Yesterday Facebook reported its third quarter profit and sales that came in well above analysts’ expectations. It made a tidy little quarterly profit of USD4.7 billion – even challenging the enormous profits of Australia’s banks.
But Facebook’s shares went down. Why? Because the social behemoth said it would probably be increasing costs by 45-60% in 2018. Mark Zuckerberg may have been playing to the Washington audience where his man – along with Twitter and google – was presenting to the House of Representatives Intelligence Committee hearings.
But, he said, while things are going well for the business, “…none of that matters if our services are used in ways that don’t bring people closer together. We’re serious about preventing abuse on our platforms. We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.”
And that was going to need people, not machines (yet). We’ll see if he follows through, once the heat dies down about the role of social media sites in spreading malicious stories allegedly originating in Russia.
But said Mr Zuckerburg, by the end of 2018 the company plans to double – to 20,000 – the number of staff whose roles it will be to eliminate fake news and hate speech from its sites.
When candidate Trump was promising to create new jobs for unemployed coal miners, he probably wouldn’t have expected that the Russians would come to the rescue of 10,000 wannabe fake news destroyers.
But Facebook can probably afford it, with a reported 2.06 billion active users each month. While most parameters have stabilised – to around 3-4% growth rate – for Facebook, there would seem to be plenty of upside for new business in Asia Pacific, where the average user revenue remains below half the global average.