Privacy Scandal Does Not Impede Facebook To Post Record Revenues For First Quarter

Facebook posted record revenues for the first quarter of 2018 despite a huge issue and problems in relation to data privacy.

The company beat Wall Street estimates of revenues of $11.41bn posting a 49% increase compared to same period last year with a Q1 revenue of $11.97bn.

“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.”

After revelation of misuse of private data of millions of Facebook users from the United States and elsewhere by political consultancy Cambridge Analytica, there has been severe criticism of the approach of the largest social media company in the world towards privacy in the last few weeks. A #DeleteFacebook movement has bene initiated by Facebook users – including the co-founder of the Facebook-owned WhatsApp, after the users became fearful that their data may have been used wrongfully for influencing elections in the US and Europe.

But the recent figures reported by Facebook shows that its daily active users have risen to 1.45bn which is 48 million over the previous quarter and the monthly active users to 2.2bn which shows that the movement has had little effect on the number of users of the platform. compared to the same quarter in 2017, both the numbers are 13% more.

However, it was in April that the company saw most of its numbers increase following an eight-hour long testimony by Zuckerberg before the U.S. Congress, after the quarter was over.

There have been a number of changes made in the manner in which Facebook collects and shares user data and for its privacy policies by the company in the last few weeks. The company has also announced plans for complying with Europe’s General Data Protection Regulation (GDPR) and a process of verification of political advertisers and page administrators.

There can be a fall in the revenues from Europe for the company primarily because users would be able to take measures to reduce targeted advertising, warned Facebook’s chief financial officer, Dave Wehner.

“While we don’t expect the changes will have a significant impact on ad revenue, any change in our ability for us and advertisers to use data can impact our optimisation potential at the margin,” he said.

Even though the social media has promised to implement GDPR-compliant settings for all users of Facebook, its chief operating officer, Sheryl Sandberg, said that the settings “would not be exactly the same format”. And this is the reason that the company is not apprehensive of fall in revenues from regions outside of Europe, this indicates that the new security rules in the Europe would not create and difference in the manner in which the company makes use of personal data of users. “We are proud of the ad model we’ve built,” she 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.”

(Adapted from TheGuardian.com)

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Categories: Economy & Finance, Strategy, Sustainability, Uncategorized

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