Facebook ended 2020 much financially stronger than at the beginning of the year, proving that its business can withstand the coronavirus pandemic and even thrive thanks to the dazzling screen time over the past 12 months.
The company posted revenue of more than $ 28 billion in the fourth quarter on Wednesday, with profits of $ 11.2 billion, 31 percent and 53 percent, respectively, on an annualized basis. In terms of usage, Facebook is up everywhere, with more than 1.84 billion people using its main social network at least once a day in December 2020, an increase of 11% year-on-year. As of December 31, 2020, more than 2.8 billion people go to Facebook at least once a month, a 12 percent jump from the previous year.
If you measure the use of its composite family with apps, which also include Facebook Messenger, Instagram and WhatsApp – a measure the company refers to as ‘family-active people’, the numbers are even better, as usual. More than 2.6 billion people watch one of Facebook’s apps every day (by 15 percent compared to 2019), while more than 3.3 billion watch one of the apps at least once a month (by 14 percent).
Facebook’s affairs were largely unaffected by the October decision to temporarily ban political advertising after the US election. (The company extended the ban by one month in December, but released advertising for the Senate races in Georgia.) This was to be expected; political advertising pales in comparison to the spending of e-commerce, standard retailers and small businesses on the platform.
Facebook’s category “Other”, which includes its Portal video chat devices and Oculus virtual reality business, has performed fairly well over the past quarter, with sales of 156 percent to $ 885 million. This past quarter saw the launch of Quest’s second-generation wireless Quest headset, the Quest 2. Portal devices have been experiencing year-round sales growth as people have moved to remote work and virtual hangouts at home.
But that’s not all good news for Facebook to look forward to. The company says it will “continue to face significant uncertainty in its earnings report if we manage a number of cross-streams in 2021”, indicating that the company will not be able to maintain the same rate of year-on-year growth as it enters the second half of 2021.
Unspoken in his report are privacy changes from Apple that could have significant consequences for Facebook’s advertising business, including new mandate for privacy and Apple’s upcoming plan to force app manufacturers to get permission to track people on iOS devices. Earlier this month, WhatsApp on Facebook delayed a new update to the privacy policy that sends users fleeing the app to competitors such as Signal and Telegram.
“At the same time, in the first half of 2021, we will be experiencing a period of growth that was negatively impacted by the reduced demand for advertising in the early stages of the pandemic,” the company writes. “As a result, we expect growth rates to remain stable in total revenue from year to year or to accelerate sequentially in the first and second quarters of 2021. In the second half of the year, we will have periods of increasingly strong growth, which will significantly push the growth rates from year to year. ”
Facebook also continues to defend its fair share of public relations and controversies over platform moderation around misinformation, election interference and the recent ban on former President Donald Trump. This is in addition to a new wave of US regulatory investigations underlined last month by an unprecedented federal lawsuit from the Federal Trade Commission, which seeks to derail the company’s expensive Instagram and WhatsApp acquisitions. But for the time being, these issues have little impact on the core of the business.