Facebook's profit

30 Jan 2020

Facebook’s profit falls down for the first time in 5 years

Advertisements

Facebook, the tech giant that also owns Instagram and WhatsApp, has recorded its lowest profit numbers in 5 years. However, Facebook’s profit fall has a lot more to say about its politics than money. We are considering that the annual profit is the lowest in a certain period of time, but within a year, its advertisements got a revenue rise of 27% last year.  Taking this piece of information into consideration, we understand that what the company is doing continues to increase its profit. But just in part.

Remember that Mark Zuckerberg’s company is facing a difficult time because of its involvement in the improper sharing of user data with Cambridge Analytica. Because of that, there is an ongoing rumor that the company was responsible for helping elect Donald Trump to the US presidency. This is even something that was actually said by one of Facebook’s executives. This is a super delicate situation for Facebook’s investors, who became startled after the announcement of stronger privacy protection and content moderation.

Facebook's profit falls down
For the first time in 5 years, Facebook’s profit falls down. Understand why! (Source: O Globo)

Facebook’s profit annual fall is a byproduct of its policy choices

After being accused of engaging in a political plot, it seems to be suitable for the company to make things more transparent. However, Facebook decided that it would not police political adverts on its site for false content. Thus, what this means is that they will continue to do what they have been accused of doing. According to Zuckerberg, his “goal for this next decade isn’t to be liked but to be understood”. With this statement, he reinforces the position that cost the company large amounts of fines.

Last year, in July, US regulators announced that Facebook will pay a $5bn fine to settle privacy concerns. Besides, last week, the company also said that they will pay a $550m fine to settle an Illinois lawsuit over its use of photos for its facial recognition technology. If their privacy policy has a cost, they seem to pay for it happily. The problem here is: this boldness is not that attractive to investors.

If you want to know how Facebook will deal with its investors and the next electoral period, wonder if the company will answer the following questions. Will they help Donald Trump to win again? Even when he is facing an impeachment process? What will be shared with its 1.7 billion active users? Keep up with our blog posts in order to know the answers to those questions!

Advertisements

Source: BBC

Advertisements