Updated with stock price and comments from conference call:
On a conference call to discuss the numbers, executives cited a difficul climate and foused on the social media giant’s work to help small businesses find customers and stay afloat as many areas of the U.S and rest fo the world reamins shut or slowed COVID-19. CEO Mark Zuckerberg, fresh of an antitrust hearing on Capitol Hill yesterday, said government privacy regulations in particualr “would reduce opportunities for small businesses so much.”
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“That would probably be felt at a macroeconomic level, and is that really what policymakers want in the middle of a pandemic in recession?” Zuckerberg said a the top of the call.
But he and COO Sheryl Sandberg said they are constantly making changes and trying to address issues raised by critics. The boycott was in a response to hate speech and misinformation on the site.
“It’s an interesting situations we find ourselves in. Often with companes they don’t agree with what what the boycotters want, and it’s just the opposite here. We completely agreee,” said Sandberg. on the call. “We don’t want hate on our platorm, Our users don’t want to see it and advertisers don’t want to be associated with it.”
She said the company will continue to work with civill rights organizations and the auditor the company hired to conduct a two year civil rights review of Facebook policies — culminating in a somewhat devastatng critique published last month. It’s also workingt with GARM (Global Alliance for Responsible Media) on brand safety standards and with MRC (Media Rights Council), which works on disclosure policies and ethical criteria for media measurement.
Facebook has diversified it advertising base and its top 100 advertisers only made up 16% of total revenue. It is also seeing its revenue mix shift strongly to direct response advertising, which is targeted and aimed at some kind of measurable result from consumers, versus traditional brand advertising.
“The trend is that advertisers large and small are interested in measurable results. I think that’s what we offer. Brand advertisers I think of as large, but both large and small are increasingly interested in measurable results… It’s much more important than brand in driving our results,” Sandberg said.
Facebook said users hit 2.7 billion as it beat Wall Street estimates on revenue and earnings in the midst of the ongoing COVID-19 pandemic and a highly-public boycott by advertisers.
If you didn’t get enough Mark Zuckerberg, Facebook and tech giants yesterday during hours of Congressional testimony, they’re all back today with a rat-a-tat-tat of back to back quarterly earnings that will hopefully give the best indication yet of the state of the digital ad market.
Total revenue was $18.69 billion on earnings per share of $1.80.
Wall Street was looking for Facebook to report quarterly earnings of $1.39 a share on sales of $17.34 billion — versus $0.91 cents a share on sales of $16.89 billion a year ago,
Total monthly active users — seen rising to 2.63 billion from 2.6 billion in the first quarter — also passed expectations to end up at 2.7 billion.
“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times,” said Mark Zuckerberg, Facebook founder and CEO in a statement. “And we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”
The company will hold a call with analysts at 6 pm ET, hopefully with insights into the current third quarter, including the impact of advertising boycott that generated lots of heat but was dismissed by many on Wall Street – especially when it turned out that Snap and Twitter – which reported quarterly results earlier this month – didn’t seem to have benefitted much from any migration in digital ad dollars.
Still, more than 1,100 entities are said to have pulled ad spending from the platform in July to protest hate speech and misinformation on Facebook. Its stock took a hit initially but recovered. It popped higher in late trading after earnings.
Facebook has been a nonstop magnet for controversy from the negative last installment of Civil Rights review the company commissioned that was released in June to the wave of indignation at its policies on curating content on its platforms. It, along with Apple, Amazon and Goolge parent Alphabet, are the target of a Congressional antitrust probe and some have called for the company to be broken up.
Lawmakers at the hearing Wednesday focused on its acquisitions of Instagram and Whatsap – basically how it buys smaller rivals to maintain its dominance. It recently announced financial incentives to woo creators away from embattled but hugely popular Chinese-owned video sharing app TikTok to a new service called Reels. Kevin Mayer, the former Disney exec who now runs TikTok, let loose a blistering attack on Facebook yesterday.
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