Facebook ended a tumultuous 2020 with rising revenues in the last quarter, but the company predicts challenges in 2021, including an upcoming privacy update by Apple that could limit the social network’s ad targeting capabilities.
Apple’s decision received a rare public rebuke from Facebook CEO Mark Zuckerberg, who accused Apple in a conference call of promoting its own interests and not those of users.
Facebook said its already massive fourth-quarter user base grew as people stayed at home during the pandemic and reported revenues bolstered by a shift to digital advertising amid economic uncertainty associated with the coronavirus.
But the company predicted uncertainty for 2021, saying sales could be under severe pressure in the second half of the year. Because sales grew so fast in the second half of 2020, the social network may have trouble keeping up with that pace.
“It is clear that the pandemic has also continued to help Facebook’s monthly active user growth remain strong in many regions, including the US and Canada, where user profits had slowed to a crawl before the pandemic,” said eMarketer analyst Debra. Aho Williamson. But she noted that the number of daily users in this region was declining, suggesting that people in the US and Canada are moving elsewhere – likely TikTok, which grew rapidly in 2020.
In the conference call with analysts, Zuckerberg came out with a swinging impression, saying that Apple is fast becoming one of Facebook’s “biggest competitors,” in part because of its dominance in messaging on the iPhone. Apple, he said, “has every incentive” to use its own mobile platform to interfere with the way competing apps work.
Apple will soon require apps to ask users for permission to collect data about the devices they use and to have ads track them around the internet. Facebook is pushing back against the changes, saying those rules could reduce what apps can earn by advertising through Facebook’s audience network.
Of course, Apple’s move also poses a threat to Facebook’s own ad revenue. However, Zuckerberg focused on what he sees as Apple’s motives.
“Apple may say they are doing this to help people, but the steps clearly follow their competitive interests,” said Zuckerberg.
Apple, meanwhile, says people should be empowered to have more control over their data. Executives have dismissed arguments from advertisers and companies like Facebook that say the anti-tracking feature will hurt the online advertising industry.
“If invasive tracking is your business model, you tend not to welcome transparency and customer choice,” Craig Federighi, Apple’s chief of software, said in December.
Facebook made $ 11.22 billion, or $ 3.88 a share, in the October-December period, well above the $ 3.19 analysts expected and up 53% from a year earlier. Revenue grew 22% to $ 28.07 billion, higher than the $ 26.36 billion analysts predicted, according to a FactSet poll.
The monthly user base grew by 12% to 2.8 billion. Facebook ended 2020 with 58,604 employees, an increase of 30% from a year earlier.
While Facebook doesn’t disclose how much it makes from Instagram, which it owns, eMarketer estimates that the app accounted for 36% of Facebook’s total ad revenue and nearly half of its US ad revenue.
Shares of the Menlo Park, California-based company rose $ 1.23 to $ 273.37 during out-of-hours trading. The stock market price rose by 33% in 2020.