THE BOTTOM LINE
For Zuck’s sake, let’s hope these results help Tencent too
Facebook’s largely positive results will hopefully help to stem the bleeding from the tech sector in recent months
As it turns out, most Facebook users who threatened to abandon the social network after the Cambridge Analytica scandal did not follow through with their promises.
Facebook’s third-quarter results show that daily active users on the platform rose 9% year-on-year in September to 1.49 billion people.
The company said earlier this year the personal information of about 87 million users, mostly in the US, was misused by Cambridge Analytica, a political consultancy that obtained the data from a personality app. That dented the social media’s reputation and prompted threats to ditch its popular platform.
The growth in users as reported on Tuesday helped boost Facebook’s share price despite the company missing revenue expectations. Revenue in the quarter grew 33% to $13.7bn, slightly behind analysts’ projections. Net income, meanwhile, increased 9% to $5.1bn.
For context, Anheuser-Busch InBev, the world’s largest brewer, makes profits of about $2bn a quarter. AB InBev was founded in 1852, while Facebook is just 14 years old.
Facebook founder and CEO Mark Zuckerberg said on Tuesday: “Our community and business continue to grow quickly, and now more than two billion people use at least one of our services every day. We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
For tech investors, Facebook’s largely positive results will hopefully help to stem the bleeding from the sector in recent months. That would be a win for the JSE, too, given its heavy exposure to China’s Tencent via Naspers.