Apr 29, 2021
Facebook, the world’s largest and most prominent social network, has recently announced its earnings for the 1st quarter of 2021. Earnings reports from public companies for the confusing first quarter of the year were much anticipated by traders.
Despite another successful quarter, Facebook remains a controversial company whose reputation amongst users and competitors has darkened over the years.
Tracking and Advertising
Facebook mainly earns money through advertising, which appears in users’ news feeds. Last quarter, Facebook had over 12% more ads than usual, and the average ad price rose by 30%. “Because of the strong demand for advertising, you see an ability for companies to raise prices,” said D.A. Davidson analyst Tom Forte.
Recently, the online network complained about Apple tightening their privacy protection measures on the iPhone. Apps now have to obtain express permission from users if they want to track their behaviour across different services and websites for advertising purposes. Tracking has been an important way for Facebook to collect information that it would eventually use to personalize advertising.
Wehner repeated the accusation that Apple favoured its own products and services on its devices. The iPhone company rejected this, just as it has in the past.
Zuckerberg also affirmed the goal of expanding Facebook into an e-commerce platform – although this might not happen for another few years.
A Virtual Reality
At the same time, Facebook is finally seeing progress on their virtual reality project, following years of investment and innovation. Users will be able to immerse themselves in digital worlds designed by Facebook via special glasses. Revenue other than from advertising rose to $732 million from $297 million a year earlier, which is largely due to increased sales of the Quest 2 VR glasses.
Facebook’s founder and boss, Mark Zuckerberg, also shows interest in so-called augmented reality (AR), in which digital objects are displayed in the real environment for the user. According to reports from the media and analysts, Apple is also working on AR and VR glasses.
In a conference call with analysts, Zuckerberg was convinced that VR and AR is the next thing that the platform will feature. At the moment, you can only access Facebook through a web browser or smartphone app. In the future, however, you will actually be able to feel what it’s like being within the social network.
Facebook continues to grow despite other social networks popping up on a regular. In the past quarter, sales of the world’s largest online network rose by 48% and came to just under $26.2 billion. Profits jumped from $4.9 billion to $9.5 billion. The number of users who visit Facebook at least once a month rose by a good 50 million to 2.85 billion within three months. Almost 1.9 billion use the platform every
day, as Facebook announced after the US market closed on Wednesday.
“We had a strong quarter as we helped people stay connected and businesses grow,” said Mark Zuckerberg, Facebook founder and CEO. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”
Apps that are part of the Facebook group, such as Instagram or WhatsApp, are accessed by 2.72 billion users every day, a whopping 120 million more than last quarter. On a monthly basis, the app is used by at least 3.45 billion users.