Saturday, 22 September, 2018

Facebook loses one million European users to GDPR

A 3D plastic representation of the Facebook logo is seen in this illustration in Zenica Bosnia and Herzegovina A 3D plastic representation of the Facebook logo is seen in this illustration in Zenica Bosnia and Herzegovina
Jodi Jackson | 26 July, 2018, 13:27

The after-hours trading was on lower-than-expected revenue numbers from its second-quarter earnings report. That figure includes some $2.7 billion in cash and real estate, according to Bloomberg's Billionaire index.

Facebook Inc saw the first signs of user disenchantment in the midst of public scandals over privacy and content, with second-quarter revenue and average daily visitors missing analysts' projections.

The plummeting stock price wiped out as much as $150 billion in market capitalization and erased the stock's gains since April when Facebook announced a surprisingly strong 63 percent rise in profit and an increase in users. That same number fell in Europe, where the company has had to comply with a strict new privacy law, known as GDPR, the Washington Post reported.

The magnitude of erosion of $120 billion can be understood if we compare it to other companies in the market: Facebook lost two Tesla in the after hour trade, i.e. within four hours.

The results missed Wall Street expectations.

Facebook suffered a blow in China on Wednesday when regulators there withdrew their approval of a company innovation hub to support local startups, the New York Times reported on Wednesday, citing a person familiar with the matter. Facebook's results prompted selling in other Nasdaq listings, including media and advertising rivals Amazon.com Inc, Netflix Inc and Alphabet Inc.

While Zuckerberg has vowed to address the problems through major changes to its business practices and investments in new resources, analysts that cover the stock have maintained a positive outlook, insisting that it would essentially be business as usual for Facebook's lucrative advertising operations.

After the General Data Protection Regulation went into effect in Europe, Facebook started asking people to check their privacy settings and make sure they wanted to share certain kinds of data.

The company charted a similar trend in terms of its monthly active users (MAUs) registering 2.23 billion users and an increase of 11 per cent year-over-year as of June 30, 2018.

Facebook's daily active users for the quarter were 1.47 billion, shy of the 1.49 billion forecast by StreetAccount and FactSet.

According to the research firm eMarketer, Facebook is expected to hold an 18 per cent share of the US$273.29 billion worldwide digital ad market, behind Google's 31 per cent.

Facebook's revenue grew at its slowest pace in nearly three years.

Instagram has grown to 1 billion monthly users from 600 million in late 2016, while Facebook's two messaging apps, Messenger and WhatsApp have each reported well over 1 billion monthly users.

Shares in Facebook plunged more than 20 percent in after-hours trading after the social network warned that it would be less profitable in the years ahead due to shifts in its ad business.

Zuckerberg said Wednesday that he was hopeful Facebook would be able to limit disinformation and fake accounts, and that the company was able to do so in elections this year in France, Mexico and Germany.

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