Tuesday August 14, 2018
Home Lead Story Facebook Prof...

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

0
//
70
Facebook Profit
Facebook Profit escalates declares CEO of Facebook. Pixabay.
Republish
Reprint

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)

Click here for reuse options!
Copyright 2017 NewsGram

Next Story

Report: Google, Facebook Make Ad Firms Suffer On Dominating Digital Dollars

Search engines such as Google will lose some of their appeal for shopping as Amazon and other retail websites gain favour and advertiser dollars over the next few years

0
Google
Ad firms suffer as Google, Facebook dominate digital dollars. Pixabay

The dominance of Google and Facebook of digital advertising has led to the number of independent and smaller ad tech companies falling 21 per cent since 2013 to 185 in the second quarter of 2018, the media reported.

According to a report in The New York Times on Sunday, venture capital money going into ad-tech start-ups is falling sharply.

“Online advertising companies have struggled for several years as Google and Facebook solidified their grip on digital dollars, slowing revenue for the others,” added the report, citing global marketing research firms including LUMA Partners.

While spending for online ads was more than $88 billion last year, over 90 per cent of that went to Google or Facebook.

“Amazon is also making inroads into advertising, with a new advertising arm, raising the possibility that it will become a top competitor,” said the report.

The company generated $2.2 billion in revenue from its advertising business in the second quarter this year.

Facebook
While spending for online ads was more than $88 billion last year, over 90 per cent of that went to Google or Facebook. Pixabay

While Facebook had been predicting its ad revenue to decelerate in 2017, it actually saw a strong growth of 48.8 per cent.

According to a recent Forrester report, brands will invest 55 per cent more in digital marketing by 2023.

“Search engines such as Google will lose some of their appeal for shopping as Amazon and other retail websites gain favour and advertiser dollars over the next few years,” said Forrester.

You May Also Like to Read Scientists’ New Innovation to Fight Cancer- Researchers Unveil the Power of Turmeric in Fighting Cancer

The move signifies a shift in the way consumer shopping habits continue to change as they are headed toward Amazon and retail websites for shopping and toward Google and Bing for answers to questions.

“The shift gives Amazon a reason to strengthen its search features — text and voice — for organic traffic, as well as its search advertising platform,” said the report. (IANS)