Thursday, January 28, 2021
Outlook cautious nevertheless
Facebook trumps in the crisis
Facebook is more popular than ever in the Corona crisis. Not only with users, but also with advertisers. In the past quarter, the group increased its profit by more than 50 percent.
Facebook is playing to its strengths in the Corona crisis. With shops closed, even more companies put their advertising online. Sales climbed 33 percent in the fourth quarter to just under $ 28.1 billion, as the world's largest online network announced after the US market closed. This is significantly more than expected by analysts. About 97 percent of Facebook's sales come from the advertising business.
The profit even climbed 53 percent to $ 11.22 billion. The quarterly figures also reflect the success of the new focus on online trading. With offers such as Instagram Shopping or Facebook Marketplace, the US group founded by Mark Zuckerberg in 2004 wants to benefit from the fact that more and more people are shopping online during the crisis. In addition, purchase options within apps have recently been added. "This investment in e-commerce seems to be paying off precisely at the moment when traditional stores seek more online activities," write analysts at Bank of America.
The network, which includes the messenger Whatsapp and the photo platform Instagram in addition to the platform of the same name, now has 2.8 billion active users per month. This means that more than every third resident in the world is registered with the US group. For the current year Zuckerberg announced new products that would create "economic opportunities".
Nevertheless, Facebook spoke of "significant imponderables" in the future. During the pandemic, they benefited from the general boost in online business. However, should this trend reverse, it will also slow the growth of Facebook's advertising revenue. In addition, the online network has already warned that, given the rapid growth in the second half of 2020, there will be foreseeable lower growth in the current year. Another factor of uncertainty is the situation regarding data transmission from the European Union. The European Court of Justice also overturned the new data protection agreement "Privacy Shield" last summer.
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