Now headwind threatens: Facebook doubles profit

Now headwind threatens
Facebook doubles profit

Advertisers are queuing up on Facebook, profits doubled in the last quarter. But it shouldn’t go on as rosy as this, warns the company. Rather, growth will “weaken significantly”.

In the past quarter, Facebook profited massively from the fact that more and more advertising spending went online. Sales of the world’s largest online network jumped 56 percent year-on-year to a good 29 billion dollars (24.5 billion euros). At $ 10.4 billion, profits were double what they were a year ago.

Facebook 373.28

The main reason for this growth was an increase in the average price per ad by 47 percent, as Facebook announced after the US market closed on Wednesday. Meanwhile, the number of advertisements displayed rose by only six percent. The ad spaces on Facebook are allocated in an auction process. In the corona pandemic, more and more advertisers are trying to reach people online – the competition for space on the Facebook platform is correspondingly fiercer.

The number of daily active users on Facebook rose within three months by around 30 million to 1.91 billion. 2.9 billion users access the platform every month – 50 million more than in the first quarter. At least one of the Group’s apps, such as WhatsApp or Instagram, is used by 2.76 billion people – that’s 40 million more than three months ago.

iPhone users more difficult to reach

Advertising revenues soared, although Apple activated its data protection innovations in the middle of the last quarter, which Facebook has sharply criticized. App developers must now obtain explicit permission if they want to observe the behavior of an iPhone user across different Tuesdays and applications for advertising purposes. With many rejecting this, Facebook warns that the online network’s ability to display advertising to specific user groups will suffer as a result. In the current quarter, the effect of the Apple measures will be felt more strongly than in the past quarter, emphasizes Facebook’s chief financial officer David Wehner.

The percentage growth will also be lower in the further course of the year because, in contrast to the previous quarter, the fresh figures will be compared with business figures from 2020 that were already spurred by the Corona crisis, he warned. The Facebook share fell in after-hours trading at times by 3.80 percent, although the quarterly results significantly exceeded the expectations of the analysts.

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