As we become an increasingly tech-reliant society, Internet connectivity is one of the fundamental lifelines keeping our everyday processes running. But like any other technological creation, glitches do occasionally occur. One such occurrence where we see significant financial impact is a web outage.
Facebook was already having a bad day yesterday: shares tanked after The Wall Street Journal revealed the identity of the source for its scathing exposé of the social media giant — a former Facebook employee turned whistleblower. Later, at around 4pm GMT, Facebook’s stock wasn’t the only thing down — an outage of the social network, along with its suite of apps including photo-sharing platform Instagram and messaging app WhatsApp, affected billions of users around the world.
This wasn’t the only Facebook outage in recent memory. Instagram went down for 16 hours just last month; the last time all Facebook platforms went offline was in June. Another major outage occurred in April, when access was disrupted for millions of users, as well as last December when multiple messaging services crashed.
Outages do not only plague Facebook, of course. Just to name a few of the significant digital blackouts in the past year alone:
- A software bug at cloud delivery platform Akamai Technologies in June briefly knocked out hundreds of sites across the globe during peak Asian business hours, affecting the Hong Kong Stock Exchange as well as the US’ four largest airlines.
- Akamai’s outage came on the heels of Fastly’s massive connection failure earlier that month, when a slew of popular Internet sites and services such as Amazon, PayPal, and Spotify were down, along with top news providers and even the British government’s website.
- eToro users may recall the Microsoft Azure outage back in March that affected our platform as well.
Web service outages are inevitable at times, but they are, fortunately, usually quite brief and only rarely caused by cyber attacks. However, occasionally we get a major disruption such as this one. The spate of recent outages have also underscored how much power a small number of companies have over businesses staying connected online.
These events are extremely disruptive to industries of all types and of course, each outage spooks investors and the affected stocks tend to slump as a result of the crisis. The longer it takes for service to return to normal, the worse the financial consequences tend to be. Although Fastly was able to resolve its technical issues fairly quickly, analysts subsequently downgraded the stock, causing it to fall 12%. Akamai’s stock dipped as well, but less severely (0.15%), thanks to an extremely quick response from the network provider which had most of the affected websites back online within the hour. Facebook’s outage, however, was a six-hour disruption in connectivity — the social network’s longest outage in over a decade — that resulted in steep losses to the global economy estimated at more than $1 billion US dollars. FB stock, already in the red, plunged even further, falling nearly 5% by the time the market closed yesterday, and even more after hours.
The content that will be discussed is intended for information and educational purposes only and should not be considered investment advice or investment recommendation.