Not even a dent
Facebook’s “fake news” controversy, lax content monitoring, and allegations of liberal bias in its newsfeed ruffled a lot of feathers. Indeed Facebook seemed on the back foot in managing the media fallout.
But none of the controversies made the tiniest dent on Facebook coffers.
Better than expected
Earlier this week, Facebook posted their first quarter earnings, and the figures exceeded predictions by a fair margin. An addition of 80 million monthly users. $8.03 billion in revenue; marking a whopping 49 per cent growth. A stronger bottom line could hardly been imagined.
Interestingly, Google—roiled in YouTube ad placement controversy leading to massive ad pull outs—posted record profits as well.
Jointly, these performances make one thing clear—the wide and deep reach of both Google and Facebook are indispensable for advertisers.
Google and Apple account for 60 per cent of total digital ad revenues. Like Wall Street financial giants, in Silicon Valley, they are too big to fail.
“We had a good start to 2017,” Mark Zuckerberg said in a statement with Wednesday’s earnings release.
“We’re continuing to build tools to support a strong global community.”
The world’s largest social media platform makes most of its money by connecting advertisers to its massive 1.93 billion users.
New way to report
Facebook released the report in a format that caught many analysts by surprise. They did not report adjusted expenses, income, tax rate, and earnings per share, an odd departure from normal conventions of accounting.
“Given that stock is an important part of our compensation structure, we believe that investors should focus on our financial performance with stock-based compensation included,” chief financial officer David Wehner said.
Facebook has big plans for the future. Ad loads will flatline revenue, so the focus shall be on Instagram and video ads instead.
Just weeks earlier, at the f8 developer conference, Zuckerberg talked about Facebook’s next big bet on augmented reality (AR), especially in the smartphone platform. He labeled it as the company’s “Act 2”.
Almost throwing down the gauntlet to Snapchat, he said, “We need an open platform where any developer in the world can build for augmented reality without having to first build a camera and get a lot of people to use it.”
Zuckerberg also announced that the company would hire 3,000 additional employees over the next year to address the problem of violent content. The handsome profits of the latest quarter shall only augment those plans!