Facebook also said on Monday that starting from the financial report of the fourth quarter of 2021, it will take Facebook Reality Laboratory (FRL) as an independent reporting department to emphasize augmented reality and virtual reality products and services. This will separate the performance of the Department from its core business, including Facebook platform and other applications such as instagram. Facebook said its investment in Facebook reality lab is expected to reduce its overall operating profit by about $10 billion in 2021.
Facebook’s third quarter net profit rose 17% year-on-year to $9.19 billion, or $3.22 per share. The company said that the monthly active users of all its products had reached 3.58 billion, an increase of 12% over the same period last year. Facebook shares plunged 5% after snap reported its advertising problems. The company’s shares rose 1.26% in regular trading on Monday and 1.77% in after hours trading after the release of the financial report. Youssef squali, an analyst at truist, said Facebook’s results were “better than expected” given the concerns raised by snap last week.
So far, Wall Street has continued to support Facebook’s stock. According to Monday’s closing price, the company’s shares are down 14% from the record high set in September. According to the data compiled by Bloomberg, among all investment banks that rated Facebook’s stock, 49 gave a “buy” rating, 9 gave a “hold” rating and 3 gave a “sell” rating.
Facebook also said in its financial report that the Company repurchased $14.37 billion of class a common shares in the third quarter. As of September 30, 2021, Facebook’s previous share repurchase authorization remained $7.97 billion. Facebook also announced on Monday that it would add an additional $50 billion stock repurchase project.
The third quarter results of American technology giants will appear one after another this week. Excluding Facebook, the parent company of Microsoft and Google, alphabet, will release the third quarter results after hours on Tuesday; Apple and Amazon will release their third quarter earnings after hours on Thursday. As consumers and enterprises continue to accept the digital products and services provided by technology giants, their performance is expected to achieve healthy growth year-on-year.
Analysts at Jeffrey, an investment bank, said the global supply chain disruption was expected to exacerbate Facebook’s slowing revenue growth as suppliers with limited inventory cut advertising spending. However, the investment bank also said that the strong digital advertising business and the new advertising products provided by Facebook’s instagram service have been launched, providing Facebook with a new source of revenue. Facebook expects the company’s fourth quarter revenue to range from $31.5 billion to $34 billion, reflecting what it calls “the continued headwind caused by Apple’s IOS 14 changes” and other factors.
As the parent company of Facebook app, instagram and WhatsApp, Facebook has also been addressing other challenges, including strict regulatory review in Washington and criticism from the company’s own oversight committee after the Wall Street Journal conducted a series of investigations into the company’s operations called “Facebook archives”.
Last week, the UK antitrust regulator fined Facebook 50.5 million pounds (US $69.6 million), saying it violated reporting requirements when reviewing its proposal to acquire giphy, an online animation provider. As part of its settlement with the U.S. government, Facebook also agreed to pay fines to the former. Previously, the U.S. government accused Facebook of illegally reserving jobs for its sponsored immigrant employees to obtain permanent residence, rather than looking for and considering existing U.S. employees.
Facebook CEO Mark Zuckerberg has recently been promoting his vision of the meta universe. Metauniverse is roughly defined as a vast future online world, where people exist and interact in a shared virtual space through digital avatars. He recently described the metauniverse as the next chapter of the next generation Internet and Facebook. Facebook said last week that it plans to create 10000 jobs in Europe in the next five years and is committed to work related to yuanuniverse.
Shelling negative news
Zuckerberg stood up at the earnings conference call on Monday to defend his research on how services affect users. Zuckerberg said: “Well intentioned criticism helps us become better. But my view is that what we see is a concerted effort to selectively use leaked documents to portray the false image of our company. The reality is that we have an open culture and we encourage discussion and Research on our work, so that we can work on many complex issues that are not just our own Make progress. “Zuckerberg said Facebook did this work” because we care about how to do it well “.
These reports come from a group of 17 news media in the United States, composed of former employee Frances Haugen Provide internal documents. She also provided these documents to the U.S. Congress and the securities and Exchange Commission to seek the identity of whistleblowers. This prompted the U.S. Congress and overseas countries to hold relevant hearings. These reports show that Facebook has realized that its services may have a negative impact on the mental health of some users, push polarized suggestions to users and disseminate potential information Although Facebook has taken steps to make its platform more secure in all these aspects, critics of the company say it has not acted boldly or quickly enough.
One theme of Zuckerberg’s argument is that the problems experienced by Facebook are a reflection of society. “These problems are not mainly about social media,” Zuckerberg said. “This means that no matter what Facebook does, we will never solve them alone.” he said, “before I was born.” He also pointed out that some unspecified studies have found that countries using similar social media have stagnated or decreased polarization.
He said that Facebook often needs to choose between many trade-offs, such as providing encryption or supporting law enforcement investigations. “It sounds reasonable to say that we don’t solve these impossible trade-offs because we just focus on making money, but the reality is that these problems are mainly not about our business, but about balancing different difficult social values.
Zuckerberg said he called for regulation so that companies like Facebook don’t have to choose between these tradeoffs. He said he was proud of Facebook’s research and stressed the company’s investment in safety and security measures. However, he said he was worried that the response to Facebook’s research might have a negative incentive for other companies to engage in similar work. “I’m worried about what we’re creating to inspire other companies to be as introspective as we are. But I’m committed to continuing this work because I believe it will be better for our community and business in the long run,” Zuckerberg said.
Focus on young users
In the conference call, Zuckerberg also announced a new strategic vision for the future of the platform. He said that instead of making Facebook a place that caters to the most people, it is better to pay more attention to young people aged 18-29 now. He said: “We are reorganizing our team to serve young people as their Polaris, rather than optimizing for more elderly people. Like everything, this will involve the trade-off of our products, which may mean that the rest of our community will grow more slowly than in other cases. But it should also mean that our services for young people will become stronger.”
Zuckerberg said that this transformation will take years, rather than months. The changes and other changes mentioned by Zuckerberg, including updating Facebook and Instagram to emphasize videos, and tending to Reels short video products, will make the platform more similar to overseas version of Tiktok and pursue an important part of its user group. Zuckerberg pointed out that Tiktok is its tiktok. One of the most powerful competitors I’ve ever seen.
Facebook often mentions the rapid growth of tiktok, which is the subject of antitrust lawsuits filed by the U.S. Federal Trade Commission when facing problems about its huge strength. The Federal Trade Commission accused Facebook of illegally monopolizing the field of personal social networks, in part through the purchase of instagram and WhatsApp.
Several reports in the leaked documents show that Facebook is increasingly worried about the lack of participation of young users in its main platform, which will pose a threat to its future survival. Nevertheless, focusing on young people, rather than teenagers under the age of 18, may reduce the pressure on legislators and others, who warned Facebook not to produce versions of its products for children (compiled by Tencent technology / Wuji)