Facebook earnings, user base jump even as scandals grow

CEO Mark Zuckerberg also oversees a jump in sales and profit.

Queenie Wong Former Senior Writer
Queenie Wong was a senior writer for CNET News, focusing on social media companies including Facebook's parent company Meta, Twitter and TikTok. Before joining CNET, she worked for The Mercury News in San Jose and the Statesman Journal in Salem, Oregon. A native of Southern California, she took her first journalism class in middle school.
Expertise I've been writing about social media since 2015 but have previously covered politics, crime and education. I also have a degree in studio art. Credentials
  • 2022 Eddie award for consumer analysis
Queenie Wong
4 min read

Facebook CEO Mark Zuckerberg

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Facebook's spat with Apple on Wednesday shows it can't stay out of trouble. But the social network seems immune to scandals as well.

Monthly active users -- the number of people who log on to Facebook every month -- rose 9 percent year over year to 2.32 billion in the fourth quarter, which ended Dec. 31. User growth is crucial for Facebook, which makes its money by selling advertising targeted to user interests. 

The rise in users comes as the company deals with yet another black eye. Overnight, Apple blocked a research app the social network was distributing to iPhone users, after it was discovered Facebook had sidestepped the review process. The Facebook Research app paid users between the ages of 13 to 35 up to $20 per month in exchange for letting Facebook access their phone and web activity, including personal messages.

The scrape with Apple comes as Facebook, which still posted a 61 percent rise in profits, is grappling with the most serious crisis in its 15-year history. The leadership of CEO Mark Zuckerberg and COO Sheryl Sandberg has been called into question, particularly after The New York Times reported that the two executives ignored warnings and deflected blame as scandals mounted. The social network has also faced criticism for reportedly giving other tech companies greater access to user data than was previously disclosed. And Facebook's image wasn't helped by a software bug that exposed the photos of up to 6.8 million people to third-party app developers. 

The problems, along with growing concerns about how Facebook profits from the user data it collects, prompted calls for people to delete their Facebook accounts. The movement was so widespread that the hashtag #DeleteFacebook trended on Twitter for a period in March.

"There's a lot of negativity about the impact of technology. Some of it is fair and some of it is misplaced," Zuckerberg said during a conference call with analysts on Wednesday. "And we and the tech industry overall should be scrutinized heavily because we play a role in many people's lives."

Watch this: Facebook is a moneymaking machine

During the call, the 34-year-old tech mogul outlined four of Facebook's priorities for 2019, which include making progress on the social issues facing the internet and Facebook, building services that improve people's lives, supporting businesses and being more transparent about the role Facebook plays in the world. Zuckerberg didn't address the tech firm's clash with Apple during the call. 

Facebook saw the most growth in monthly active users in Asia-Pacific and the rest of the world from the third to fourth quarter, data from the company shows. But the company also noted that 11 percent of its monthly active users in the fourth quarter may have been from duplicate accounts, a data point that was slipped into the fine print of the last page of its presentation. False accounts -- those that are created for spam, pets, businesses or organizations -- may have made up about 5 percent of its monthly active users.

On Wednesday, Facebook reported that its revenue grew by 30 percent to $16.9 billion in the fourth quarter, beating the estimate of $16.3 billion forecast by analysts who were surveyed by Thomson Reuters. The company posted a profit of $6.9 billion in the fourth quarter.

Facebook shares jumped nearly 12 percent in after-hours trading to $168.33 after the conference call ended.

An uphill battle

Zuckerberg has defended the company's business model, arguing last week in a Wall Street Journal opinion piece that it enables billions of people to connect with family and friends for free, and lets small businesses sell their products and create jobs.

But the company still needs to demonstrate that it's doing enough to safeguard user data, given its track record on privacy. In March, Facebook revealed that Cambridge Analytica, a UK-based political consultancy, harvested the data of up to 87 million users without their permission. 

Facebook is also trying to do a better job of educating users about how to control the ads they see on the social network. A study published this month by the Pew Research Center showed that 74 percent of adults in the US who use Facebook didn't know the social network keeps a list of their interests and traits for ad targeting.

Meanwhile, Facebook has bigger problems to worry about, including the spread of misinformation on the site, as well as election meddling by Russia and Iran. 

On Monday, Facebook outlined how it was stepping up its efforts to combat fake news ahead of the European Parliament election in May. The company, which has faced allegations that it's suppressing conservative speech, also provided more details about a new board it's creating to help review content it keeps up or pulls down. 

First published Jan. 30, 1:17 p.m. PT.
Update, 1:40 p.m.: Adds background.
Update, 3:59 p.m.: Adds Zuckerberg's remarks from conference call. 

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