Facebook ended a tumultuous 2020 with rising earnings in the last quarter, but the company predicted challenges in 2021, which include a privacy update by Apple that could limit the ability to target ads on the social network.
The Apple movement has attracted a rare public rebuke from Facebook CEO Mark Zuckerberg, who during a conference call accused Apple of favoring its own interests and not those of its users.
Facebook said its already huge user base grew in the fourth quarter as people stayed home during the pandemic and reported revenue boosted by the shift to digital advertising amid economic uncertainty over the coronavirus.
But the company predicted uncertainties for 2021 and said its revenue for the second half of the year could face significant pressure. Because revenues grew so rapidly in the second half of 2020, the social network may have difficulty maintaining this pace.
“Clearly, the pandemic has continued to help the monthly growth of active Facebook users remain strong in many regions, including the US and Canada, where before the pandemic, user earnings slowed to a crawl,” the analyst said. eMarketer Debra Aho Williamson. However, she noted that the number of daily users in the region has decreased, suggesting that people in the US and Canada are moving elsewhere – probably TikTok, which has grown rapidly in 2020.
In a conference with analysts, Zuckerberg came out on top, saying that Apple is fast becoming one of Facebook’s “biggest competitors,” due in part to its dominance in iPhone messaging. Apple, he said, “has every incentive” to use its own mobile platform to interfere with the way rival applications work.
Apple will soon ask apps to ask users for permission to collect data about the devices they use and to allow ads to track them on the internet. Facebook has pushed back against the changes, saying these rules could reduce what apps can earn through advertising through Facebook’s audience network.
Of course, the Apple movement also threatens Facebook’s advertising revenue. Zuckerberg, however, focused on what he sees as Apple’s motives.
“Apple might say they’re doing this to help people, but the moves are clearly in their competitive interests,” Zuckerberg said.
Meanwhile, Apple says people should be empowered to have more control over their data. Executives have rejected the arguments of advertisers and companies such as Facebook, which say the anti-tracking function will affect the online advertising industry.
“When invasive tracking is your business model, you tend not to accept transparency and customer choice,” Apple software chief Craig Federighi said in December.
Facebook earned $ 11.22 billion, or $ 3.88 per share, in October-December, well above the $ 3.19 analysts expected, up 53 percent from a year earlier. Revenues rose 22 percent to $ 28.07 billion, higher than analysts forecast of $ 26.36 billion, according to a FactSet survey.
Its monthly user base grew by 12% to 2.8 billion. Facebook ended 2020 with 58,604 employees, a 30% increase over a year earlier.
While Facebook does not describe how much it earns from Instagram, which it owns, eMarketer estimates that the app accounted for 36% of Facebook’s total advertising revenue and nearly half of its US advertising revenue.
The company’s shares in Menlo Park, California, rose $ 1.23 to $ 273.37 in trading after the program. The share price increased by 33% in 2020.