Tag Archives: Took
Facebook’s problems have reached a boiling point. After months of questions and, often reluctant, disclosures about massive information leaks and about how it handles false information on its site seen by hundreds of millions of people, disappointing user growth caused the social network’s stock to plummet in after-hours trading on Wednesday, shedding over $ 145 billion in market cap.
Investors’ alarm was likely triggered by a failure in growth in its most important markets, the combined U.S. and Canada segment and Europe. U.S. and Canadian traffic was flat from the previous quarter, while Europe shed 3 million average daily users quarter over quarter, down to 279 million.
U.S. and Canadian Facebook visitors provided an average revenue per user (ARPU) in the latest quarter of $ 25.91, the vast majority from advertising, while the ARPU of Europeans was $ 8.76, according to figures provided by Facebook. Other markets offer much less value: Asia-Pacific users rack up just $ 2.61 in revenue, and the rest of the world lumped together, a mere $ 1.91.
The drop in European visitors was potentially due to the continuous revelations highlighted there about Facebook’s breaches and weaknesses, and the implementation of the European Union and related entities’ General Data Protection Regulation (GDPR) in late May. The GDPR requires more disclosure and opting in to many tracking and ad-related behaviors that aren’t related to the core function of a website.
While the company saw revenue up 42% year-over-year to $ 13.2 billion in its second quarter, that was short of what Wall Street expected. Net income was similarly up, to $ 5.1 billion from $ 3.9 billion the year-ago quarter, but that didn’t assuage investors and institutions. The after-hours plunge came despite Facebook also beating a consensus estimate of earnings per share of $ 1.72 by two cents.
This slowing growth in valuable markets may have provided the jitters that led investors to significant after-hours profit taking. The company had a nearly unbroken steady climb in its stock price since mid-2014, with a blip shedding 15% in a matter of days in March when revelations about alleged data misuse by Cambridge Analytica emerged. Facebook stock recovered gradually, and was up 29% in the last year and 21% in 2018 through the close of regular trading today, rising to a new high of 217.50, before the after-hours tumble. Nearly the last year’s gains have now been lost.
Facebook has no end in sight for scrutiny and oversight, with regulators, prosecutors, and other public and private parties in multiple countries examining the company’s actions, those of nation states allegedly manipulating news and advertising, and that of firms like Cambridge Analytica, which obtained massive amounts of information that many Facebook users likely considered private.
Yesterday, BuzzFeed published a memo by chief security officer Alex Stamos written to staff in March after the initial Cambridge Analytica stories broke in which he urged the company to pick sides on important issues. Stamos reportedly still plans to leave the company next month, following a reorganization that the New York Times said earlier this year took away 98% of the group he managed. Today, Facebook’s chief legal officer announced he’s departing at the end of this year for family reasons.
An editor for The Verge took a job with Apple — but didn’t tell his employer.
Chris Ziegler, a founding editor at the tech-focused digital media publication, began working for Apple in July 2016. Ziegler did not tell The Verge, where he had been a deputy editor, and continued to be employed by the website, according to Editor-in-Chief Nilay Patel, who posted a note to The Verge on Friday afternoon.
Patel said that the website had become aware of Ziegler’s dual employment and investigated whether he had been involved in any coverage of his new employer. Strangely, Patel said that the website had not heard from Ziegler in August or September. Read more…