Facebook’s third quarter figures confirm that it (and Google) are destroying the future for established media such as newspapers, TV, cable and even newer technologies such as streaming video (and grabbing it for themselves).
Facebook’s results confirm the tech bonanza that we have already seen from Amazon, Intel, Microsoft, Alphabet (Google) and Netflix, with Apple due to report on Friday morning, Sydney time.
But even before the legacy media gets to the future, which is based on mobile, Facebook is already occupying the high ground.
Facebook says 88% of its $US10.1 billion of third quarter revenues was from mobile, up from 84% a year ago.
Third quarter revenues jumped 49% to $US10.1 billion, which was impressive enough, but its net profit before tax (a good measure of its profitability) surged 64% in the quarter to $US5.12 billion.
And that saw the company’s profit margin jump to 50% from 44%. In other words 50 cents in every dollar of revenue is profit, and after taxes and charges the net margin was 47%!
Facebook’s average daily users rose 16% to 1.37 billion and average monthly users hit 2.07 billion, up 16% as well.
In the release Facebook warned that investment in security on the platform will impact its profitability in coming quarters.
Mark Zuckerberg, Facebook’s founder and CEO, said the goal of “protecting our community is more important than maximising profits”. Earlier overnight Wednesday, Facebook’s general counsel Colin Stretch said the company would double staff working on safety and security to 20,000 in 2018. Facebook and other companies faced a grilling from a US Senate committee on the growing problem of Russian involvement in last year’s US election campaign.
Facebook now says that the output from one Russian troll organisation producing fake news and ads was now 150 million, up from an early figure of 126 million. The 150 million is more than 10% of the 1.307 billion daily users Facebook revealed in its third quarter report.
Repairing the damage to its reputation is going to cost a lot of money.
Facebook shares hit a record price of $US182.66 at the close and rose more than 2% in after hours trading before easing to be ip 1%. The company was valued at $US530 billion at the close. That’s up 57% for the year so far.
