Facebook’s quarterly earnings are a bright spot amid a sea of bad headlines

Facebook reported strong earnings in the first quarter, marking good news for a company that has been challenged with a torrent of bad headlines, a testimony from Congress focused on its executive director and what has been configured as its greatest existential crisis. till the date.

The Cambridge Analytica data privacy scandal came to light at the end of the first quarter and, therefore, we will not see if it had a substantial impact on Facebook's business until the next quarter. That said, the technology giant was able to recover from the daily active fall of the user who suffered last year, when its US DAU number. UU And Canada was reduced to 184 million and marked the first time that the use of Facebook decreased in the primary market of the company. The fall was mainly attributable to Facebook's adjustments with News Feed to favor more meaningful interactions, what CEO Mark Zuckerberg said in November was a long-term plan to improve the product and avoid more widespread abuse by bad actors.

This last quarter, Facebook added 49 million new daily active users for a total of 1.45 billion daily users, or an increase of 3.5 percent compared to the previous quarter. The number of daily active users in the US UU And Canada also rose again to 185 million, after that historical slowdown in the last quarter. The company recorded revenues of $ 12 billion, representing an increase of 50 percent year-over-year compared to $ 8 billion last year. Those metrics surpass analysts' expectations, and Facebook shares have risen almost seven percent in after-hours operations.

At the same time, Zuckerberg and operations director Sheryl Sandberg gave assurance about the privacy of user data while acknowledging the damage caused by the Cambridge Analytica scandal that affected more than 87 million Facebook users , according to some estimates.

Zuckerberg opened the earnings list discussing the problems that Facebook had weathered, including fake news and "application developers and data privacy." He said the technology giant would do more to "make sure those tools are used forever." Sandberg said that "we have always incorporated privacy into our ads" and that with the new European data privacy rules that will come into effect on May 25, as well as the new policies launched by Facebook, users will be better protected against violations of Privacy.

Zuckerberg commented his testimony before Congress, calling it an "important moment" to "answer all the questions about Cambridge Analytica and make sure it does not I do it "" It happens again. " He said his team was working on better policies and ways to prevent foreign interference in elections, mentioning the upcoming elections this year in Mexico and Brazil. Still, the representatives say they have not yet received any response from Zuckerberg because of the numerous times he told members of Congress that he and his team would "follow up" later.

Perhaps the only sign of problems in today's earnings report can be found in Facebook's growth metrics. The number of daily users of Facebook increased to 1.45 billion, an annual 13 percent, and its monthly users are now 2.2 billion, also 13 percent year after year. However, those growth rates are particularly low when compared to the results of the first quarter of Facebook last year or with the rates of 2016 or 2015.

In the first quarter of 2017, Facebook increased its daily active users in 18 percent, and in the first quarter of 2016, that metric increased by 16 percent. Given the hashtag #DeleteFacebook was trending for some time when the Cambridge Analytica scandal began to gain strength in the first quarter queue, the number of users deactivated by Facebook and its approach to privacy could have been a factor in why growth of the Facebook user shrinking.

Still, in general, Facebook showed good results despite its current reputation in dispute. The second quarter of 2018 should shed more light on whether the Cambridge Analytica situation has had a measurable impact on the company's results.

Leave a Reply