Facebook on Wednesday reported rising profits and revenue, driven by rising ad sales, but warned that there could be “headwinds” in the future due to regulatory and technology changes.
The social network’s revenue rose to $ 28 billion in the fourth quarter, up 33 percent year over year and beating Wall Street estimates. Profits were $ 11.2 billion, up 53 percent.
Facebook’s business soared despite several controversies. It has been criticized for spreading misinformation on its platform and the impact these falsehoods have on users, while regulators are increasingly concerned about its oversized power.
In December, the Federal Trade Commission and more than 40 states accused Facebook of buying up its rivals in an attempt to illegally suppress competition. This month, Facebook angered Conservatives and others for banning former President Donald J. Trump’s report, citing his incitement to violence.
Even so, the company continued to attract new users. Facebook’s apps – including Instagram, WhatsApp and Messenger – had more than 3.3 billion regular monthly users in the fourth quarter, a new high. Around 2.6 billion of them used one of the Facebook apps every day.
After an initial drop in advertising in March, Facebook’s business boomed as more people bought products online during the pandemic. The company expected this trend to continue.
“Despite negative advertising and antitrust cases, nothing seems to be holding back what is arguably the most important advertising platform in the world,” said Jesse Cohen, senior analyst at Investing.com.
Facebook said one area of uncertainty is potential regulation, particularly in Europe. The company is closely monitoring decisions in Ireland that could prevent it from transferring data about European Union users to the US. Executives also said they were concerned about changes Apple made to its iOS mobile operating system, tracking apps that could hamper some of Facebook’s ad targeting tools.
Facebook also said it would stop recommending political groups to users and that it was working to reduce the amount of political content that appears on users’ newsfeeds. The actions were based on feedback from users who said they didn’t want the battle for politics to be their entire Facebook experience, the company said.
In a statement, Mark Zuckerberg, the CEO of Facebook, was positive.
“We had a strong year-end as people and businesses continued to use our services during these challenging times,” he said. “I’m very excited about our product roadmap for 2021 as we develop new and meaningful ways to create business opportunities, build communities, and help people just have fun.”