Facebook Inc. released its first-quarter 2018 financial results on Wednesday, and the Cambridge Analytica scandal doesn’t appear to have made a dent in its revenue or user base.
In an April 25 press release, the company revealed that the number of daily active users on its platform had risen to 1.45 billion at the end of March 2018 – a year-over-year increase of 13 per cent – and that it had pulled in $11.795 billion (all numbers USD) in advertising revenue, a 50 per cent increase over the same period last year.
Continuing a longstanding trend, mobile ad revenue rose by 60 per cent over last year and represented 91 per cent, or $10.7 billion, of Facebook’s total ad revenue for the quarter. Net profit for the quarter was $5 billion.
Facebook founder and CEO Mark Zuckerberg began an April 25 call with investors by addressing the elephant in the room. Though he did not mention Cambridge Analytica by name, he made repeated references to the “important challenges” Facebook was facing.
“It’s clear now we didn’t do enough to prevent [Facebook’s] tools from being used for harm… whether that’s foreign interference in elections, fake news, hate speech, or app developers and data privacy,” he said. “So now, we’re going through every part of our relationship with people and making sure we’re taking a broad enough view of our responsibility, not just to build tools, but to make sure those tools are used for good.”
Official investigations into U.K.-based Cambridge Analytica, a consulting firm which used online quizzes to harvest the personal data of up to 87 million Facebook users for U.S. president Donald Trump’s 2016 campaign, began on March 20, two days after employer-turned-whistleblower Christopher Wylie gave an interview with The Guardian regarding his role in Cambridge Analytica’s operations.
Zuckerberg first addressed the scandal on March 21, starting with a Facebook post, which was followed by an interview with CNN. He also famously appeared in front of U.S. lawmakers two weeks ago.
During the investor call, Zuckerberg only mentioned Cambridge Analytica once, in response to a question regarding the European Union’s General Data Protection Regulation (GDPR), which is scheduled to take effect on May 25. None of the analysts who asked questions during the call mentioned the firm.
Among the changes Zuckerberg promised during the call: investments in safety, security and privacy technology, including data restrictions for developers, artificial intelligence-powered tools designed to detect and remove fake accounts (which, he noted, had already been used on “tens of thousands” of accounts before recent elections in France, Germany, and Alabama; doubling the company’s security and content review team to more than 20,000 by the end of 2018; and “protect[ing] political discourse by making ads more transparent,” and by requiring anyone running political or issue ads, or large pages, to be verified with a government ID.
Our thanks to investment research platform Seeking Alpha for the transcriptions from Facebook’s April 25 Q1 earnings call.
