Mark Zuckerberg has an image problem – so why is Meta's business booming?

ByLily Jamali North America Technology correspondent.

Key points

• "Once the public has stopped trusting you, it's kind of a downward spiral, " notes associate professor Alison Taylor of New York University's Stern School of Business.
• And this summer, Meta struck a high-profile $18bn settlement with 48 US states, plus the District of Columbia and three US territories.
• Just two days after Zuckerberg's keynote at Meta Connect, another New Mexico jury discovered Meta lied concerning how Facebook applied personal information.
• And Zuckerberg is unpopular: last year, a Pew Research Center poll discovered that two-thirds of Americans had an unfavourable opinion of him.
• His reputation is unlikely to be supported by The Social Reckoning, a film by Aaron Sorkin issued this week.

Mark Zuckerberg was just three minutes into his keynote speech at the company's annual Meta Connect product event last month when his tone turned almost wistful.

"Building is an act of love, " he remarked, glancing down at the ground with his hands in his pockets. "It's how we impart what we believe, and we pour our hearts and our souls into what we make."

As well as a Tamagotchi-like AI gadget users can attach to their wrists, speaking to hundreds of analysts and developers, Zuckerberg proceeded to share news regarding Meta's latest AI products: its new agentic chatbot Muse, a slew of smart glasses.

It was a conference focused on new technologies – but still, it's perhaps notable that during a presentation lasting almost an hour, Zuckerberg did not mention two of his most popular products, Instagram and Facebook, the social media platforms that have assisted Meta become a $2tn firm.

For much of the past year, Meta has been embroiled in a series of legal actions, accused of deliberately designing products that are addictive to young users.

That has led to the release of internal emails, corporate documents and whistleblower testimony that personal injury lawyers and prosecutors nationwide have wielded to create their case.

His reputation is unlikely to be supported by The Social Reckoning, a film by Aaron Sorkin issued this week. It's regarding whistleblower claims that Meta executives were aware of their products harming young residents. Succession actor Jeremy Solid plays Zuckerberg as a "full-on villain", according to a review in the Hollywood Reporter, "stoically arguing that even the slightest gesture of responsibility is anathema where money is concerned".

Some speculate that this is Meta's "Big Tobacco" moment, with a consensus forming against the firm, and the social media industry as a whole.

But the truth seems to be more complicated. Despite months of bad press, in the real world Meta's products are doing better than ever. Employ of its apps continues to rise, and users are already flocking to its new AI assistant.

It raises the question: can anything really clip Meta's wings? Or is it now something of a 'Teflon' firm, with scandals simply bouncing off it? It's certainly been a year of bad headlines for Meta.

Last summer, Reuters made public that Meta allowed its chatbots to "engage a child in conversations that are romantic or sensual", and provide false medical information to users.

According to Meta has revised those policies and, such responses should never have been allowed.

And this year, bills have been mounting. In March, a jury offered $6m (£4.5m) to a 20-year-old California woman who maintained she suffered mental health harms related to her employ of Meta's Instagram and Google's YouTube.

Around the same time, New Mexico became the first state to succeed in a lawsuit against Meta over child safety problems. A jury discovered the business had failed to warn the public regarding the dangers its platforms posed to kids. Meta was fined a total of $942m. The judge called Meta a "public nuisance" akin to air pollution.

Meta notes it disagrees with the verdicts and is appealing both cases.

In May, Meta was among the social firms that avoided a trial by settling a case brought by a Kentucky school district that maintained their product design had led to a youth mental health crisis. Meta reportedly agreed to pay $9m, the most of any defendant.

And this summer, Meta struck a high-profile $18bn settlement with 48 US states, plus the District of Columbia and three US territories. Meta denied wrongdoing as part of the settlement, and during the five-day trial it maintained that it had worked extensively over the years to create its platforms safer for young users, pouring resources into testing and research. As part of the accord, the firm promised to enact two-hour daily time limits for young users, along with night-time blocks on apply, muted notifications during school hours, and other changes.

In practice, the firm faces other lawsuits too, including one starting afterwards this month in Los Angeles, additionally related to alleged social media addiction among young users.

Meanwhile, a number of countries have moved to ban social media for children entirely, starting with Australia last December. Social media firms are broadly disliked, even while their products remain wildly popular. A Reuters/Ipsos survey suggests that 85% of Americans think social media can be addictive for children, and 61% backing greater administration oversight. To some, the trust matter feels existential.

"It feels like. The trust deficit is so big, I just don't know that they're going to be able to recover."

But despite those high-profile cases, the firm noted that the number of individuals using some of its apps (like Instagram and WhatsApp) has risen 3% year on year and this year's second quarter revenue was up 28% compared with the same period in 2025.

While it has agreed to temper its pursuit of the teen market (which plenty of brands eagerly cultivate to build their future user base), the business has noted that teens accounted for less than 1% of its revenue anyway. Competitors TikTok and Google's YouTube are more popular with young users.

Since it prevented some Meta bosses (including Zuckerberg) from having to provide testimony, and halted the release of further internal documents, while allowing the business to avoid admitting wrongdoing, and the company's settlement with the 48 states was widely considered a massive win for Meta. The company's stock cost surged 4% immediately after the announcement, and is up more than 25% over the last month.

One view popular among critics is that the firm has tested consumer tolerance for bad behaviour and until now, its business has mostly managed to withstand the blowback. In other words, individuals will continue to apply the products even if they don't like the firm.

"I think they're in a remarkably good position that I didn't expect them to be in, " notes Patrick Moorhead, founder and CEO of Moor Insights & Strategy. Meta's new AI agent. Nevertheless, Meta's move into AI depends partly on rebuilding public trust.

Last month, the firm rolled out its new AI personal assistant app, Muse. Crucially, Muse is an AI agent, meaning it can carry out tasks in multiple stages and work on something over a number of hours (in contrast to chatbots like ChatGPT. It tend to do one task at a time).

It's the first AI agent from a major tech firm to become publicly available. A New York Times tech reporter who applied the app for two weeks states he was "blown away"; the app called his dental insurer on his behalf, ordered him groceries and tracked his credit card spending in a spreadsheet.

But Muse works best when users hand over some of their most personal information to the firm, including credit card information, purchase histories and access to email inboxes.

It's a major ask for a business whose reputation on privacy has been sullied, starting a decade ago with the Cambridge Analytica scandal. It followed the revelation that the data of millions of Facebook users was breached and applied by a political consulting firm.

Just two days after Zuckerberg's keynote at Meta Connect, another New Mexico jury discovered Meta lied concerning how Facebook applied personal information. (The firm has stated it disagrees with the verdict and will defend itself against what it notes are efforts to distort its record.).

So are customers willing to hand over that data for the convenience of using Muse?

Some users say yes. Since its launch one month ago, Muse already has more than five million downloads and more than three million weekly active users – outpacing the adoption of ChatGPT when that was first introduced, in the North American market.

Zuckerberg has laid out a vision in which Muse couples with an ever-expanding line-up of Meta AI smart glasses, enabling users to summon hands-free what he calls "personal superintelligence".

Meta clearly has major aims for its smart glasses. "I think they're making an investment to position themselves as a category leader, " notes Kate Winick, principal analyst at Forrester, covering social media and influencers. "However big this category turns out to be, they will own it – for now."

Meanwhile, the glasses are divisive, and have been labelled by some as "pervert glasses" since they can be employed to film covertly. The firm has moved to stop users from tampering with the light that indicates a photo or video is being captured. Zuckerberg additionally just unveiled new audio-only smart glasses, an apparent bid to quell privacy reservations. But the company's most strident critics remain wary.

"Consumers know that Meta has challenges, and that to date we haven't been able to trust them to produce their products safe for children. So why would a consumer want to trust them with some of their most private and sensitive information?" notes Brooke Istook of the Heat Initiative, a campaign group.

In his speech, Zuckerberg briefly addressed the sensitive matter of privacy. At one point during his talk, an image flashed on the screen behind him of its Muse mascot embracing a blue padlock.

For now, mark Zuckerberg has an image problem – so why is Meta' s business remains the part of the story worth watching, and further updates are likely as more details are confirmed.