Facebook still holds a dominant position in mobile advertising, alongside Alphabet Inc.’s Google. That has let the company increase the price of ads -- Facebook said mobile made up 91 percent of ad revenue in the recent period, compared with about 85 percent a year earlier. The company also has plenty of properties where it’s starting to make more money beyond the main social network, like Instagram, which is expected to reach a billion users this year, and popular chat apps WhatsApp and Messenger.
Still, the company has been rocked internally by the data crisis, which has caused Facebook to launch a review of all of its products and evaluate how much information it should share with app developers, researchers and advertisers. Meanwhile, it’s working to address new privacy rules in Europe, called the General Data Protection Regulation, which Facebook has said could reduce the amount of monthly and daily users from that region.
Facebook made the argument that because GDPR in Europe affects the entire ad industry, it’s difficult to forecast the repercussions -- including on users outside Europe, where Facebook says it’s going to roll out the same protections.
“While we don’t expect these changes will significantly impact advertising revenue, there’s certainly potential for some impact,” Chief Financial Officer David Wehner said.
The company may no longer be able to build products quickly and roll them out without concern for their potential negative impact. Zuckerberg has said that the company failed to take a broad enough view of its responsibility to users. Facebook will be staffing up this year to review potentially damaging content more quickly and better understand possible security threats. And it’s put a hold on introducing some products, including a home speaker device, while it does a deeper security review.
Facebook in January announced that it was tweaking its news feed algorithm to put an emphasis on posts from friends and family, at the expense of viral news and video. That could reduce the amount of time people spend on the site, the company has said.
Wehner declined to give updated numbers for that measure, saying they were no longer as important.
“We’re not really optimizing the business on time spent, but rather the kind of quality of conversations and connections,” he said.
This article was provided by Bloomberg News.