Facebook culminated in a tumultuous 2020 with growing gains in the last quarter, but the company predicted challenges in 2021 that include an Apple privacy update that could limit the social network’s ad targeting capabilities.
Apple’s decision drew a rare public disapproval from Facebook CEO Mark Zuckerberg, who during a conference call accused Apple of favoring its own interests rather than those of users.
Facebook said its already huge user base grew in the fourth quarter as people stayed home during the pandemic and reported revenues driven by a shift to digital advertising amid economic uncertainties related to the coronavirus.
But the company predicted uncertainty for 2021 and said its revenue in the second half of the year could face significant pressure. As revenue grew very quickly in the second half of 2020, the social network may have trouble keeping up.
“Clearly, the pandemic has also continued to help the growth of active monthly Facebook users to remain strong in many regions, including the U.S. and Canada, where before the pandemic, user earnings had declined to a crawl,” said Debra Aho Williamson , eMarketer analyst. But she noted that the number of daily users in this region has declined, suggesting that people in the U.S. and Canada are moving elsewhere – probably TikTok, which grew rapidly in 2020.
In the conference call with analysts, Zuckerberg said that Apple is quickly becoming one of Facebook’s “biggest competitors” due in part to its dominance of iPhone messaging. Apple, he said, “has every incentive” to use its own mobile platform to interfere with the functioning of rival applications.
Apple will soon require applications to ask users for permission to collect data about the devices they’re using and to allow ads to track them on the Internet. Facebook has been resisting the changes, saying that these rules can reduce what apps can gain from advertising on Facebook’s audience network.
Of course, Apple’s move also threatens Facebook’s own advertising revenue. Zuckerberg, however, focused on what he sees as Apple’s motives.
“Apple can say that it is doing this to help people, but the movements clearly track their competitive interests,” said Zuckerberg.
Apple, meanwhile, says people should have more control over their data. Executives rejected the arguments of advertisers and companies like Facebook, who say the anti-tracking feature will hurt the online advertising industry.
“When invasive tracking is your business model, you tend not to accept transparency and customer choice,” said Apple’s chief software officer Craig Federighi in December.
Facebook earned $ 11.22 billion, or $ 3.88 per share, in the period from October to December, well above the $ 3.19 that analysts had expected and an increase of 53% over the previous year. Revenue grew 22% to $ 28.07 billion, higher than the $ 26.36 billion that analysts had predicted, according to a FactSet survey.
Its monthly user base grew 12% to 2.8 billion. Facebook ended 2020 with 58,604 employees, an increase of 30% over the previous year.
While Facebook does not disclose how much it earns from Instagram, owned by it, eMarketer estimates that the app accounted for 36% of Facebook’s total advertising revenue and almost half of its advertising revenue in the United States.
Shares in the company based in Menlo Park, Calif., Rose $ 1.23 to $ 273.37 on the overnight trading session. The stock price rose 33% in 2020.