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A pedestrian walks in front of a new logo and the name ‘Meta’ on the sign in front of Facebook headquarters on October 28, 2021 in Menlo Park, California.
Justin Sullivan | Getty Images

With its name change to Meta, the company formerly known as Facebook is trying to eliminate what some employees have called a “brand tax” on apps like Instagram, Messenger and WhatsApp.

Meta CEO Mark Zuckerberg announced the rebranding on Thursday, following a brutal seven weeks of document dumps that showed Facebook knew of the harm its products cause and has refused to address them. But the brand tax dates as far back as the 2016 presidential election, when Facebook turned into a haven of hateful content and misinformation.

Facebook’s other services, most notably Instagram and Messenger, have struggled to distance themselves from the constant embarrassment that’s plagued their parent company over the past half-decade, according to people with knowledge of the matter.

Brand separation became particularly difficult in 2019, when Facebook announced it would tag all of its services with Facebook at the end of their names. Messenger became Messenger from Facebook, and the other apps turned into Instagram from Facebook and WhatsApp from Facebook.

Facebook said at the time that the rebranding was intended to provide clarity to users. The same was true for its Oculus virtual reality unit and business software offering Workplace, which also got the “from Facebook” label.

“This brand change is a way to better communicate our ownership structure to the people and businesses who use our services to connect, share, build community and grow their audiences,” the company said in a press release on Nov. 4, 2019.

But behind closed doors, Facebook wasn’t expressing concern about consumer confusion. Rather, the company was trying to restore the strength of its name after a series of public relations setbacks, most notably the Cambridge Analytica data hijacking scandal in 2018, several former employees told CNBC.

Facebook’s own brand was in the dumps. Zuckerberg decided to consolidate the branding because he thought associating Facebook with the company’s less-sullied services would help, said the former employees, who asked not to be named because the information was confidential. 

With an image of himself on a screen in the background, Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC.
Chip Somodevilla | Getty Images

Some employees advised Zuckerberg to follow the path taken by Google, which created the parent company name Alphabet in 2015, rather than attaching Facebook to everything, sources said.

Zuckerberg’s decision to instead showcase Facebook was not driven by data. On the contrary, he was presented with research showing that associating any of the company’s products with the Facebook brand caused trust to drop, said one former executive.

Another employee said that was seen in research done for Facebook’s video-calling device, Portal, announced in 2018. Data indicated that putting the name Facebook on it would reduce public trust. The company went with the name Facebook Portal anyway.

When asked for a comment for this story, a spokeswoman for the company directed CNBC to a Thursday post from Meta Chief Marketing Officer Alex Schultz.

“In 2019, we rolled out new branding that linked together all of our products, but still kept the Facebook name for both the company and our original app,” Schultz wrote. “But over time it was clear that the shared Facebook name could cause confusion, not only with people using products such as WhatsApp or Instagram, but also with constituencies we work with. Helping people have clarity when something is coming from the company versus the Facebook app is an important reason for this change.”

Instagram hurt the most

Instagram was hit particularly hard by the 2019 rebranding.

The photo app is used mostly by teens and young people, who have long had a negative view of Facebook. The “big blue app,” as Facebook is known, was seen as the place where parents and weird uncles go to share stories and comment on their relatives’ posts.

Instagram’s marketing employees began seeing, through quarterly brand tracking results, that the new label was causing harm.

They tried to make the “from Facebook” font smaller, not use it at all or play with the colors in a way that would hide the Facebook name, ex-employees said. Ultimately, they were overruled, according to one former employee.

Zuckerberg insisted that Facebook had turned Instagram into a screaming success since acquiring it for $1 billion in 2012, and it was time for Instagram to give back, a former executive recalled. 

Instagram marketers would eventually be measured by how well they tied the brands together. It was mandated by Zuckerberg and non-negotiable.

Messenger, by contrast, was given permission to create some sense of separation, according to multiple employees. 

Unlike Instagram, Oculus and WhatsApp, which were all acquired, Messenger was homegrown. Facebook turned it into a separate app in 2014. To attract younger users, Messenger was given the “blessing” a year ago to take some steps to improve the brand, two former employees said.

Messenger rolled out a new logo last year with a gradient color, predominantly purple, similar to Instagram’s logo. It was part of the Messenger team’s effort to position the app for Millennials and Gen Z users, who have been flocking to other services like TikTok.

Removing the Facebook name

As Meta, there’s no guarantee that Facebook’s brand tax dissipates.

But Zuckerberg has at least changed his approach, less than two years after adding “from Facebook” to all of his company’s main services.

The company has already started rebranding several of its units. The hardware division, previously known as Facebook Reality Labs, will now be called Reality Labs. The payments division, which was known as F2 (Facebook Financial), will now be Novi, the name of the company’s cryptocurrency wallet product. 

Zuckerberg remains defiant following a series of document leaks by ex-employee Frances Haugen, the whistleblower, and the many stories that followed from the Wall Street Journal and other publications. One of the most notable stories showed that the company knew Instagram was detrimental to teenagers’ mental health and was doing little about it. 

“My view is that what we are seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company,” Zuckerberg said after the company’s quarterly earnings report earlier this week.

Some of the documents released showed that the number of teenage users of the Facebook app in the U.S. has declined by 13% since 2019, with a projected drop of 45% over the next two years, according to The Verge. Additionally, Facebook researchers found that the company was not expecting people born after 2000 to join the social network until they were 24 or 25 years old, if they ever joined, Bloomberg reported.

Facebook addressed that issue on Monday in its earnings report. The company said it would begin pivoting both Instagram and Facebook to feature more videos from the Reels product in an effort to attract young users.

Zuckerberg said the company will try to make all of its services appealing to young adults, but he acknowledged that “this shift will take years, not months, to fully execute.”

Moving away from the Facebook brand is the first big step.

WATCH: The metaverse is things you can do with goggles strapped to your face

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OpenAI CEO Sam Altman denies sexual abuse allegations made by his sister in lawsuit

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OpenAI CEO Sam Altman denies sexual abuse allegations made by his sister in lawsuit

OpenAI CEO Sam Altman visits “Making Money With Charles Payne” at Fox Business Network Studios in New York on Dec. 4, 2024.

Mike Coppola | Getty Images

OpenAI CEO Sam Altman’s sister, Ann Altman, filed a lawsuit on Monday, alleging that her brother sexually abused her regularly between the years of 1997 and 2006.

The lawsuit, which was filed in U.S. District Court in the Eastern District of Missouri, alleges that the abuse took place at the family’s home in Clayton, Missouri, and began when Ann, who goes by Annie, was three and Sam was 12. The filing claims that the abusive activities took place “several times per week,” beginning with oral sex and later involving penetration.

The lawsuit claims that “as a direct and proximate result of the foregoing acts of sexual assault,” the plaintiff has experienced “severe emotional distress, mental anguish, and depression, which is expected to continue into the future.”

The younger Altman has publicly made similar sexual assault allegations against her brother in the past on platforms like X, but this is the first time she’s taken him to court. She’s being represented by Ryan Mahoney, whose Illinois-based firm specializes in matters including sexual assault and harassment.

The lawsuit requests a jury trial and damages in excess of $75,000.

In a joint statement on X with his mother, Connie, and his brothers Jack and Max, Sam Altman denied the allegations.

“Annie has made deeply hurtful and entirely untrue claims about our family, and especially Sam,” the statement said. “We’ve chosen not to respond publicly, out of respect for her privacy and our own. However, she has now taken legal action against Sam, and we feel we have no choice but to address this.”

Their response says “all of these claims are utterly untrue,” adding that “this situation causes immense pain to our entire family.” They said that Ann Altman faces “mental health challenges” and “refuses conventional treatment and lashes out at family members who are genuinely trying to help.”

Sam Altman has gained international prominence since OpenAI’s debut of the artificial intelligence chatbot ChatGPT in November 2022. Backed by Microsoft, the company was most recently valued at $157 billion, with funding coming from Thrive Capital, chipmaker Nvidia, SoftBank and others.

Altman was briefly ousted from the CEO role by OpenAI’s board in November 2023, but was quickly reinstated due to pressure from investors and employees.

This isn’t the only lawsuit the tech exec faces.

In March, Tesla and SpaceX CEO Elon Musk sued OpenAI and co-founders Altman and Greg Brockman, alleging breach of contract and fiduciary duty. Musk, who now runs a competing AI startup, xAI, was a co-founder of OpenAI when it began as a nonprofit in 2015. Musk left the board in 2018 and has publicly criticized OpenAI for allegedly abandoning its original mission.

Musk is suing to keep OpenAI from turning into a for-profit company. In June, Musk withdrew the original complaint filed in a San Francisco state court and later refiled in federal court. 

Last month, OpenAI clapped back against Musk, claiming in a blog post that in 2017 Musk “not only wanted, but actually created, a for-profit” to serve as the company’s proposed new structure.

WATCH: OpenAI unveils for-profit plans

OpenAI unveils for-profit plans

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Meta employees criticize Zuckerberg decisions to end fact-checking, add Dana White to board

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Meta employees criticize Zuckerberg decisions to end fact-checking, add Dana White to board

This photo illustration created on January 7, 2025, in Washington, DC, shows an image of Mark Zuckerberg, CEO of Meta, and an image of the Meta logo. 

Drew Angerer | Afp | Getty Images

Meta employees took to their internal forum on Tuesday, criticizing the company’s decision to end third-party fact-checking on its services two weeks before President-elect Donald Trump’s inauguration.

Company employees voiced their concern after Joel Kaplan, Meta’s new chief global affairs officer and former White House deputy chief of staff under former President George W. Bush, announced the content policy changes on Workplace, the in-house communications tool. 

“We’re optimistic that these changes help us return to that fundamental commitment to free expression,” Kaplan wrote in the post, which was reviewed by CNBC. 

The content policy announcement follows a string of decisions that appear targeted to appease the incoming administration. On Monday, Meta added new members to its board, including UFC CEO Dana White, a longtime friend of Trump, and the company confirmed last month that it was contributing $1 million to Trump’s inauguration.

Among the latest changes, Kaplan announced that Meta will scrap its fact-checking program and shift to a user-generated system like X’s Community Notes. Kaplan, who took over his new role last week, also said that Meta will lift restrictions on certain topics and focus its enforcement on illegal and high-severity violations while giving users “a more personalized approach to political content.”

One worker wrote they were “extremely concerned” about the decision, saying it appears Meta is “sending a bigger, stronger message to people that facts no longer matter, and conflating that with a victory for free speech.”

Another employee commented that by “simply absolving ourselves from the duty to at least try to create a safe and respective platform is a really sad direction to take.” Other comments expressed concern about the impact the policy change could have on the discourse around topics like immigration, gender identity and gender, which, according to one employee, could result in an “influx of racist and transphobic content.”

A separate employee said they were scared that “we’re entering into really dangerous territory by paving the way for the further spread of misinformation.”

The changes weren’t universally criticized, as some Meta workers congratulated the company’s decision to end third-party fact checking. One wrote that X’s Community Notes feature has “proven to be a much better representation of the ground truth.” 

Another employee commented that the company should “provide an accounting of the worst outcomes of the early years” that necessitated the creation of a third-party fact-checking program and whether the new policies would prevent the same type of fall out from happening again.

As part of the company’s massive layoffs in 2023, Meta also scrapped an internal fact-checking project, CNBC reported. That project would have let third-party fact checkers like the Associated Press and Reuters, in addition to credible experts, comment on flagged articles in order to verify the content.

Although Meta announced the end of its fact-checking program on Tuesday, the company had already been pulling it back. In September, a spokesperson for the AP told CNBC that the news agency’s “fact-checking agreement with Meta ended back in January” 2024. 

Dana White, CEO of the Ultimate Fighting Championship gestures as he speaks during a rally for Republican presidential nominee and former U.S. President Donald Trump at Madison Square Garden, in New York, U.S., Oct. 27, 2024.

Andrew Kelly | Reuters

After the announcement of White’s addition to the board on Monday, employees also posted criticism, questions and jokes on Workplace, according to posts reviewed by CNBC.

White, who has led UFC since 2001, became embroiled in controversy in 2023 after a video published by TMZ showed him slapping his wife at a New Year’s Eve party in Mexico. White issued a public apology, and his wife, Anne White, issued a statement to TMZ, calling it an isolated incident.

Commenters on Workplace made jokes asking whether performance reviews would now involve mixed martial arts style fights.

In addition to White, John Elkann, the CEO of Italian auto holding company Exor, was named to Meta’s board.

Some employees asked what value autos and entertainment executives could bring to Meta, and whether White’s addition reflects the company’s values. One post suggested the new board appointments would help with political alliances that could be valuable but could also change the company culture in unintended or unwanted ways.

Comments in Workplace alluding to White’s personal history were flagged and removed from the discussion, according to posts from the internal app read by CNBC.

An employee who said he was with Meta’s Internal Community Relations team, posted a reminder to Workplace about the company’s “community engagement expectations” policy, or CEE, for using the platform.

“Multiple comments have been flagged by the community for review,” the employee posted. “It’s important that we maintain a respectful work environment where people can do their best work.” 

The internal community relations team member added that “insulting, criticizing, or antagonizing our colleagues or Board members is not aligned with the CEE.”

Several workers responded to that note saying that even respectful posts, if critical, had been removed, amounting to a corporate form of censorship.

One worker said that because critical comments were being removed, the person wanted to voice support for “women and all voices.”

Meta declined to comment.

— CNBC’s Salvador Rodriguez contributed to this report.

WATCH: Meta adds Dana White, John Elkann, and Charlie Songhurst to board of directors.

Meta adds Dana White, John Elkann, and Charlie Songhurst to board of directors

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Bitcoin drops below $98,000 as Treasury yields pressure risk assets

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Bitcoin drops below ,000 as Treasury yields pressure risk assets

Nicolas Economou | Nurphoto | Getty Images

Bitcoin slumped on Tuesday as a spike in Treasury yields weighed on risk assets broadly.

The price of the flagship cryptocurrency was last lower by 4.8% at $97,183.80, according to Coin Metrics. The broader market of cryptocurrencies, as measured by the CoinDesk 20 index, dropped more than 5%.

Crypto stocks Coinbase and MicroStrategy fell more than 7% and 9%, respectively. Bitcoin miners Mara Holdings and Core Scientific were down about 5% each.

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Bitcoin drops below $98,000

The moves followed a sudden increase in the 10-year U.S. Treasury yield after data released by the Institute for Supply Management reflected faster-than-expected growth in the U.S. services sector in December, adding to concerns about stickier inflation. Rising yields tend to pressure growth oriented risk assets.

Bitcoin traded above $102,000 on Monday and is widely expected to about double this year from that level. Investors are hopeful that clearer regulation will support digital asset prices and in turn benefit stocks like Coinbase and Robinhood.

However, uncertainty about the path of Federal Reserve interest rate cuts could put bumps in the road for crypto prices. In December, the central bank signaled that although it was cutting rates a third time, it may do fewer rate cuts in 2025 than investors had anticipated. Historically, rate cuts have had a positive effect on bitcoin price while hikes have had a negative impact.

Bitcoin is up more than 3% since the start of the year. It posted a 120% gain for 2024.

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