mobile advertising market quickly increasing, the company may soon to be able to challenge Google to be at the top of the totem pole of mobile.

MONEY

Facebook’s Next Battle Is Wrestling Your Credit Card Number from Amazon

Facebook logo with game pieces on top of it
Berliner Verlag/Archiv—AP Images

Advertisers will pay big bucks to get in your Facebook newsfeed. But will you really buy their products?

And they said Facebook couldn’t sell ads. Ha!

In its quarterly earnings report on July 23, the social network posted a blockbuster figure: $2.68 billion from advertising in the second quarter alone, a 67% increase from last year. About 62% of that revenue came from mobile devices.

With numbers like that, Facebook has started breathing down Google’s neck. eMarketer expects Facebook will capture 18.4% of the mobile ad industry this year, with Google holding onto 40% market share.

Facebook is gaining ground in the battle over mobile ads. But the next battle could be on a completely different front, against a completely different player: Amazon. Facebook’s new “buy” button, announced on July 17, will let Facebook users order products simply by clicking a button on a Facebook ad. The feature requires that users give Facebook their credit or debit card information to complete the transaction without ever leaving the social network.

Of course, Facebook has tried e-commerce before. In the past, the social network has asked users to open their wallets for virtual games and gift cards. But as more eyeballs moved to mobile devices, those efforts flopped. Even though advertising revenue has skyrocketed since the company’s IPO, revenue from “payments and other fees” (read: Farmville) has stayed relatively flat.

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But here’s why the “buy” button is different. Facebook doesn’t plan to sell its own products. It plans to sell enhanced advertising. Facebook’s founders are adamant that the buy button is just a way to “streamline” the process of buying from other companies.

“Commerce is really important, and it’s a growing part of our business,” COO Sheryl Sandberg said during yesterday’s earnings call. “But I don’t think people should confuse that with Facebook selling things directly. The more people discover things from a newsfeed and go on to purchase, the more important we are in driving commerce. That doesn’t mean we’re going to, or have to, sell products.”

“Our main business is advertising,” CEO Mark Zuckerberg added. “To the extent that we do payments, it’s related to that.”

When it comes to the “main business,” Facebook has a clear competitive advantage: its 1.32 billion users worldwide. A good proportion of those people are total addicts. Zuckerberg says that on average, users spend 40 minutes a day on Facebook. Even people who claim to dislike Facebook won’t shut down their accounts.

“We believe hundreds of millions of users face switching costs that keep them from leaving Facebook,” Morningstar analyst Rick Summer wrote in a recent report. “People are unlikely to leave unless they can take their network of friends, content, and applications with them.”

Still, Facebook doesn’t have a good track record when it comes to protecting users’ privacy. One poll found that only 5% of people really trust Facebook with their personal information. Why give Facebook your credit card number and purchase history?

“With anything that Facebook does, there are always questions about how people’s privacy is going to be protected and what sort of data and information is shared,” says Debra Aho Williamson, principal analyst at eMarketer. “With e-commerce there’s a lot of potential for questions because people are exchanging their credit card information, their personal information, making Facebook aware of things they’re actually buying – that’s data Facebook can use for advertising or creating other products down the line.”

In a way, Facebook’s greatest asset – detailed information about your likes, dislikes, and all of your social connections – is also its greatest vulnerability. If Facebook could tell you which products your friends like, maybe you’ll be more likely to buy those products within the social network itself (with just two clicks!). Or maybe your friends will be totally freaked out that you know what they’re buying.

“It’s one thing for me to give Big Brother information about every purchase I make,” says Oded Netzer, associate professor at Columbia Business School. “It’s another thing when Big Brother wants to share it explicitly or implicitly with my friends.”

Meanwhile, Facebook’s competitors are also arming themselves for this next fight. Amazon and Twitter recently teamed up on an initiative that lets you add products to your Amazon cart by replying to certain tweets. And just last week Twitter announced that it planned to buy CardSpring, a company that helps developers incorporate payments systems into their apps.

One other piece of news could spell trouble for Facebook. While mobile ad revenue is way up, impressions are down 25%. That’s because users will only put up with so many ads when they’re scrolling through their newsfeeds on their phones – so Facebook has a relatively limited amount of space to sell. (On desktops, the right-hand rail provides more available ad space.) Over the long-term, Facebook plans to ramp up video ads, monetize Instagram, and test the “buy” button. But the question remains: If users primarily use Facebook to interact with their friends, how much e-commerce will they really tolerate?

“This whole idea of making money from social networks has not worked well,” Netzer says. “More and more companies are finding that people interact with each other not for the purpose of talking about products – they’re just interacting with each other. The products are interrupting this discussion.”

Facebook may be winning the advertising war. But if Facebook’s revenue has skyrocketed on the premise that social networks are the best place for businesses to reach new customers, then the “buy” button may finally put that theory to a test.

TIME Earnings

Facebook Stock Hits All-Time High After Strong Earnings Report

Facebook CEO Mark Zuckerberg speaks during an event at Facebook headquarters on April 4, 2013 in Menlo Park, California
Facebook CEO Mark Zuckerberg speaks during an event at Facebook headquarters on April 4, 2013 in Menlo Park, California Justin Sullivan—Getty Images

Mobile ads made up 62% of Facebook's $2.7 billion in ad revenue

Updated July 23 at 5:53 p.m.

Facebook stock climbed to an all-time high as it once again sailed past Wall Street’s expectations in its second quarterly earnings report of the year. The social network pulled in $2.9 billion in revenue for the quarter, beating analysts’ estimates of $2.8 billion. The company generated a profit of $791 million. Earnings minus some line items were 42 cents per share, blowing past estimates of 32 cents per share. Facebook shares were priced above $74 in after-hours trading.

Facebook now has 1.32 billion monthly active users, an increase of about 40 million from the previous quarter. Mobile usage continues to grow, with the social network now having 1.07 billion monthly active users on mobile devices, up from 1.01 billion in the previous quarter.

With increased mobile usage, mobile advertising continues to make up a bigger share of Facebook’s revenue pie. Mobile ads accounted for 62 percent of the company’s $2.7 billion in ad revenue for the quarter, up from a 59 percent share in the previous quarter and a 41 percent share during the same period last year. It’s a stark turnaround from Facebook’s early days as a public company, when the social network’s stock tanked on fears that it couldn’t convert its growing desktop business to mobile.

During a conference call with investors, Facebook touted its popularity as a public platform. Chief Operating Officer Sheryl Sandberg said 350 million Facebook users made 3 billion interactions related to the World Cup during the event, and the World Cup Final was the most-talked-about Facebook event in Facebook history. Facebook also just launched a new app specifically for celebrities with public pages last week. “Public content will continue to be a growing focus for us over the coming months,” CEO Mark Zuckerberg said.

While Facebook’s revenue has been ramping up quickly, Zuckerberg again emphasized that investors shouldn’t expect significant monetization from newer apps and acquisitions such as Messenger, WhatsApp and Instagram in the near future. He compared their current businesses development to where Facebook was in 2006, two years after it launched.

It’s not yet clear whether Facebook’s latest controversy, in which the company experimented with people’s News Feeds without their knowledge to alter their moods for a scientific study, will have a substantial effect on usage of the social network. The mood study was only widely publicized at the very end of the fiscal quarter.

 

TIME facebook

Here’s What William Shatner Thinks of Facebook’s New Celebs-Only App

William Shatner Reviews Facebook Mentions
William Shatner performs during his one-man show, "Shatner's World: We Just Live In It," in Las Vegas, Nevada. Ethan Miller—Getty Images

And he isn't too amused with it

Actor William Shatner, an outspoken Twitter rights activist, took to Tumblr Tuesday to review Facebook Mentions, the new celebrities-only app meant to boost public figures’ interactions with their fans. And he isn’t too amused.

The Star Trek alum compared the older Pages App to Mentions, the new app that “most of [us] don’t have access to.” Shatner’s review contains five chapters for five comparable features between Pages and Mentions, stamping them each with the Shatner seal of approval or disapproval. He likes that Mentions allows him to track trends, mentions (of course) and notifications, but what didn’t float his boat were certain features that weren’t seamlessly integrated across Mentions and Pages, or ones that seemed to him like they were carelessly lumped in the app.

“The Fifth and final section of each app [Pages' Feed and Mentions' Photos, Events and Settings] seems like they are afterthoughts – where can we put these items,” Shatner wrote.

At times Shatner is a harsh critic, writing that both Pages and Mention “clearly both fail” with regards to posting options. Not only that, but he also seemed creeped out by the strange marketing strategy—a banner ad featuring a graphic of his face pasted onto an iPhone—and annoyed that he’d been forced to follow a celebrity to begin using the app. Of course, Facebook suggested that he follow Star Trek‘s George Takei, though the two aren’t exactly on good terms. In the end, Shatner remained skeptical of the new app’s usefulness.

“I’m not quite sure why Facebook released this app for ‘celebrities,’” Shatner wrote. “It seems to be ill conceived. I will probably use it to post to my Facebook when I’m on my phone but it doesn’t allow for mail or groups. I will continue to use my regular Facebook App as well as the Pages app.”

 

TIME Security

Facebook and Twitter Users: Don’t Fall for MH17 ‘Actual Footage’ Scams

Be very careful which MH17 news stories you click on, especially on Facebook and Twitter, where scammers are exploiting the tragedy to spam you.

If you run across Facebook pages touting pictures of Malaysia Airlines MH17 crash victims, or tweets linking to reports on the disaster, warning: they may be fakes, harbor malware or redirect you to pornographic websites.

The BBC reports that fraudsters are exploiting the tragic destruction of Malaysia Airlines Flight 17, ostensibly shot down by a ground to air missile on July 17, by bait-and-switching users with promises of shocking video footage or tribute pages to victims that instead link viewers to spam or other offensive content.

In one instance, a Facebook page was created the day the plane crashed that purported to have video footage of the crash itself, says the Daily Mail. Clicking the link promising the video redirected viewers to a spam site, which of course contained no such video. The Facebook page has since been removed, but security expert TrendMicro, which blogged about some of this cybercriminal activity on July 18, expects MH17 exploitation to continue.

In other instances, as noted by TrendMicro, people may be using the tragedy to boost web traffic, posting suspicious tweets with links to malicious sites harboring malware, but also seemingly legitimate ones in hopes of “gaining hits/page views on their sites or ads.”

So beware and think before you click, especially if you see claims like “Video Camera Caught the moment plane MH17 Crash over Ukraine” (as noted by the BBC). There is no such video, and the chances are all but certain you’re being gamed based on someone’s perverse attempt to mine an unspeakable calamity. What you can do, on the other hand, is report such suspicious activity to Twitter or Facebook.

TIME Marriage

Don’t Blame Facebook For Your Divorce

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cpaquin—Getty Images

Understanding the flaws in a new study that says time spent on Facebook is related to the divorce rate

A new study suggests that there is a relationship between increased Facebook use and divorce. But don’t delete your Facebook account yet: the researchers themselves admit that they have found a correlation between the two, not causation.

The researchers, who published the study in the July 2014 edition of Computers in Human Behavior, first looked at the rise of Facebook use and the rate of divorce in individual states. They found that a 20% increase in the number of Facebook users in a given state is associated with a 4% increase in the divorce rate the following year. However, the researchers could not identify who exactly was creating new Facebook accounts: it could have been young teens allowed to log on to the site for the first time or older people finally catching on to the trend. The people increasing their Facebook use were not necessarily the same people who were getting divorced.

The researchers also looked at survey information from individuals across the country aged 18 to 39. They found a weak relationship between marriage quality and social media use: those who spent more time on Facebook, Twitter and other sites were more likely to be unhappy with their marriage and thinking about ending it. However, an easy explanation for this correlation absolves Facebook: rather than social media sites causing people to be unhappy with their marriages, people who are unhappy (whether with their spouse or their life in general) could be turning to Facebook and other social media as an outlet. Individuals use Facebook to talk to friends, connect with old acquaintances and browse news and information—all of which can be used as a distraction from the less pleasant realities of life.

As the researchers conclude: “The study does not establish a cause-and-effect relationship because that would require longitudinal and/or experimental data.”

Sure, the Internet has made it easier to find mistresses and simpler to track a spouse’s cheating. But in the end, the individual has agency. Being exposed to exes, old friends or strangers online perhaps makes cheating more tempting, but it doesn’t encourage cheating. Similarly, a person may be inclined to monitor their partner’s activity, but that person can also choose to trust his or her significant other. In short, if a cheater is going to cheat, he doesn’t need Facebook (0r even the Internet) to accomplish that goal.

TIME dancing

This Video of an Old Man Dancing Will Brighten Your Day

Forever young

The elderly man in this video may need two canes to walk, but he doesn’t need them to dance.

The user who uploaded this video to Facebook, Edgard Eleuterio Daza, gave it a short and sweet caption that sums the whole thing up pretty well: “Eternamente joven.”

Translation: forever young.

TIME Tech Policy

Why Twitter and the Rest of Silicon Valley Should Disclose Their Diversity Data

Twitter's IPO Spurs Horse Race Among Exchanges Seeking Listing
The Twitter Inc. logo is displayed on a mobile device for a photograph in New York, U.S., on Monday, Sept. 16, 2013. Twitter Inc., which announced plans last week for an initial public offering, is still deciding whether to list on the New York Stock Exchange or Nasdaq Stock Market, setting off a horse race for the high-profile deal. Photographer: Scott Eells/Bloomberg via Getty Images Bloomberg/Getty Images

Twitter has become the largest media platform for minority voices on the planet. Everything from the Trayvon Martin case to the BET Awards has become the equivalent of a front-page headline on the site thanks to the social network’s trending topics, which aggregate the most popular conversations and present them to all Twitter users. Blacks over-index heavily on the site, with 29 percent of black Internet users in the U.S. reporting that they actively use Twitter in a recent Pew Research Center survey, compared to 16 percent of whites and Hispanics. In the same way Twitter owes much of its success to the early adopters who gave the site structure and the celebrities who gave it clout, it can also thank black people for helping it reach critical mass and climb to 255 million monthly active users.

So it’s disappointing that the company is so far resisting a positive trend in Silicon Valley, the disclosure of employee data related to race and gender. Chances are, Twitter’s employee roster looks a lot like its Bay Area competitors—overwhelmingly male and white. That’s not a dirty little secret in the Valley; it’s been the modus operandi for decades. The common race and gender tropes of tech startups are so ingrained that we now have an HBO sitcom to mock how far removed the tech scene is from the way the rest of the world lives.

Most tech firms have spent years resisting past entreaties to cough up demographic data. But the stonewalling ended in May, when Google published a diversity report revealing that the company is about 70 percent male, 61 percent white and 30 percent Asian. That set off a domino effect that led Yahoo, LinkedIn, Facebook and others to publish similar data. But huge consumer tech companies like Apple, Twitter and Amazon have so kept their own figures to themselves (Apple CEO Tim Cook has said the company will release its data “at some point“). Civil rights activist Jesse Jackson is planning an online petition and a social media campaign Friday to convince Twitter in particular to disclose its employee data. None of the companies mentioned responded to multiple emails from TIME asking whether they planned to release diversity reports in the future.

All of these companies, of course, are free to hire whoever they please. They work in a field so hyper-competitive that Google was once willing to give employees offered jobs by Facebook counteroffers within an hour. But anyone who’s ever held a professional job knows who you know matters as much as what you know, and many people in our so-called melting pot continue to maintain friendships exclusively within their own race. Minorities are at a natural disadvantage trying to crack into a world where no one looks like them.

Meanwhile, software development is one of the fastest-growing job sectors in the U.S., expected to grow by 23% from 2012 to 2022, according to the Bureau of Labor Statistics. Historically underrepresented minorities are showing a greater interest in the field—20 percent of the students who graduated with a degree in computer and information sciences in 2012 were black or Hispanic, up from 16 percent a decade prior (at Google, by comparison, 5 percent of workers are black or Hispanic and 4 percent are multiracial). Making a commitment to diversity now means that a wider number of people will have access to these well-paying jobs in the future, a result that will help the tech sector remain prosperous and in-tune with cultural shifts as whites continue to decline as a percentage of the overall U.S. population.

Perhaps the companies that have yet to speak up on diversity fear the negative headlines that will come from admitting that their organizations are mostly comprised of white males. But an annual diversity report is a flag in the sand that indicates inclusiveness is important to a company, important enough to stake its reputation on. Diversity in the workforce has proven benefits for business, and it’s a savvy long-term marketing tool to help recruit employees who value diversity in their work life. The public pressure that naturally stems from such transparency will also encourage tech firms to partner with organizations already looking to boost involvement by women and minorities in computer science, such as Girls Who Code, Black Girls Code and the national societies for black and Hispanic engineers.

Obviously this is not just an issue that affects Silicon Valley. My own industry has seen a declining percentage of minorities working in newsrooms, and men still outnumber women in journalism jobs nearly two-to-one. We could use some more transparency on these issues as well. All U.S. companies with more than 100 employees are required to send detailed demographic data to a federal agency called the Equal Employment Opportunity Commission each year, so there’s no reason they can’t share it publicly. The European Union passed a law in April requiring firms with more than 500 employees to publicly release data related to workforce diversity, environmental sustainability and human rights.

It shouldn’t take a government mandate to introduce transparency, though. Right now the tech giants are uniquely positioned among American businesses to take a leadership role on the issue of diversity in the workplace. Our country’s two most valuable companies, Apple and Google, reside nine miles from each other in Silicon Valley. They and their smaller competitors are constantly crowing about how their disruptive products and progressive worldviews are changing the world for the better. Well, here’s a dead-simple way to help fix the world: take that race and gender data you’re already collecting and let everyone else see it. Public scrutiny of the information will inevitably beget positive change.

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