{"id":240875,"date":"2018-04-26T07:25:18","date_gmt":"2018-04-26T05:25:18","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=240875"},"modified":"2018-04-26T07:25:18","modified_gmt":"2018-04-26T05:25:18","slug":"facebook-is-finding-it-harder-to-get-more-people-to-log-on","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/240875\/facebook-is-finding-it-harder-to-get-more-people-to-log-on\/","title":{"rendered":"Facebook is finding it harder to get more people to log on"},"content":{"rendered":"
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Let’s get this out of the way: No, Facebook Inc hasn’t felt an immediate financial sting from the latest controversies over how it collects and protects people’s information. But that doesn’t mean the company is free\u00a0from danger.<\/p>\n

Facebook’s first-quarter revenue rose 49%, an acceleration of the company’s pace of growth from the prior two quarters, the company said Wednesday.<\/p>\n

And Facebook delivered a 45.5% operating profit margin, which\u00a0was lower than its recent performance but still impressive in light of a significant increase in spending.<\/p>\n

Growth also accelerated in the\u00a0average revenue Facebook generates from each user.<\/p>\n

This is the pattern that has made Facebook – at least until recently – an investor favorite. It is incredibly savvy about squeezing high-margin dollars from its audience of billions of users.<\/p>\n

The\u00a0scandal over the user data harvested by Cambridge Analytica, or the string of privacy or misinformation scandals before that, won\u2019t erode Facebook\u2019s magic overnight.<\/p>\n

One problem, though, is that the foundation of Facebook’s business model has come under question. That doesn’t appear to be an immediate risk, but there is a real threat that\u00a0regulation or popular pressure could crimp its data-reliant business.<\/p>\n

On a conference call with analysts on Wednesday, CEO Mark Zuckerberg and COO Sheryl Sandberg both defended Facebook\u2019s advertising-based business model.<\/p>\n

It would have been impossible to imagine a few months ago that Facebook\u2019s top executives would feel the need to justify how the company makes money.<\/p>\n

A more immediate and concrete worry is the signal that Facebook isn\u2019t as much of a draw as it used to be. For the third consecutive quarter, the company\u00a0posted an all-time low rate of increase in the number of people who log\u00a0into the social network at least once a day.<\/p>\n

The\u00a0number of daily users rose 12.9% in the first quarter from a year earlier.<\/p>\n

That\u2019s large for Facebook\u2019s scale, but the growth rate had been 17% to 18% as recently as the middle of 2017.\u00a0(Facebook also said the number of daily users in Europe might\u00a0plateau or decrease in coming months because of tightened privacy regulations.)<\/p>\n

Facebook did manage to increase slightly the number of daily users in the US and Canada, its most valuable audience for the advertising business. Last quarter, investors panicked about a slight\u00a0decline in this figure, but Facebook said it was a temporary lull.<\/p>\n

It looks for now as if Facebook was right.<\/p>\n

Despite now having 2.2 billion users each month, Facebook has never had trouble luring ever\u00a0more people to its digital hangout, and convincing them to stay even longer.<\/p>\n

\"\"<\/a><\/p>\n

But it seems to be getting tougher, and it\u2019s not clear how much of that is by the company’s design and how much\u00a0because people don’t want to be on Facebook. The company has in the past disclosed the average time Facebook users spend daily on the social network and other company hangouts.<\/p>\n

Pressed on Wednesday to update this figure, Facebook executives demurred\u00a0but did say that the amount of time people spent\u00a0passively watching videos on Facebook had decreased.<\/p>\n

Yes, Facebook has made an intentional effort to move away from luring people to spend more time hanging out on Facebook\u00a0and instead opted for a\u00a0harder-to-define goal\u00a0of “time well spent.\u201d<\/p>\n

But it\u2019s also possible that some people are less inclined to use Facebook\u00a0because they view it as a cesspool of human interaction, they don\u2019t find it as useful or informative anymore\u00a0or because they feel as if they should hate it given all the attention around\u00a0the company’s missteps.<\/p>\n

The good news is that the many storms raging around Facebook have lowered expectations a bit, and investors\u2019 first reaction to Facebook\u2019s earnings was a sigh of relief.<\/p>\n

Shares jumped about 6% in after-hours trading on Wednesday. Facebook has weathered its storms well\u00a0so far.<\/p>\n

There is enough evidence in its user growth figures to worry that the company may not have a revenue problem yet, but it could have a popularity problem.<\/p>\n

\"\"<\/a><\/p>\n

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Read: It\u2019s time to make our privacy tools easier to find: Facebook<\/a><\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Let’s get this out of the way: No, Facebook Inc hasn’t felt an immediate financial sting from the latest controversies over how it collects and protects people’s information. But that doesn’t mean the company is free from danger.<\/p>\n","protected":false},"author":59,"featured_media":176117,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[13037],"class_list":["post-240875","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-fcaebook"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/240875","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=240875"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/240875\/revisions"}],"predecessor-version":[{"id":240881,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/240875\/revisions\/240881"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/176117"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=240875"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=240875"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=240875"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}