Facebook's stock dips after Zuck warns Russian crackdown will hurt profits

Nov 03, 2017, 00:13
Facebook's stock dips after Zuck warns Russian crackdown will hurt profits

"I believe this will make our society stronger, and in doing so will be good for all of us over the long term", Zuckerberg said on the call.

Security is clearly a major and costly issue for Facebook.

Facebook's top lawyer, Colin Stretch, told U.S. lawmakers this week that the company planned to add roughly 10,000 more employees to aid its efforts to eradicate fake news, misinformation, and state-sponsored efforts to sway public opinion. Third-quarter ad revenue rose 49% to $10.1 billion, beating the consensus of $9.71 billion. "Protecting our community is more important than maximizing our profits", Zuckerberg told journalists after the company reported third-quarter earnings.

"We're serious about preventing abuse on our platforms".

Chief executive Mark Zuckerberg used the update to address criticism of Facebook for allowing disinformation and manipulation during the 2016 United States presidential election, hours after the company's top lawyer faced a grilling at a Washington congressional hearing. We're investing so much in security that it will impact our profitability. EPS (GAAP): $1.59 vs. $1.28 expected, up 77% from the year-ago period.

Investors are looking for Facebook's ability to grow its ad revenue from sources besides the News Feed, which is nearing the limit of ads it can show. The social media giant, along with Google and Twitter all sent general counsel this week to three scheduled meetings before the Senate Judiciary Committee on Russian influence in the 2016 presidential election.

But Facebook's investment in platform security goes far beyond that, as Zuckerberg explained on Wednesday.

Away from the financials, Facebook's daily active users (DAUs) and monthly active users (MAUs) saw a YoY increase of 16 per cent. DAUs were 1.37bn on average for September 2017, while MAUs were 2.07bn as of 30 September.

It's worth noting that more than 98 percent of Facebook's revenue comes from advertising, 88 percent of which is from mobile devices.

The latest data on Instagram is on top of the estimated 126 million Americans exposed to Facebook posts from Russian entities seeking to create divisions during the election campaign. "You've created these platforms, and now they are being misused, and you have to be the ones to do something about it, or we will". During the earnings call, Zuckerberg noted that they are making large-scale efforts in video content, artificial intelligence and virtual reality, among other areas.

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