In the final quarter, Facebook capped a turbulent 2020 with increasing profits, but the firm expected obstacles in 2021, including an upcoming privacy upgrade by Apple that could restrict the ad targeting capability of the social network.
The Apple change drew a rare public criticism from Facebook CEO Mark Zuckerberg, who accused Apple of favouring its own needs and not those of consumers during a conference call.
As people stayed home during the pandemic and posted sales driven by a move to digital ads in the midst of coronavirus-related economic instability, Facebook said its already massive user base expanded in the fourth quarter.
But for 2021, the company forecast volatility and said its sales could face considerable pressure in the latter half of the year. The social network may have trouble holding the pace because income rose too steadily in the second half of 2020.
“The pandemic has also clearly continued to help Facebook’s monthly active user growth to remain strong in many areas, including the United States and Canada, where user gains had slowed to a crawl prior to the pandemic,” said eMarketer analyst Debra Aho Williamson. But she noticed that in this area, the number of regular users decreased, indicating that individuals are going elsewhere in the U.S. and Canada, perhaps TikTok, which expanded rapidly in 2020.
“Zuckerberg came out swinging in the conference call with investors, claiming Apple is rapidly becoming one of Facebook’s “biggest rivals” thanks in part to its iPhone messaging supremacy. Apple, he said, “has every incentive” to mess with the way competing applications operate by using its own mobile network.
Apple will shortly need developers to seek approval from consumers to gather information about what gadgets they are using and to make advertisers track them on the internet. Facebook has been fighting back against the reforms, claiming those laws will decrease what apps from ads through the audience network of Facebook would receive.
Of course, Facebook’s own advertisement revenue is also threatened by the Apple change. Zuckerberg, though, reflected on what he saw as Apple’s motivations.
“Apple may say that they are doing this to help individuals, but their competitive interests are clearly tracked by the moves,” Zuckerberg said.
Meanwhile, Apple says that people should be encouraged to have more control over their knowledge. Executives have denied claims from marketers and businesses such as Facebook who claim the anti-tracking functionality would damage the advertisement industry online.
“You tend not to welcome transparency and customer choice when invasive tracking is your business model,” Apple’s tech boss Craig Federighi said in December.
In the October-December period, Facebook raised $11.22 billion, or $3.88 per share, way above the $3.19 that analysts predicted and up 53 per cent from a year ago. According to a FactSet poll, sales rose 22 percent to $28.07 billion, more than the $26.36 billion analysts were expecting.
Its monthly user base grew to 2.8 billion by 12 percent. With 58,604 employees, Facebook finished 2020 with a 30 percent growth from a year ago.
EMarketer reports that the app accounts for 36 percent of Facebook’s overall advertisement sales and almost half of its U.S. ad revenue, while Facebook does not split out how much it generates from Instagram, which it owns.
In after-hours trade, shares of the Menlo Park, California-based company climbed $1.23 to $273.37. In 2020, the stock price rose 33 percent.
