When it comes to Facebook, the highs and lows just keep coming.
On the one hand, the social media giant posted record profits for the holiday quarter in 2018. On the other, it proceeded to get itself into another privacy scandal, angering another technology giant: Apple Inc.
First thing’s first: Facebook just posted record profit for the fourth quarter ending December 2018, because of $6.88 billion in net income, a 61 percent growth compared to last year. Its average revenue per user clocked in at $7.37, which dwarfed the forecasted $7.11. That ARPU represented 21 percent over the previous quarter and 19 percent over the same period last year. Earnings, at $2.38 per share, jumped 65 percent year-over-year.
Plateauing user growth in North America and Europe was a major concern for the company in 2018. While those worries haven’t completely gone away — particularly as scandals keep erupting around the tech company — the matter does not seem as dire as it appeared last year, at least for now.
Daily and monthly active users hit expectations, at 1.52 billion and 2.32 billion users, respectively, meeting the benchmark for growth. Both represent a 1.8 percent gain over last quarter, and 8.6 percent increase over the same period in 2018.
Clearly, the user base isn’t expanding as rapidly as it did in the past. But Facebook added a million daily users in the U.S. and Canada, and saw growth in every region, which matters. And considering the high-profile scandals that have been dogging the platform, Wall Street apparently still views it as a good sign. At the close of trading, Facebook shares landed at $150.42, up 4.32 percent, and continued to rocket up more than 12 percent in extended trading.
“Our community and business continue to grow,” said Facebook founder and chief executive officer Mark Zuckerberg. “We’ve fundamentally changed how we run our company to focus on the biggest social issues, and we’re investing more to build new and inspiring ways for people to connect.”
Naturally, Zuckerberg wants to talk about the successes, the hit Stories feature and the warm-and-fuzzy narrative of helping people connect, rather than the last-minute scandal that slid in and ticked off Apple, just before Facebook’s earnings posted.
The latest cat fight between the Silicon Valley giants intensified Wednesday, when the iPhone maker blocked the social media company’s ability to distribute internal iOS apps. The reason: Facebook’s off-label use of Apple’s tech.
Under Apple’s guidelines, companies are allowed to develop and distribute iOS apps for purposes such as workplace communications and testing prerelease versions of apps and updates. Facebook employs such iPhone apps across its workforce. This alone presents no issue. The problem stems from Facebook’s other use for this channel: distributing a “research” app outside the company to target teens, so it could track them.
In exchange, the participants were paid and, in some cases, participated by sending images displaying their mobile usage.
Apple did not immediately respond to a WWD request for comment, but in other public remarks, the Cupertino, Calif.-based company has acknowledged the issue and confirmed that it shut down Facebook iOS enterprise channel.
When questioned about the matter, Facebook told reporters that it planned to take action and shut the app down itself. But then Apple beat it to the punch — and in the process, sealed off all of its other internal iOS apps.
People familiar with the situation told WWD that the lockdown has primarily affected employees with iPhones in cases such as looking up lunchroom menus, shuttle schedules and conference room bookings. Beyond that, internal beta versions of some of Facebook’s apps — which may include Facebook itself, as well as Instagram, Messenger and others — have stopped working.
If Facebook intends to unify its apps under one umbrella, as previous rumors described, and was actively developing changes for it, then the issue could be a wrench in the works.
For now, it’s clear that this latest revelation didn’t have an impact on Facebook’s fourth-quarter earnings report. And it’s not clear if it will influence the next one. But that leads to an important question, maybe the most important one in the Information Era: How far is too far, when it comes to companies bending policies and tracking users? If bottom lines aren’t at stake, then it’s a tough question to tackle.
It would be fascinating if Apple wound up doing what public pressure and Congressional inquiries couldn’t.