×
You will be redirected back to your article in seconds

Facebook Rakes in Record Profit, but Zuckerberg Cautions Fighting Abuse Will Be Costly

Facebook had reason to celebrate as it released its Q3 2017 earnings Wednesday, but CEO Mark Zuckerberg struck a somber tone as the company faces questions about its role in Russia’s campaign to influence the 2016 presidential elections.

“Our community continues to grow and our business is doing well,” Zuckerberg was quoted saying in the company’s earnings release.  “But none of that matters if our services are used in ways that don’t bring people closer together. We’re serious about preventing abuse on our platforms. We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.”

During its Q3 earnings call, Zuckerberg announced that the company plans to double the number of staffers working on safety and security from 10,000 to 20,000. However, these numbers also include third-party contractors, and not just full-time Facebook employees. The company ended September with 23,165 employees.

Zuckerberg made these remarks as Facebook handily beat analysts’ estimates of its earnings. Facebook generated $10.33 billion in revenue during its third quarter, compared to $7 billion during the same quarter last year. The company’s net income for the quarter was $4.7 billion, compared to $2.4 billion a year ago. This equals diluted earnings of $1.59 per share, up from $0.90 last year.

Analysts had expected $9.88 billion in revenue, and a net profit of $1.29 per share.

Facebook also continued to grow its user base, attracting some 1.37 billion daily active users on average in September, compared to 1.18 billion a year ago. Monthly active users reached 2.07 billion by the end of September. The company said that it now generates 88 percent of its advertising revenue from mobile ads, compared to 84 percent during the same quarter last year.

Facebook still makes the vast majority of its money with advertising — more than 98 percent of the Q3 revenue came from ads, to be precise. However, the “payments and other fees segment” had its first sequential growth in the last 6 quarters. This could be an indicator that the company’s Oculus VR headset is finally seeing some growing sales.

Coincidentally, Facebook CFO David Wehner called out virtual and augmented reality as one of three factors driving up costs in 2018. The other two major investment areas would be safety and video content. “We are investing aggressively in video content to seed our watch tab,” he said. Altogether, investments are expected to grow by 45-60 percent year-over-year next year, Wehner said. “It is shaking up to be a significant investment year.”

Facebook’s earnings release happened to come during a week of intense hearings on Capitol Hill on the role big tech companies played in Russia’s attempts to undermine the 2016 election. During these hearings, Facebook admitted that messages posted by accounts controlled by Russian operators had reached some 126 million Facebook users.

During Wednesday’s earnings call, Zuckerberg gave a cautionary endorsement of legislative attempts to regulate political advertising online. “I think this would be very good if done well,” he said.

More Digital

  • Simran Sethi Quits Netflix India Role

    Simran Sethi Quits Netflix India Role

    Simran Sethi, the Los Angeles-based director of Netflix international originals, responsible for India content, has resigned and will quit after a transition period. Netflix did not comment. Sources familiar with the matter told Variety that Netflix prefers an executive based in India to oversee local original content that has now grown to 11 series and [...]

  • The Secret Life of Pets 2

    ‘The Secret Life of Pets 2’ Tops Studios’ TV Ad Spending

    In this week’s edition of the Variety Movie Commercial Tracker, powered by TV ad measurement and attribution company iSpot.tv, Universal Pictures claims the top spot in spending with “The Secret Life of Pets 2.” Ads placed for the animated film had an estimated media value of $11.52 million through Sunday for 869 national ad airings [...]

  • Cory-Haik-Vice

    Vice Media Hires Cory Haik, Former Mic Publisher, as Chief Digital Officer (EXCLUSIVE)

    Vice Media has recruited Cory Haik, former publisher of digital news start-up Mic, as chief digital officer to lead the youth-culture company’s global internet businesses. Haik will be based at Vice’s Brooklyn headquarters and report to CEO Nancy Dubuc. She most recently worked at Mic, which last fall laid off virtually its entire staff before [...]

  • Snapchat logos

    Porn Studio Starts Building X-Rated Snapchat Lenses, Encourages Users to Do the Same

    Adult entertainment company Naughty America wants to use augmented reality to get the word out about its paid services. The company has begun to make Snapchat lenses featuring some of its models, and is teaching its audience to do the same. Naughty America shared three such lenses on its website (link not safe for work) [...]

  • New, Likely Cheaper Galaxy Home Speaker

    Samsung Is Getting Ready to Introduce Second Smart Speaker

    Samsung still isn’t selling its Galaxy Home smart speaker, but the company may be getting ready to introduce a second model soon: An FCC filing for an “AI speaker” suggests that the new model, like the original Galaxy Home, will be dual-branded, featuring both Samsung’s own brand name as well as that of its audio [...]

  • Streaming Placeholder

    TikTok Owner Preparing Streaming Service to Rival Spotify (Report)

    ByteDance, the Beijing-based owner of the TikTok video app, is developing a paid streaming music service aimed at the same emerging markets that Spotify and Apple are seeking to explore, according to a report in Bloomberg. The app could be introduced as early as autumn, according to the report, which adds that the company has [...]

More From Our Brands

Access exclusive content