Facebook share price: 3 things we learnt from Q1 results
The social media app's earnings report taught investors and Wall Street three important facts.
Facebook’s Q1 results were affected by the Cambridge Analytica scandal
Facebook’s Q1 earnings were impacted by the Cambridge Analytica data mining scandal. The social media company put aside $3 billion from its profits to pay fines from the US Federal Trade Commission(FTC). The corporation addressed the fines in a statement.
‘In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices,’ noted Facebook.
Security is still an issue after Facebook’s Q1 earnings
Facebook’s Q1 earnings report also shows that security of user data is still vital to the corporation. After a series of data breaches, Zuckerberg wrote in a post on Facebook that he wanted to ensure that user data will be better protected in the future.
‘I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won't stick around forever. This is the future I hope we will help bring about,’ wrote Zuckerberg.
Zuckerberg also noted that he wanted to build more privacy measures around the corporation’s Facebook Marketplace payment feature.
Facebook's Q1 revenue grew from an increase in users and advertisers
Despite the data breaches, Facebook’s Q1 profits were helped by an uptick in daily active users. The company also added more advertisers that want to reach the 1.6 billion visitors that come to Facebook daily. Facebook will also make dramatic design changes to the site to update its look and potentially attact more users.
Facebook’s Q1 earnings rose despite the controversies the company confronted. Now the social media company has to show that Facebook can secure user data so visitors will continue to trust the site.
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