Facebook is losing users in Europe and expanding its advertising business

on 31.10.2018 at 07:39 clock

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Mark Zuckerberg goes on the offensive and announces a change in the advertising business of Facebook. The boom times are over for now.

Menlo Park.
For years, Facebook rode on the wave of success. But the recent data scandal and the impact of the EU Data Protection Regulation
 have added to social networks: Facebook is growing at a slower pace than it has been in six years.

In the past quarter, the number of monthly active members in Europe fell from 376 million to 375 million. Already in the previous quarter, Facebook had lost one million users in Europe.

Worldwide, the growth of the online network continues. The number of monthly active Facebook users increased within two months from 2.23 billion to 2.27 billion. And advertising revenues also grew significantly: Quarterly sales rose by about a third year-on-year to $ 13.7 billion. The profit climbed by nine percent to just under $ 1.34 billion.

Zuckerberg prepares for slowed growth

But a closer look at the Facebook figures shows that the growth comes mainly from regions that are less lucrative for the online network so far. In the US and Canada, Facebook now has 242 million monthly active users – a million more than three months ago.

However, it is by far the most lucrative market for the online network, where Facebook made $ 27.61 per user revenue last quarter. In Europe it is $ 8.82 per user and $ 6.09 on average worldwide.

Facebook founder and boss Mark Zuckerberg prepared investors in a telephone conference for slowed growth in the future. One problem: The more than 50 percent increase in spending this year. Among other things, this is necessary for the security and the fight against hatred and hate, said Zuckerberg.

Among other things, Facebook hired more employees for its extinguishing centers, which remove prohibited content. The number of employees rose within a year by 45 percent to just over 33,600. However, he loses the balance of costs and revenue out of sight, assured Zuckerberg before analysts.

Facebook "stories" are being used more and more

At the same time, Facebook's advertising business is facing a change that will slow down the money machine of the online network, which has been running at full speed for years. The use goes more from the previous newsfeed with plenty of space for ads to the "Stories" format, in which members publish content such as photos for a day for their friends, as Zuckerberg explained. And here Facebook did not progress so well with advertising so far and has to touch through, among other things, the advertising prices.

Zuckerberg predicted, "In the not-too-distant future, people will share more in stories than in feeds." That's why the business needs to be rebuilt. "This is a journey that will take years and not quarters," said CFO Dave Wehner.

Zuckerberg also addressed another problem. He acknowledged that Facebook lied behind video behind Google's platform YouTube. However, the online network has so far deliberately reduced the amount of time users can spend watching videos. Facebook is in a dilemma: "People want to watch videos," Zuckerberg said. At the same time they expected from Facebook but also social contacts with friends and family. That's why Facebook slowed down the spread of so-called "viral" entertainment videos.

The news to the investors was a change of emotions. First, they were relieved about the solid figures of the past quarter and let the stock rise at times by around two percent. After Zuckerberg's warnings, the price went into the red and fell at times by almost four percent. While the Facebook boss promised that the online network would master the challenges, the stock returned to plus. (Dpa / rtr / Jha)



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