While 2020 turned out to be nothing less of a roller coaster ride for many, Facebook was one of the rare companies to have profited during the tumultuous year, earning in the billions in the winter quarter and having its already enormous user base grow as people were forced to stay at home during the pandemic. However, the California-based company warned that it would not be a smooth road in 2021 and it would “continue to face significant uncertainty”.
Facebook, in its final quarter earnings, reported revenue of $28.1 billion (against Wall Street’s prediction of $26.44 billion) and $3.88 earnings per share (against the prediction of $3.22 earnings per share). The company’s daily active users and monthly active users numbered at 1.84 billion and 2.8 billion respectively.
While its user base increased in Europe from 305 million to 308 million daily active users, in US and Canada, it fell to 195 million daily active users.
This comes after the announcement of an upcoming privacy protection update in iOS 14 by fellow tech giant Apple that could limit Facebook’s capabilities to target ads. The update would mean that apps would soon be required to ask their users for permission to collect data on the devices they are using, as well as to allow the showing of advertisements.
Facebook has been against this update from the start, objecting that this would mean reduced earnings for apps advertising through Facebook’s own audience network. This would threaten Facebook’s advertising revenue and affect its business.
Facebook CEO Mark Zuckerberg, in a conference call, accused Apple of prioritizing its own interests over that of users, revealing that the California-based company was fast becoming one of Facebook’s “biggest competitors” and had every incentive to use its own mobile platform to interfere with how rival apps work. “Apple may say they’re doing this to help people, but the moves clearly track their competitive interests. This dynamic is important for people to understand because we and others are going to be up against this for the foreseeable future,” he added.
Apple dismissed Facebook’s arguments and said that people should be more empowered to have more control over their data. “When invasive tracking is your business model, you tend not to welcome transparency and customer choice,” said Apple’s software chief Craig Federighi.
Facebook said in the first half of 2021, it will be lapping a period of growth that was negatively impacted by reduced advertising demand during the early stages of the pandemic. “We expect year-over-year growth rates in total revenue to remain stable or modestly accelerate sequentially in the first and second quarters of 2021. In the second half of the year, we will lap periods of increasingly strong growth, which will significantly pressure year-over-year growth rates.”