No impact on Facebook from privacy scandal, profits up in first quarter

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Thomson Reuters

Facebook says its user base and and revenue increased significantly in the first three months of 2018, despite the setback caused by the Cambridge Analytica data breach scandal.

"Despite negative headlines about Facebook's unmatched reach, Cambridge Analytica's allegedly improper use of Facebook data on up to 90 million users, the calls to "#deleteFacebook" and two days of Congressional hearings for CEO Mark Zuckerberg, the company emerged with almost $5 billion in net income for the quarter, up 62.8 percent from a year earlier. This was 50 per cent up on the $7.85 billion reported in Q1, 2017, but was a drop of $984 million on Q4, 2017.

The scandal, affecting up to 87 million users, sparked calls for regulation and for users to leave the social network, but there was no indication advertisers immediately changed their spending, Reuters noted.

Mobile represented approximately 91 per cent of Facebook's overall revenue for the first quarter of 2018 - up from approximately 85 per cent in the first quarter of 2017. Asia-Pacific as a region generated just over $2 billion of these revenues, against Facebook's largest market, the U.S. and Canada ($5.67 billion).

Facebook said it ended the first quarter with 27,742 employees, up 48 percent from a year earlier.

And despite a buzzy "DeleteFacebook" online campaign, both daily and monthly user numbers increased. However again, this was a fall on Q4 figures ($6.08).

"Advertisers ask the same questions people ask. they want to make sure they and their customers' data is protected and I think we are able to answer those questions in a compelling way".

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"Despite facing important challenges, our community and business are off to a strong start in 2018", Mark Zuckerberg, Facebook's founder and CEO, said in a statement. "Over the next three years we're going to keep building Facebook to not only be a service that people love to use, but also one that's good for people and good for society".

In March, towards the end of Facebook's reporting period, the company was caught up in a massive privacy scandal involving the political consultancy Cambridge Analytica.

The results are some much-needed good news for the California company, which has been in damage control mode for weeks, fighting to contain the fallout from the Cambridge Analytica scandal and reassure users. Mark Zuckerberg was all but frog-marched onto Capitol Hill to defend his company's data-gathering practices, Apple's Tim Cook appeared in Washington for a decidedly different goal: a scheduled meeting with Donald Trump.

Facebook's expenses will continue to grow as it invests in security and other efforts.

Early this month, Zuckerberg fended off questions from United States senators about how the organisation could be regulated more closely. "Facebook makes a lot of advertising money off this".

Digital platforms are now rolling out changes under the European General Data Protection Regulation (GDPR), which allows users to have more control over their data and imposes larger penalties for companies that breach the rules.

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