Facebook results soar ahead of an uncertain 2021; Zuckerberg takes aim at Apple

Facebook capped a tumultuous 2020 with soaring earnings in the final quarter, its user base boosted by people staying home and its revenue buoyed by a shift to digital advertising amid the pandemic.

But the company predicted uncertainty for 2021 and said its revenue in the latter half of the year could face significant pressure. Because revenue grew so quickly in the second half of 2020, the social network could have trouble keeping up that pace.

Facebook CEO Mark Zuckerberg came out swinging against Apple, saying the company “has every incentive” to use its own mobile platform to interfere with how rival apps work.Credit:Bloomberg

It’s also facing challenges in how it targets advertisements, including Apple’s coming launch of privacy protections that could limit Facebook’s ability to target ads.

“Clearly the pandemic has also continued to help Facebook’s monthly active user growth to remain strong in many regions, including in the US and Canada, where prior to the pandemic, user gains had slowed to a crawl,” said eMarketer analyst Debra Aho Williamson. But she noted that the number of daily users in this region declined, suggesting that people in the US and Canada are moving elsewhere — probably TikTok, which grew quickly in 2020.

In a conference call with analysts, Facebook CEO Mark Zuckerberg came out swinging against Apple, which he said is fast becoming one of Facebook’s “biggest competitors” due in part to its dominance in messaging — at least on the iPhone. Apple, he said, “has every incentive” to use its own mobile platform to interfere with how rival apps work.

Apple will soon require apps to ask users for permission to collect data on what devices they are using and to let ads follow them around on the internet. Facebook has been pushing back against the changes, saying those rules could reduce what apps can earn by advertising through Facebook’s audience network.

Of course, it also threatens its own advertising revenue. Zuckerberg, though, focused on what he sees as Apple’s motives.

“Apple may say that they are doing this to help people, but the moves clearly track their competitive interests,” Zuckerberg said.

Apple, meanwhile, says people should be empowered to have more control of their data. Executives dismissed arguments from advertisers and companies like Facebook who say the anti-tracking feature will hurt the online ad industry.

“When invasive tracking is your business model, you tend not to welcome transparency and customer choice,” Apple’s software chief Craig Federighi said in December.

Facebook earned $US11.22 billion ($14.6 billion), or $US3.88 per share, in the October-December period, well above the $US3.19 that analysts expected and up 53 per cent from a year earlier. Revenue grew 22 per cent to $US28.07 billion, higher than the $US26.36 billion analysts were predicting, according to a poll by FactSet.

Its monthly user base grew 12 per cent to 2.8 billion. Facebook ended 2020 with 58,604 employees, a 30 per cent increase from a year earlier.

While Facebook does not break out how much it makes from Instagram, which it owns, eMarketer estimates that the app accounted for 36 per cent of Facebook’s total advertising revenue and nearly half of its US ad revenue.

Shares of the California-based company climbed $US1.23 to $US273.37 in after-hours trading. The stock price rose 33 per cent in 2020.


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