SAN FRANCISCO – Facebook reported that its profit doubled in the recently ended quarter as digital advertising surged, but warned of cooler growth in the months ahead in an update that sent its share sinking.
Profit jumped to US$10.4 billion on revenue of US$29 billion, a 56% increase from last year, mainly from a jump in ad revenues, said Facebook in its second-quarter report.
The number of people using the social network monthly climbed to 2.9 billion, a 7% gain year-over-year.
“We had a strong quarter as we continue to help businesses grow and people connected,” said chief executive Mark Zuckerberg in an earnings release.
However, Facebook shares slipped some 3%, as the tech giant warned that growth is expected to slow due to regulatory actions and a tweak to the iPhone operating software that could hurt its ad targeting.
“We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates,” it said in the earnings release.
The move by Apple early this year has sparked a major rift with Facebook and other tech rivals, and could have major implications for data privacy and the mobile ecosystem.
Apple began requiring apps to tell users of its mobile devices what tracking information they want to collect and get permission to do so.
Opting out of being tracked makes it harder for companies such as Facebook to target the ads on which they depend for revenue.
The results come as Facebook and other large tech firms face heightened scrutiny from antitrust enforcers in the United States (US) and elsewhere for their dominance of key economic sectors.
Facebook won dismissal of a case brought in US federal court last year, but authorities are seeking to re-file the case, which could potentially lead to a break-up of the social media giant. – AFP, July 29, 2021
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