Facebook posted impressive first-quarter figures in revenue and new users after a stormy start to the year filled with data privacy concerns and numerous campaigns calling for users to boycott the platform. However, as shown in the latest financial report, the Silicon Valley giant is doing fine and even better.
The social network reported a remarkable 63 percent rise in profit and an increase in users. The company also made $11.97bn in revenue in the first three months of the year — that’s 49 percent up from the same period the previous year. Facebook said its monthly active users in the first quarter rose to 2.2 billion, up 13 percent from a year earlier. Mobile advertising revenue was estimated at around 91 percent of advertising revenue for the first quarter of this year, up from approximately 85 percent of advertising revenue in the first quarter of 2017.
“Despite facing important challenges, our community and business are off to a strong start in 2018,” said Mark Zuckerberg, Facebook’s founder and CEO, in a statement.
“We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.”
The ad-selling platform and the CEO, Mark Zuckerberg, had been faced with several scrutinies from regulators, lawmakers and even users for its loose data privacy, and its role in influencing elections in the United States and Europe. The scandal, which involved improperly sharing users information with the political consulting firm Cambridge Analytica, had affected up to 87 million users prompting several calls for government regulation and for users to leave the social network with the trending #DeleteFacebook hashtag.
Many have also called for a change in the company’s business model of selling personalized ads to users but the company’s executives have repeatedly backed the current model to keep the platform free for users.
“We are proud of the ad model we’ve built,” Facebook’s chief operating officer, Sheryl Sandberg, said. “It ensures people see more useful ads, allows businesses to grow, and keeps the service free. Advertising-supported businesses like Facebook equalise access and improve opportunity.”
However, with the new General Data Protection Regulation (GDPR) in Europe that allows European regulators to fine companies for collecting or using personal data without users’ consent, analysts have said these new set of regulations could adversely affect the company’s revenue. The GDPR, which takes effect on May 25, had forced the company to review some of its privacy rules. To cut its losses though, the company confirmed last week that it doesn’t intend to apply the new European laws to users outside of Europe. The California-based company will seek to push further in Africa and other continents with weak data laws.
With an estimated population of 1.2 billion people, Africa remains particularly attractive to the social networking site but the penetration is still low at 13.7 percent with only 170 million users. Since opening its first African office in Johannesburg in 2015, the company has been pushing for wider adoption among small businesses. Africa’s internet users keep growing and the digital advertising market is booming; Facebook’s only challenge on the continent would be Google but not African lawmakers or regulators.