Facebook nearly doubles its profit and revenue rises 48 percent, as tech booms.

Facebook said on Wednesday that revenue rose 48 percent to $26.2 billion in the first three months of the year, while profits nearly doubled to $9.5 billion, underlining how the social network has continued to benefit during the pandemic.

Advertising revenue, which makes up the bulk of Facebook’s income, rose 46 percent to $25.4 billion. Nearly 3.5 billion people now use one of Facebook’s apps every month, up 15 percent from a year earlier.

The results followed a blockbuster financial performance in 2020, as the pandemic pushed people indoors toward their computers and other devices — and onto the social network and its associated apps like Instagram, WhatsApp and Messenger — in ever-increasing numbers. Facebook recorded highs in users and revenues and its services were in such demand that engineers at times struggled to “keep the lights on.”

Yet Wall Street is now expected to scrutinize Facebook’s advertising business closely. On Monday, Apple rolled out an update of its mobile software with a new feature that asks people if they wish to opt out of being tracked by advertisers outside of apps like Facebook. If people choose not to be tracked, that could hurt Facebook’s business, which relies on user data to target advertising.

The situation has put Mark Zuckerberg, Facebook’s chief executive, and Tim Cook, the C.E.O. of Apple, in conflict with one another. On Tuesday, Mr. Cook tweeted that Apple had introduced the privacy feature because “we’ve always believed that you should be in control of your data.”

Facebook on Wednesday said it expected some challenges to its advertising this year “from regulatory and platform changes, notably the recently-launched iOS 14.5 update, which we expect to begin having an impact in the second quarter.” The company added that the change was baked into its financial guidance.

“We had a strong quarter as we helped people stay connected and businesses grow,” Mr. Zuckerberg said in a statement. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce and the creator economy.”

In recent months, Facebook has also faced continued criticism about the content that flows through its site, especially after former President Donald J. Trump used social media to urge his followers to overturn the results of the presidential election, inciting a mob to storm the Capitol building on Jan. 6. Facebook cut off Mr. Trump from the platform after the riot, though a final decision about whether to keep him off the site indefinitely has not been made.

Source: Read Full Article