Despite privacy scams & data reaping charges, advertisers stick to Facebook

Observers around the world made a particular note that privacy scandals on Facebook, the risk of manipulation on the platform, and increasing scrutiny due to its sheer size and influence, will ultimately drag its growth and profits. It didn’t happen this time.

Facebook smashed those concerns out of the park on Wednesday, announcing December quarter earnings that beat market expectations. The social media giant posted a 30 per cent rise in revenue to $16.9 billion, while daily active users (DAUs) were up to 1.52 billion, from 1.4 billion last year. 

Growth was across the board but what was more heartening for investors was an uptick in the US and Canada— mature markets where Facebook is believed to have maxed out its growth. Revenue from the region grew 32 per cent to $8.4 billion, even as DAU count stood almost flat at 186 million. 

Revenue from the Asia-Pacific region, which includes India, also grew 34 per cent to $2.7 billion, as it added 78 million more DAUs. 

These numbers suggest that Facebook not only maintained a robust advertising business inflow, it was also able to grow user count and juice more out of those users. Facebook said overall average revenue per user (ARPU) was $7.37, up 19 per cent, and DAUs grew 8.7 per cent, year on year.

“Daily active users on Facebook reached 1.52 billion, up 9 per cent compared to 2017, led by growth in India, Indonesia and the Philippines. This number represents approximately 66 per cent of the 2.32 billion monthly active users in Q4. MAUs grew 191 million or 9 per cent compared to last year,” Facebook chief financial officer (CFO) David Wehner said on a post-earnings conference call.

Investors rewarded Facebook as the stock ended 4.3 per cent up on Nasdaq on Wednesday, but concerns still loomed over the future. Facebook’s market capitalisation, to be noted here, is still down from its peak $509 billion in July, when the company’s worth tanked $120 billion in a single day, the steepest in the corporate history, after Facebook had lowered growth guidance.

Facebook has committed to invest more resources in fighting fake news and manipulation of the platform, as it happened in the case of Russian meddling in US elections, and Cambridge Analytica unauthorisedly harvesting user information.

The platform is also working on a plan to integrate back-end tech for WhatsApp, Instagram and Facebook Messenger, to gather richer data on users and target ads better.

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