Published: Fri, November 03, 2017
Finance | By Kristine Clayton

Facebook revenues up 47% while net profit grows by 79%

Facebook revenues up 47% while net profit grows by 79%

The company stated that in the coming quarters the earnings might take a hit due to rising investment in cyber security. The company said consistently today that it is doubling the number of workers committed to policing its platform for things like child porn, terrorism, or state-sponsored electioneering.

"At first glance, no change to our positive thesis after Facebook reported stable ad revenue growth despite previous commentary around diminishing ad load contributions in (the second half of this year), wrote Baird analyst Colin Sebastian in a research note to clients".

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. But none of that matters if our services are utilized in ways that do not bring people closer together. "Protecting our community is more important that maximizing our profits".

"I wanted our investors to hear that directly from me", Zuckerberg said during the earnings call.

An nearly life-and-death struggle with unwanted content, including fake news and hate speech, may seriously hurt Facebooks' profit margins, according to the company's founder and CEO Mark Zuckerberg.

According to The Telegraph, Norm Johnston, global chief digital officer at WPP's Mindshare said, "Facebook is facing an identity crisis over whether it's a publisher or platform".

Zuckerberg said Facebook's recently launched Watch tab is an example of how it is capitalizing on this opportunity. Giving an idea of the increased expenses, Facebook Inc (FB) said it would grow between 45% and 60% in 2018 compared to the previous year. The company also said it will significantly increase spending on security and expects this to drag down profitability going forward.

Facebook reported capital expenditures for the third quarter of $1.76 billion.

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.

A stark juxtaposition: At the same time Facebook's general counsel was getting grilled by members of Congress in Washington, DC, on Wednesday about how the platform was abused by Russian election meddlers, Facebook beat revenue expectations for the third quarter. 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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