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Facebook Profit Escalates with No Major Impact from Russia and it’s Advertisements

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Facebook Profit
Facebook Profit escalates declares CEO of Facebook. Pixabay.
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United States, November 2: Facebook reported better-than-expected quarterly profit and revenue on Wednesday as it pushed further into video advertising, showing no sign of financial damage from the controversy over how Russia used the social network in an attempt to sway voters in the 2016 U.S. election.

The company’s shares, which hit a record earlier in the day, initially rose in after-hours trading, but later fell into negative territory. They have gained almost 60 percent this year.

Chief Executive Mark Zuckerberg condemned Russia’s attempts to influence last year’s election through Facebook posts designed to sow division, and repeated his pledge to ramp up spending significantly to increase the social network’s security, something he said on Wednesday would affect profits.

“What they did is wrong, and we are not going to stand for it,” Zuckerberg said of the Russians, on a conference call with analysts.

Facebook is at the center of a political storm in the United States for the ways it handles paid political ads and allows the spread of false news stories. U.S. lawmakers have threatened tougher regulation and fired questions at Facebook General Counsel Colin Stretch in hearings this week.

ALSO READ : Facebook does not Hire Journalists says Sheryl Sandberg 

Facebook, in a series of disclosures over two months, has said that people in Russia bought at least 3,000 U.S. political ads and published another 80,000 Facebook posts that were seen by as many as 126 million Americans over two years. Russia denies any meddling.

Facebook’s total advertising revenue rose 49 percent in the third quarter to $10.14 billion, about 88 percent of which came from mobile ads.

Analysts on average had expected total ad revenue of $9.71 billion, according to data and analytics firm FactSet.

Facebook in the third quarter gave advertisers for the first time the ability to run ads in standalone videos, outside the Facebook News Feed, and the company is seeing good early results, Chief Operating Officer Sheryl Sandberg told analysts on a conference call.

“Video is exploding, and mobile video advertising is a big opportunity,” Sandberg said.

More than 70 percent of ad breaks up to 15 seconds long were viewed to completion, most with the sound on, she said.

The 49 percent increase in total ad sales in the latest quarter compares with a 47 percent rise in the prior quarter and a 51 percent jump in the first quarter.

Facebook has been warning for more than a year about reaching a limit in “ad load”, or the number of ads the company can feature in users’ pages before crowding their News Feed.

Advertisers seem unfazed, though, spending heavily as the social network continues to attract users.

The nearly 50 percent jump in ad revenue “is phenomenal, especially when for the past few quarters they’ve been trying to bring that expectation way, way down. Yet it keeps going up,” Tigress Financial Partners analyst Ivan Feinseth said.

Of the Russia scandal enveloping Facebook publicly, Feinseth said: “In the bigger picture, I don’t think it’s a really big factor.”

Facebook Profit
Mark Zuckerberg repeated his pledge to ramp up spending significantly to increase the social network’s security which would affect Facebook profit.Wikimedia.

The company’s performance was strong in comparison with smaller social media firms Snap Inc and Twitter, Wedbush analyst Michael Pachter said.

“Facebook grew revenues by $3.3 billion year-over-year for the quarter. This is more than Twitter and Snapchat generate combined for the full year,” he said.

Facebook said about 2.07 billion people were using its service monthly as of Sept. 30, up 16 percent from a year earlier.

Analysts on average had expected 2.06 billion monthly active users, according to FactSet.

Net income rose to $4.71 billion, or $1.59 per share, from $2.63 billion, or 90 cents per share.

Analysts on an average were expecting the company to earn $1.28, according to Thomson Reuters I/B/E/S.

Total revenue increased 47.3 percent to $10.33 billion beating analysts estimate of $9.84 billion, according to Thomson Reuters I/B/E/S.

Various U.S. investigations into how Russia may have tried to sway American voters in the months before and after last year’s elections are hanging over Facebook and its competitors.

There is also proposed U.S. legislation that would extend rules governing political ads on television, radio and satellite to also cover digital advertising.

“We expect more scrutiny about Facebook’s ad system ahead,” analyst Debra Aho Williamson of research firm eMarketer said in a note. “We’re also monitoring for any signs that this investigation will have a material impact on ad revenue.” (VOA)

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Twitter Gets Investigated By Ireland Over Data Collection

Both Facebook and Twitter have faced lawsuits for collecting data on links shared in private messages

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Twitter CEO
Twitter on a smartphone device. VOA

 Twitter is reportedly facing an investigation by privacy regulators in Ireland over data collection in its link-shortening system, the media reported.

Privacy regulators in Ireland have launched an investigation into exactly how much data Twitter collects from t.co, its URL-shortening system, The Verge reported late on Saturday.

The investigation stems from a request made by UK professor Michael Veale under the General Data Protection Regulation (GDPR), a comprehensive European privacy law under which EU citizens have a right to request any data collected on them from a given company.

Facebook, Twitter
Facebook COO Sheryl Sandberg, left, accompanied by Twitter CEO Jack Dorsey are sworn in before the Senate Intelligence Committee hearing on ‘Foreign Influence Operations and Their Use of Social Media Platforms’ on Capitol Hill. VOA

But when Veale made that request to Twitter, the company claimed it had no data from its link-shortening service. The professor was sceptical, and wrote to the relevant privacy regulator to see if Twitter was holding back some of his data.

Now, that investigation seems to be underway. The investigation, first reported by Fortune, is confirmed in a letter obtained by The Verge, sent to Veale by the office of the Irish Data Privacy Commissioner, the report said.

Initially designed as a way to save characters in the limited space of a tweet, link-shortening has also proved to be an effective tool at fighting malware and gathering rudimentary analytics.

Twitter
Twitter Chief Executive Officer Jack Dorsey testifies before a Senate Intelligence Committee hearing on foreign influence operations and their use of social media on Capitol Hill. VOA

Those analytics services can also present a significant privacy risk when used in private messages.

Also Read: Facebook Tackles Fake News, Deletes Almost 800 Accounts

Both Facebook and Twitter have faced lawsuits for collecting data on links shared in private messages, although no wrong-doing was conclusively established in either case. (IANS)