While the U.S. economy shrank at an annualized rate of 32.9 percent during the second quarter, the downturn didn't seem to affect Facebook at all.
The social media company, which posted its quarterly report on Thursday, crushed analysts' expectations with reported earnings of $1.80 and revenue of $18.7 billion for Q2 of 2020. It also reported 1.79 billion daily active users (DAUs) and average revenue per user (ARPU) of $7.05 for the quarter.
Overall, Facebook's revenue grew 11 percent despite some public anger over the company's decision to maintain a more hands-off approach to moderating violent or racist content. In response, many notable brands, including Unilever, Verizon, and Ford, decided to participate in the #StopHateForProfit campaign, which called on marketers to pause Facebook advertising in protest during the month of July.
Facebook said it is on the same page as many of its users and advertisers in that it doesn't want this content on its platforms, nor does it see it as profitable material.
"Yet some seem to wrongly assume that most of the content on our services is about politics, news, misinformation, or hate," CEO Mark Zuckerberg said on a call with analysts. "Let me be clear: it's not. These make up a small part of the content on our services, although they are all things that people generally tell us they'd like to see even less of. We do not profit from misinformation or hate, and we do not want this content on our platforms."
While the campaign has gained a lot of press attention, it doesn't seem to be affecting Facebook's bottom line. The company said in an earnings release it observed 10 percent year-over-year revenue growth through the first three weeks of the month despite the ad boycott, ahead of analyst estimates for 7.9 percent growth. It believes it can sustain that level throughout the year despite economic uncertainty.
Media buyers that spoke to Cheddar said that while some companies were participating in the July boycotts, they were still planning on rejoining the platform in August or later in the year. Also of note, some were just pausing advertising on Facebook and not other apps in the company's portfolio, which includes Instagram and WhatsApp.
During the last quarter, Facebook benefitted from people sheltering-in-place. It's platforms allowed friends and families to communicate with each other and helped small businesses connect with consumers. The company did note usage levels may decline slightly or remain flat in Q3 as pandemic rules ease.
"Sheltering in place is incredibly disruptive now, but until recently it would have meant almost no connection with your friends and the broader economy," Zuckerberg said. "Most of the small businesses whose storefronts had to close would have gone under, and there wouldn't have been another infrastructure like the internet that they could move quickly to in order to stay afloat."
However, there may be some rough waters ahead for the company. Zuckerberg virtually testified in a House antitrust hearing on Wednesday and was confronted with concerns about Facebook's practice of buying up competitors and issues with potential bias in moderating content. Facebook has argued it is aiding in American technological innovation and job growth, and it faces many competitive threats in the social media space as well as online.
"I'm proud of the services we build and how they improve people's lives," Zuckerberg said.
Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process. iRobot said that it is being acquired by Picea through a court-supervised process. Picea is the company's primary contract manufacturer. The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
Wealthfront’s CFO Alan Iberman talks the $2.05B IPO and the major moment for robo banking as the company bets on AI, automation, and “self-driving money."
A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
The New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
