Tuesday, 20 November, 2018

Record low user growth at Facebook

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Nellie Chapman | 01 November, 2018, 05:55

Zuckerberg and others had vowed that Facebook would change to deal with those problems.

Spending on security and election-related defenses were part of the reason overall costs and expenses reported in the quarter rose 53 per cent to US$7.95 billion from US$5.2 billion a year earlier.

So far, the formats are less lucrative than advertising on the main social network's news feed.

Facebook announced the results as it strives to fend off concerns about how well it protects the data of users and defends against use of the site to spread misinformation aimed at swaying elections.

Facebook FB CEO Mark Zuckerberg saved around $128 million thanks to fortunately timed sales of his own company's stock. Its monthly active users reached 2.27 billion.

The results, in tandem with the guidance from the company, were largely well received by investors, many of whom feared even worse after the company's earnings report in July resulted in a historic collapse of the stock price. Facebook has also nearly fully saturated some of its most important markets, including the United States and Europe. Daily active users in Facebook's most valuable markets remained effectively flat. "Stories monetizing at an estimated approximate 30 percent lower rate than News Feed, messaging/video monetization still de minimis and Instagram Explore still without any ads", wrote Morgan Stanley.

In what could wind up costing Facebook more money, British finance minister Philip Hammond said he planned to introduce a digital services tax aimed at tech giants from 2020, responding to public outrage over low tax payments by USA tech giants.

Mr Zuckerberg said that Facebook's problem is that users are gravitating toward features such as direct messaging and video viewing faster than it can find ways to place ads there while attracting clicks and not annoying users.

While messaging apps may be just one part of Facebook's business, it is a very important part. People are now sharing more than 1 billion "Stories" on Facebook every day, the company said.

Adding to the challenge is that the bulk of new users are from countries including India, Indonesia and Philippines where advertisers focus more on TV, print and outdoor advertising, Facebook executives said.

Last week, Facebook said it had taken down accounts linked to an Iranian effort to influence USA and British politics with messages about charged topics such as immigration and race relations.

Facebook estimates over 2.6 billion people use Facebook, WhatsApp, Instagram or Messenger each month, and at least one of the included platforms on a daily basis.