Facebook's Q3 earnings exceed expectations, but Russian Federation issues may harm future profit

Facebook earnings
Facebook earnings
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03 November, 2017

Facebook, Google and Twitter representatives have been testifying before Congress this week as lawmakers try to discover how each company allowed stealth Russian posts and whether there needs to be more regulation of tech companies.

Facebook CEO Mark Zuckerberg was similarly optimistic about video: "Over the next three years, the biggest trend in our products will be the growth of video".

"But none of that matters if our services are used in ways that don't bring people closer together".

"I've directed our teams to invest so much in security - on top of the other investments we're making - that it will significantly impact our profitability going forward", Facebook CEO Mark Zuckerberg told investors during a Wednesday earnings call. "Protecting our community is more important than maximising our profits".

The social network reported a net profit of $4.71bn for the quarter, up 79% year-on-year.

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The largest social media platform also continued to increase its active user base with daily active users (DAUs) at 1.37 billion in September and monthly active users (MAUs) at 2.07 billion as of September 30, 2017, with each figure representing a 16% year-over-year increase. Revenue for the quarter topped $10 billion. Revenues were also higher than expected at 5.96 billion versus 5.81 billion estimate. It's operating margin is now up to 50 percent. However, the social networking site stated that would not deter the company from taking steps to curb abuse on the platform.

Still, as Facebook watchers note, the company's inability to cure its troll problem will ultimately cost it more in profits than any short-term security investment. Quarterly advertisement revenue has more than doubled since 2015, and is rising at more than 40 percent year over year.

Chief executive Mark Zuckerberg used the update to address criticism of Facebook for allowing disinformation and manipulation during the 2016 U.S. presidential election, hours after the company's top lawyer faced a grilling at a Washington congressional hearing. "And I wanted our investors to hear that directly from me".

"I am dead serious about this", Zuckerberg added in the conference call. Intense words, although perhaps what you would get out of a CEO on a day when more than one lawmaker threatened to more greatly regulate Facebook if it couldn't police itself well enough to prevent intervening in USA elections.


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