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This Is How Valuable Facebook's User Information Really Is

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In its self-description, Acxiom Corporation says it operates as "a marketing technology and services company" which "provides the data foundation for marketers around the world" and "offers products and services that enable people-based marketing." In short: Acxiom is a online data broker, however one with a twist: a broker which is intimately linked to the data collected by Facebook on its 2 billion users.

Which is a problem: on Wednesday, in the aftermath of the ongoing Cambridge Analytica scandal, Facebook announced it would end its "Partner Categories" program, which fed data to firms like Acxiom, and would will no longer let advertisers use information from 3rd party data brokers, again like Acxiom. 

“We believe this step, winding down over the next six months, will help improve people’s privacy on Facebook,” Graham Mudd, Facebook product marketing director, said in a statement about the change in policy on data brokers on Wednesday. The company declined to give details on the larger review of its practices.

Facebook's shutdown of the program is part of a broader effort to clean up the way it handles its users' data, and would limit advertisers’ ability to target users on the social network. And, as part of the changes that will be rolled out over the next few weeks, Facebook said it will no longer let advertisers use information from third-party data brokers, like Acxiom and Epsilon Data Management, in targeting of ads on its system.

So, on Thursday, Acxiom said it expects the change in Facebook policy to cost up to $25 million in revenue and profit. And, more importantly, it also cost Acxiom up to a third of its market cap, as Acxiom shares fell as much as 34%, the largest drop since 2001, resulting in a value loss of over $600 million earlier in the day.

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In other words, here is a visual representation of just how valuable Facebook user data really is...

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... to other companies. Clearly the value of information on Facebook's "product" - its user - to Facebook and Zuckerberg is exponentially greater.

Still, there was some confusion William Blair quickly chimed in that the selloff left Acxiom shares at attractive levels for investors, claiming that Acxiom doesn’t collect data from Facebook, although the market begs to differ.

The company hasn’t seen any effect so far on deal-related conversations and no one customer accounts for more than 10 percent of its revenue, Klauber said in a research note.

Finally, Not helping matters, On Thursday Ficus Investment Research came out with an unfavorable rating and price target of $20, implying another 15% downside for the shares, according to Bloomberg. Ficus pointed to Acxiom’s reliance on new products and upselling to drive growth, saying these are difficult to maintain in a competitive environment.

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