Facebook continues to grow, but black clouds are gathering on the horizon
– We are proud that people can rely on our services to stay connected when they cannot always be together – said Mark Zuckerberg during the presentation of Facebook’s good results.
On the brink of an economic crisis, big tech companies are reporting great financial results for a very difficult quarter. Apple has proved that the coronavirus has no chance against its business. Facebook also showed very good results marked by increases.
In the case of Facebook, this is important as the company had to deal with numerous boycotts of advertisers in recent months. Looking at the financial results and the increase in advertising revenues, which is the company’s main source of income, it can be said that the actions against Facebook were rather symbolic. Which does not mean that they did not harm his image.
Facebook continues to grow
And this in two dimensions: financial and number of users. About 11 percent The company’s revenue increased compared to the same period last year (from USD 16.8 billion in the second quarter of 2019 to USD 18.6 billion in the second quarter of 2020). It should be mentioned that it was not a quarter of record revenues. In the fourth quarter of 2019, Facebook recorded $ 21 billion. revenue.
The company’s net profit increased by 98%. year on year (from $ 2.6 billion to $ 5.1 billion), but in the past the company boasted higher figures of up to $ 7.3 billion. (Q4 2019)
There would be no increase in revenues and profit without the increase in the number of users and, consequently, the number of displayed advertisements. Facebook therefore boasts that the number of active users per day has increased by 12 percent compared to the same quarter of 2019. and amounted to 1.79 billion.
A similar 12% increase applies to active users per month. It was 2.7 billion.
For the entire family of Facebook services (Facebook, Instagram, Messenger, WhatsApp), the number of active users per month increased to 3.14 billion and was 14% higher. than Q2 2019
Facebook is blowing cold
In the quarterly report, we can read that the COVID-19 pandemic has affected the American giant.
(…) Like all companies, we are facing a period of unprecedented uncertainty as to the prospects of our business, we read .
The pandemic was to affect the growth of users higher than in previous quarters, which is understandable in the context of the implementation of the principle of social distance in many countries around the world.
Facebook predicts that in Q3 2020, the number of daily and monthly users may be similar or slightly lower in most places around the world. This will be related to the easing of restrictions.
The revenue growth dynamics in the third quarter is also expected to be similar. However, Facebook emphasizes what factors will affect its business. Mentioned are: macroeconomic uncertainty, a decline in the growth of user involvement after the withdrawal of restrictions, suspension of marketing spending by some advertisers and finally regulations on ad targeting.
What’s next for Facebook?
This is a question from the fringes of economics, political science and sociology. The American Congress heard Mark Zuckerberg the day before yesterday along with the heads of Apple, Amazon and Google. The tech giants find themselves in an uncomfortable position. Not only do politicians accuse them of creating monopolies, they also drew evidence of it.
In the case of Facebook, the accusations of congressmen are related to the takeover of Instagram and WhatsApp, which were supposed to be nothing more than a form of neutralizing competition. Congressman Jerry Nadler even said that we were dealing with a type of takeover that is supposed to be prevented by antitrust law.
The future of Facebook is therefore more uncertain than before. The company has to fight battles on many fronts. On the one hand, prove that users have a choice (and prevent division into smaller companies), on the other hand, face the consequences of the global economic crisis, and finally, on the third, the loss of users’ trust.
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Facebook continues to grow, but black clouds are gathering on the horizon
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