Shares in Facebook finished up 3.8% after the company's Q3 earnings call.
Facebook CEO Mark Zuckerberg said the social media platform’s future lay in its video, messaging and stories apps. The company still faces significant challenges in monetising these facets of the platform as its core business slows its ascent.
“People want to share in ways that don’t stick around permanently, and I want to make sure that we fully embrace this,” he said.
Facebook disclosed its vision for the future along with its quarterly financial results, which showed slowing growth in revenue and in the numbers of new usershttps://t.co/IktK6YvMS1
— The New York Times (@nytimes) October 31, 2018
Facebook still looking to increase revenue from messaging and stories content
Zuckerberg said that Stories, which allows users to upload short photo or video collections and acts as a kind of second news feed, had shaken off slow early progress and was “now growing quickly”.
The Facebook CEO would not be drawn on when revenue from Stories would match that from news feed advertising, but said it was trending in the right direction.
“I can’t tell you just yet what that time frame is going to look like, but I think we’re well positioned over the long term because we’re leading in Stories and in basically every country,” he said.
He conceded that Watch, the company’s streaming video platform, remained “well behind YouTube” even after its usage has tripled in recent months.
— Hollywood Reporter (@THR) October 30, 2018
Facebook’s once phenomenal user growth has hit a wall
The market was initially down on Facebook after the earnings call, but it finished up on the day’s trading, a far better result than its previous quarterly report which led to US$120 billion being wiped off its value.
The company’s revenue was slightly lower than anticipated, coming in at US$13.73 billion compared to estimates of US$13.78 billion. Its earnings per share where substantially higher than forecast, however, coming in at US$1.76 instead of US$1.47.
A worrying trend for Facebook is slowing growth in active users, a shift largely driven by younger people deserting the app en masse.
It has also run into problems retaining European users and growth in the US is sluggish, with only 1 million monthly active US users coming on board in the last quarter.
It reported 2.27 billion monthly active users after FactSet had estimated this number would be around 2.29 billion.
U.K. and Canada Call on Mark Zuckerberg to Appear in Front of International Committee on Fake News https://t.co/UHLePr9GSX
— Variety (@Variety) October 31, 2018
UK and Canada parliaments want Zuckerberg to testify on fake news and privacy breaches
Meanwhile, Zuckerberg is facing increased pressure from UK and Canadian lawmakers to testify on the issues of data privacy and misinformation campaigns on Facebook. He has previously testified before US Congress but has resisted repeated requests to do the same overseas.
Damian Collins, Chair of Great Britain’s Commons Digital Culture Committee, and Bob Zimmer, Chairman of the Canadian Committee on Access to Information, Privacy and Ethics, wrote a joint letter to Facebook urging Zuckerberg to take their request seriously.
“We understand that it is not possible to make yourself available to all parliaments,” they wrote.
“However, we believe that your users in other countries need a line of accountability to your organisation—directly, via yourself. We would have thought that this responsibility is something that you would want to take up.”
Header image credit: Brian Solis