Facebook has become the technology industry's boy who cried wolf.
The company kept warning that its rate of revenue growth would slow and that its plans to spend more money and remodel Facebook into less of a cesspool would drag down profit margins and perhaps result in people using Facebook less.
Investors learned not to be so concerned about Facebook's predictions of impending doom, although now it looks as if some of those cautions are coming true and outsiders weren't sufficiently braced for it.
Facebook said on Wednesday that its revenue in the fourth quarter of 2017 rose 47 per cent from a year earlier. Yes, that was (barely) the sixth consecutive quarter of slowing growth for Facebook; but come on, it's impressive for a company of Facebook's size to regularly boost sales at this pace. Out of 300 global companies of Facebook's size, only a few are growing more quickly, Bloomberg data show.
The fourth-quarter revenue performance came despite Facebook's repeated warnings that its advertising sales growth would slow noticeably at this point because of its decision to stop shoving more ads into the Facebook news feed. It's clear that Facebook more than made up the difference thanks to higher ad prices and new types of advertisements that appeal to companies eager to pitch to Facebook's giant audience.
Wall Street does expect Facebook's sales to slow meaningfully soon. Analysts think Facebook's revenue will increase about 33 per cent in 2018, according to the average of estimates compiled by Bloomberg. That's slow for Facebook but impressive in any rational world. It makes sense for any company to underpromise and over-deliver. But given how often Facebook has warned investors that its financials will start to look a little less handsome, they may not believe the company if the ugliness really comes this time.
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Read more:
Facebook bans ads tied to Bitcoin and other cryptocurrencies
Soros says Google and Facebook should be more strictly regulated
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That's more of a worry now because Facebook has started to fire up the alarms about other elements of its business, and those appear to be coming true. CEO Mark Zuckerberg recently said his decision to change the formula to prioritise "meaningful social interaction" on Facebook might cause people to spend less time hanging out on the social network.
The company disclosed on Wednesday the slowest rate of growth in its history in the number of daily users. The number of users in North America fell for the first time in the fourth quarter. And Facebook said that the changes it made to play down viral videos and other less-than-optimal programming reduced the time spent on Facebook by roughly 50 million hours each day. That works out to roughly 2 minutes for each of Facebook's 1.4 billion daily users.
In principle, though, even a small reduction isn't good for Facebook's future advertising revenue because the more time people spend on Facebook, the more chances Facebook has to sell paid commercials. Facebook shares dipped about 4 per cent in trading after the regular market close before rebounding.
The worry, of course, is that Facebook's second quarter of relatively meek daily user growth may be the result of people's dislike of hanging out on Facebook. And that's an existential threat to Facebook's popularity and its business. That's worthy of five ringing alarms of caution. The changes Facebook made to its news feed were announced after the end of 2017. It seems likely, then, that slowing daily user growth in the fourth quarter wasn't caused by the news feed changes, and that more declines in time spent may be coming.
Other fears have yet to come to pass. Facebook has also said it will spend much more this year on people and technology to oversee posts and advertising, to avoid a repeat of the 2016 Russian-backed misinformation campaigns that remain the subject of congressional inquiry. It also plans to spend more on video programming for its TV-like digital hangout and to build up relatively young businesses including virtual reality and artificial intelligence.
Facebook has warned that this increased spending will hurt its profit margins in 2018, but investors don't seem to believe it. Wall Street's expectations work out to an expected 2018 operating income margin of 43 percent, Bloomberg data show. Facebook ended 2017 by posting a record 57 per cent quarterly operating margin. That gives the company room to spend more without dragging its margins to worrisome levels.
Facebook has been tamping down expectations for so long, investors didn't take seriously enough the company's cries of distress. And as the stock reaction from Facebook's user growth and engagement numbers show, investors weren't prepared for Facebook's warnings to come to fruition.
Teaching in coronavirus times
Company%20profile
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Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
COMPANY%20PROFILE%20
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'The Coddling of the American Mind: How Good Intentions and Bad Ideas are Setting up a Generation for Failure'
Greg Lukianoff and Jonathan Haidt, Penguin Randomhouse
The%20Sandman
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Greatest Royal Rumble results
John Cena pinned Triple H in a singles match
Cedric Alexander retained the WWE Cruiserweight title against Kalisto
Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus
Jeff Hardy retained the United States title against Jinder Mahal
Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos
Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe
AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out
The Undertaker beats Rusev in a casket match
Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match
Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
THE SPECS
Cadillac XT6 2020 Premium Luxury
Engine: 3.6L V-6
Transmission: nine-speed automatic
Power: 310hp
Torque: 367Nm
Price: Dh280,000
KILLING OF QASSEM SULEIMANI
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Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Stormy seas
Weather warnings show that Storm Eunice is soon to make landfall. The videographer and I are scrambling to return to the other side of the Channel before it does. As we race to the port of Calais, I see miles of wire fencing topped with barbed wire all around it, a silent ‘Keep Out’ sign for those who, unlike us, aren’t lucky enough to have the right to move freely and safely across borders.
We set sail on a giant ferry whose length dwarfs the dinghies migrants use by nearly a 100 times. Despite the windy rain lashing at the portholes, we arrive safely in Dover; grateful but acutely aware of the miserable conditions the people we’ve left behind are in and of the privilege of choice.
What is type-1 diabetes
Type 1 diabetes is a genetic and unavoidable condition, rather than the lifestyle-related type 2 diabetes.
It occurs mostly in people under 40 and a result of the pancreas failing to produce enough insulin to regulate blood sugars.
Too much or too little blood sugar can result in an attack where sufferers lose consciousness in serious cases.
Being overweight or obese increases the chances of developing the more common type 2 diabetes.
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Afro%20salons
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Day 2, Abu Dhabi Test: At a glance
Moment of the day Dinesh Chandimal has inherited a challenging job, after being made Sri Lanka’s Test captain. He responded in perfect fashion, with an easy-natured century against Pakistan. He brought up three figures with a majestic cover drive, which he just stood and admired.
Stat of the day – 33 It took 33 balls for Dilruwan Perera to get off the mark. His time on zero was eventful enough. The Sri Lankan No 7 was given out LBW twice, but managed to have both decisions overturned on review. The TV replays showed both times that he had inside edged the ball onto his pad.
The verdict In the two previous times these two sides have met in Abu Dhabi, the Tests have been drawn. The docile nature of proceedings so far makes that the likely outcome again this time, but both sides will be harbouring thoughts that they can force their way into a winning position.
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
UAE tour of the Netherlands
UAE squad: Rohan Mustafa (captain), Shaiman Anwar, Ghulam Shabber, Mohammed Qasim, Rameez Shahzad, Mohammed Usman, Adnan Mufti, Chirag Suri, Ahmed Raza, Imran Haider, Mohammed Naveed, Amjad Javed, Zahoor Khan, Qadeer Ahmed
Fixtures:
Monday, 1st 50-over match
Wednesday, 2nd 50-over match
Thursday, 3rd 50-over match
The Al Barzakh Festival takes place on Wednesday and Thursday at 7.30pm in the Red Theatre, NYUAD, Saadiyat Island. Tickets cost Dh105 for adults from platinumlist.net
THE SPECS
Engine: 1.5-litre
Transmission: 6-speed automatic
Power: 110 horsepower
Torque: 147Nm
Price: From Dh59,700
On sale: now
MATCH INFO
Manchester City 4 (Gundogan 8' (P), Bernardo Silva 19', Jesus 72', 75')
Fulham 0
Red cards: Tim Ream (Fulham)
Man of the Match: Gabriel Jesus (Manchester City)
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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
SUZUME
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Brief scores:
Juventus 3
Dybala 6', Bonucci 17', Ronaldo 63'
Frosinone 0
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
