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Hedgeye The trust issues facing social media giants

Trust is an integral part of a company’s investment potential.

Without trust from consumers or investors, or both, companies’ share price performances can suffer. This is particularly true of social media companies, which deal in individuals’ data. In this article, Neil Howe, managing director of demography at Hedgeye, explores the current trust issues.

Fully 78% of 18- to 29-year-olds have little to no trust in Facebook [FB] to do the right thing, according to a new poll from the Harvard Kennedy School Institute of Politics. Young Americans are also more likely to say that social media’s impact on society has been negative, not positive.

Three years into the “tech-lash” (see Tech-Lash Batters Silicon Valley), surveys like these really drive home how starkly public opinion towards social media companies has changed.

Of the 16 institutions that are included in this poll, Facebook [FB] is the one that is least trusted by 18- to 29-year-olds, with 39% saying they “never” trust the site and another 39% saying they only trust it “some of the time.”

Twitter [TWTR] isn’t doing much better. Fully 35% of young adults never trust the site, and 43% say they trust it some of the time. Bottom line: Facebook, Twitter, and Amazon [AMZN] are near the top of youth's never-trust list — right up there with Wall Street, the media, and the United States Congress. Google [GOOGL] fares somewhat better: Only 18% never trust the site.

Who do millennials trust? Earning the highest marks is “[their] college administration,” which is trusted by 58% of this group at least some of the time, and never trusted by only 9%.

Next going down the list are the Supreme Court of the United States, their local government, the US military, and the police. Anti-authority young boomers these are not.

This poll has also some interesting findings on partisanship and the political climate. Nearly a third of young adults (31%) said that politics has gotten in the way of a friendship for them.

The most polarising issue is race relations. Fully 44% of young Americans said that they could not be friends with someone who disagreed with them on race relations. But there are huge differences by party ID: 60% of US president Joe Biden voters agreed with this, compared to only 22% of former US president Donald Trump voters.

Across most issues, Biden voters are more likely to consider different political stances a deal breaker, including immigration, supporting Trump, police reform, and climate change. The only issue where the difference between Biden voters and Trump voters is small (less than five percentage points) is abortion.

What’s more, younger Americans are more likely to feel like politics will get in the way of their friendships. Among 18- to 24-year-olds, for instance, 47% say views on race relations would cause a problem.

A smaller share (41%) of 25- to 29-year-olds said the same. This pattern holds for every issue the poll asked about.

Does this youthful stubbornness say anything special about the politics of this generation?

Maybe not. In fact, Americans of all ages have lately been feeling unusually stressed about politics — to the point of fearing the consequences of victory for the "other party" and reporting they have few if any friends who are voting for the "other party."

Arguably, this is harder on people when they're breaking long-established friendships than when they're in college and are just making them. As for race, again, that's becoming a flashpoint for every bracket. According to 2020 exit polls, for instance, protests over police violence were an "important" factor for 67% of voters and "the single most important factor" for 19%.

There is, perhaps, another side to these rising adults. Overwhelmingly — and this includes 85% of Biden voters and 73% of Trump voters — they agree that we need more "open-mindedness" in politics.

85%

Young Biden voters agree politics should be more open-minded

85%

Young Trump voters agree politics should be more open-minded

A decisive majority of nearly 60% agree that "politics has become too partisan," a 10-point increase since 2010. And unlike older Americans, they remain much more hopeful than fearful about America's future. Young non-white Americans are the most hopeful of all.

So think about it. Let's say you really do believe that America would be a lot happier place if people could discuss politics with their passions in check.

Well, that's one more good reason to hate on Facebook and Twitter.

This article was written and published by Hedgeye. The original article, published on 7 May, can be found here.

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