Facebook steamrolled over the Cambridge Analytica scandal, posting another record quarter

Facebook steamrolled over the Cambridge Analytica scandal, posting another record quarter

Facebook steamrolled over the Cambridge Analytica scandal, posting another record quarter

Some high-profile tech luminaries such as Elon Musk and Steve Wozniak have disavowed Facebook, and a "DeleteFacebook" online campaign - even if it didn't lead to mass defections - has bruised the company's already-battered image.

In January, Mr. Zuckerberg said the number of hours users spent on Facebook had fallen by almost 50 million hours a day in the final quarter of a year ago because of changes to the platform's news feed to shift users away from passive consumption of content and toward more meaningful interactions.

However, company executives were keen to emphasize that there was little evidence that either advertisers or users had abandoned the platform in large numbers since the Cambridge Analytica controversy broke in mid-March. It now has 2.2 billion monthly active users and 1.45 billion daily active users.

Daniel Ives, an analyst with GBH Insights, said in an investor note Wednesday that the user figures were "a relief given fears of missing this number were running rampant".

Wall Street reacted favorably to Facebook's sales increase and its growing user base, with the company's shares rising 7% in after-hours trading on Wednesday to $170.75. That's prompted questions about how the social network handles data about its 2.2 billion users, and whether the company can be trusted to protect that information.

Facebook's revenue for the quarter was up 49 per cent to US$11.97 billion compared to the corresponding period in 2017, on the back of a massive 50 per cent rise in advertising revenue to US$11.8 billion. The company also said it boosted its stock-buyback program by $9 billion. It had initially authorized repurchases up to $6 billion.

The Australian Competition and Consumer Commission is now scrutinising the role of digital platforms in diverting advertising away from traditional media companies, as well as how much users know about the data being collected about them.

Political-consulting firm Cambridge Analytica obtained information on as many as 87 million users in 2014 and then lied about deleting the data, Facebook has said. The data debacle came to light late in the quarter, meaning the impact may be felt more in the quarters to come. Sheryl Sandberg, Facebook's COO, said some advertisers had taken a "pause" with Facebook amid the scandal.

Kogan developed a survey application and partnered with Facebook for users to voluntarily participate in. There has not been a meaningful trend since, Sandberg added.

In contrast, Europe's General Data Protection Regulations, set to take effect May 25, will have an impact on Facebook's operations. "I think we're all saying the same thing and we're all concerned - something doesn't smell right here", said committee chair Bob Zimmer, a Conservative MP.

The conference call offered analysts the first chance to grill Zuckerberg and his top execs.

"Clearly there's an expense hit", the analyst told CNBC before the start of Facebook CEO Mark Zuckerberg's testimony before Congress.

Stoked by fears that the data may have been used to try and influence elections in the United States and Europe and the discovery that Facebook collects a lot more data than the average person realises (including web browsing history and, in some cases, text messages), some users have started a #DeleteFacebook movement, including the co-founder of the Facebook-owned WhatsApp.

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