Mark Zuckerberg said Facebook is in a critical year, as it works to tackle issues around privacy, abuse and the spreading of “fake news,” with the company also warning of headwinds in the future.
Despite the increased scrutiny, it is so far, so good for the company. It reported a second quarter profit of $5.1 billion, up 31 per cent year-on-year, on revenue of $13.2 billion, up 42 per cent. The bulk of sales is advertising revenue — $13 billion – and of this mobile advertising contributes 91 per cent ($11.9 billion).
But the company noted its revenue growth rate slowed from Q1 to Q2, and said it will “continue to decelerate in the second half of 2018”. This was attributed to factors including a shift in currency effects, and the promotion of services which do not currently monetise as well.
“We are also giving people who use our services more choices around data privacy, which may have an impact on our revenue growth,” it cautioned.
Sheryl Sandberg, COO of the social networking giant, addressed the challenges it is facing.
“We’ve taken strong steps to address a number of issues including election integrity, fake news, and protecting people’s information. One of the most important things we can do to effect change is to increase transparency because transparency leads to greater accountability,” she said.
“The vast majority of ads on Facebook are run by legitimate organisations — from small businesses looking for new customers, to advocacy groups raising money for their causes. But we’ve seen that bad actors can misuse our products, too, so we’re erring on the side of transparency.”
The daily active user total stood at 1.47 billion, up 11 per cent, led by growth in India, Indonesia and Philippines.
Zuckerberg said the introduction of GDPR in Europe led to a decline in monthly active users – which was down by around 1 million – while at the same time the “vast majority” of people affirmed they want to use context, including the websites they visit, to “make their ads more relevant and improve their overall product experience”.