Facebook Inc. recorded lower third-quarter revenue than expected and warned that it is in the early stages of a transformation in its core businesses that will lead to slower growth and higher costs in the short term. The earnings report followed a hard 18 months for the firm, which has been under scrutiny for spreading disinformation, hate speech and leaks of user data. In addition to its revenues, Facebook's user growth also continued to take a hit.
Facebook is now on to the second part of its journey and, whether Zuckerberg likes to admit it or not, it has joined the club of established IT giants, from IBM to Microsoft and Apple. The projections sent shock waves through the market, causing Facebook value to fall by more than $100 billion, the largest single-day drop in Wall Street history.
"Over the last few years ... people were consuming more public content, like passive video consumption and news".
"The upcoming election will be a real test of the protections we've put in place", he added. Facebook has said it formed a "war room" to prevent disinformation and election meddling from foreign operatives through its site.
Facebook FB CEO Mark Zuckerberg saved around $128 million thanks to fortunately timed sales of his own company's stock. Revenue growth was down from the 42 per cent jump that Facebook had reported in the previous quarter. In the last quarter, however, Facebook made a profit of $5.1 billion, or $1.76 per share, which was above the average per-share estimate of $1.48.
Monthly active users averaged 2.27 billion, an increase of 10 percent year-over-year although analysts excepted 2.29 billion.More news: NFL Cheerleader Kneels for National Anthem Before San Francisco 49ers Game
Facebook's seemingly perpetual grapple with these issues was laid bare just hours later, when Business Insider revealed that it was able to run a fake political ad from Cambridge Analytica, the disgraced political consultancy that was banned from Facebook over a giant data breach.
Despite Facebook's mixed performance, some marketers say Facebook is more important than ever to their digital strategies. Importantly, Facebook grew revenue at a nice pace in the important United States and Canada markets.
With the myriad problems Facebook is facing, that passes for good news these days. The fourth quarter is still a big quarter for Facebook, as more people are on the platform talking to friends and family they won't see during the holidays, as well as kids being home from school and having nothing to do. In a shift from Facebook's roots, Zuckerberg acknowledged that people don't always want to share publicly.
The Facebook CEO would not be drawn on when revenue from Stories would match that from news feed advertising, but said it was trending in the right direction. Meanwhile, developing ads for stories "will take some time", he said.
"Our community and business continue to grow quickly, and now more than two billion people use at least one of our services every day", he said. It is also building a stable of original programming on Facebook Watch, its video service, to engage users, as well as working on efforts like an e-commerce marketplace, a jobs service and a dating service, he said. We started a roadmap, which we said was going to be about a three-year roadmap.