Tech

Corona drives more users to Facebook

This April, more than three billion users will use Facebook.com, Instagram, Messenger or Whatsapp at least once. In March it was 2.99 billion, 300 million more than a year earlier. The Facebook group even paid attention to the Facebook group every March day (+220 million). This development is strongly driven by the fact that people around the world have to stay at home and use Facebook services for communication.



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Mr. Zuckerberg's portrait

(Image: Facebook)

Accordingly, it is not surprising that Facebook is in the Documents published Wednesday evening To manage investors' expectations: "We expect to lose at least part of this increased exposure if the various (restrictions) are relaxed." Revenue had also grown significantly until the beginning of March, but then the pandemic had an impact: In the last three weeks of the quarter, "we saw a significant reduction in advertising demand, as well as a related drop in advertising prices," wrote Facebook.

In total, advertising revenue increased by a sixth. They account for almost all of the Group's sales In the first three weeks of April, which are not included in the results for the first quarter, advertising revenues were at the same level as in the first three weeks of April 2019. This means that the revenues do not bubble more or less than a year ago.

Institutional investors saw signs of stability. After Facebook shares had increased by a good six percent even before the quarterly figures were announced, they jumped up another 10.5 percent in after-hours trading after the financial data was announced.

Of course, Facebook's costs have also increased significantly. At the end of March, the group had a good quarter more employees than twelve months earlier. And its services are not only used by more people, but also much longer, which leads to higher operating costs.

The volume of messages sent has increased by more than half, Facebook boss Zuckerberg reported in the usual conference call with financial analysts. Voice and video connections in Whatsapp and Messenger would have more than doubled. The manager highlighted Italy, where there are a particularly large number of COVID 19 victims. There, Instagram usage doubled in just one week. The time spent with apps from the Facebook group has increased by more than 70 percent. The total duration of Italian video connections even increased by more than 1,000 percent in March.

Facebook got a $ 5 billion fine last year after violating privacy obligations for years. Facebook had already booked three of the five billion in the first quarter of 2019. Accordingly, the billions of dollars in data protection penalized Facebook's profits at the time. And because the penalty cannot be deducted from tax, the tax rate has more than doubled.

This time there were no billions to pay. Against this backdrop, the 78 percent increase in net income to $ 5.9 billion and the doubling of net income to $ 4.9 billion can be classified. The profitability of business operations (without fines of billions) has decreased.

Just as the Google Group Alphabet is putting the brakes on costs, Facebook is also saving: less self-promotion, events and travel are planned; a smaller number of additional employees will also be hired. That should reduce the total costs in 2020 from the initially announced $ 54 to $ 59 billion to $ 52 to $ 56 billion.

Facebook is also lowering its investments in its own infrastructure. Instead of $ 17 to 19 billion in the current year, it should now be 14 to 16 billion. However, it will not save three billion, it will be postponed to next year. The tax rate should approach 20 percent.


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. (tagsToTranslate) Coronavirus (t) Facebook (t) Finance (t) Italy (t) Mark Zuckerberg (t) Advertising