Move over, news feed: Mark Zuckerberg bets Facebook's future on video & disappearing posts
The company’s flagship social network has almost reached saturation point in terms of its growth.
By Bloomberg |
Agencies
By Sarah Frier
Facebook Inc. Chief Executive Officer Mark Zuckerberg is betting the company’s future on video and disappearing posts called "stories," not the company’s famous news feed. Investors are buying into the vision for now.
The newer products may make less money and steal user attention from the main stream of photos, comments and lucrative ads on the social network, Zuckerberg warned. Marketers aren’t totally comfortable with the new formats yet, and 2019 will be another year of significant investment, he added on a conference call with analysts Tuesday.
Still, the CEO said the opportunity will be bigger than the news feed over time. Chief Financial Officer David Wehner also calmed concern about costs next year and quarterly earnings from the company suggested its business is holding up in the wake of scandals and privacy breaches.
Facebook shares rose 3.1 percent in extended trading, after closing at $146.22 in New York. Earlier this year, the company said revenue growth rates would decline in the third and fourth quarters, sending shares plummeting. That set a low bar for Tuesday’s results.
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The company’s flagship social network has almost reached saturation point in terms of its growth, especially in the U.S. and Europe. And new Facebook users often live in less-lucrative advertising markets. That’s left company spending heavily on more experimental projects.
Future revenue growth depends on Facebook’s ability to shift marketers’ interest to new ads in messaging services, and marketing spots embedded in a popular way of sharing called "stories," especially on Instagram. In those formats, users post videos about their day that disappear within 24 hours. Users tap through them and see ads in between.
“I want to be upfront that even assuming that we get to where we want to go...it will take some time and our revenue growth may be slower during that period,” Zuckerberg said on Tuesday.
Facebook Data Breach Making Headlines, Here's How Other Scandals Began
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The Facebook leak was traced back to Aleksandr Kogan, an academic at Cambridge university. Here is the root of other such worldwide breaches.
(Image: Twitter/@AleksandrBKogan)
The Facebook leak was traced back to Aleksandr Kogan, an academic at Cambridge university. Here is the root of other such worldwide breaches.
(Image: Twitter/@AleksandrBKogan)
In 2012, companies like Visa Inc licensee, J C Penney Co, JetBlue Airways Corp and French retailer Carrefour SA were attacked by hackers, resulting in a collective loss of up to $300 million. A Russian and Ukrainian gang hacked into the records for over seven years, breaching 8,00,000 bank accounts and stealing more than 160 million credit and debit card numbers. While his colleagues did the hacking, 32-year-old Russian Roman Kotov was charged with mining the data.
In 2012, companies like Visa Inc licensee, J C Penney Co, JetBlue Airways Corp and French retailer Carrefour SA were attacked by hackers, resulting in a collective loss of up to $300 million. A Russi..
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While eBay’s database was hacked earlier in 2014, the news came out only in May that year. The online auction house went into damage control. Its then CEO John Donahue asked 145 million users to change their passwords, but said that financial information was stored separately and hence, remained safe. One mind boggling detail is that the unknown hackers had access to eBay’s accounts for 229 days.
While eBay’s database was hacked earlier in 2014, the news came out only in May that year. The online auction house went into damage control. Its then CEO John Donahue asked 145 million users to chan..
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In 2007, more than 94 million customer accounts belonging to the department store group TJX were compromised. The man behind it, Albert Gonzalez, was also indicted in the Heartland Payment’s data breach, where hackers stole more than 130 million credit and debit card numbers from the payment processing system in 2008. College dropout Gonzalez used several screen names like ‘soupnazi’ (a reference to the popular Seinfeld episode), ‘kingchilli’ and ‘cumbajohny’ in the TJX hack. While Gonzalez was arrested in a Miami hotel, officials found $1.6 million in cash hidden in plastic bags in a drum buried at his parent’s backyard. The soupnazi was sentenced to 20 years in prison in 2010.
In 2007, more than 94 million customer accounts belonging to the department store group TJX were compromised. The man behind it, Albert Gonzalez, was also indicted in the Heartland Payment’s data bre..
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The personal records of over 78 million customers were stolen in 2015 from American health insurance giant Anthem. Investigators suspected China’s role in the breach. Apparently, the hack happened in 2014, when just one user at an Anthem subsidiary opened a phishing email. It gave access to the company’s warehouse. In 2017, Anthem reached a settlement of $115 million — the money will reportedly be used to pay for an additional two years of credit monitoring for the breach’s victims.
The personal records of over 78 million customers were stolen in 2015 from American health insurance giant Anthem. Investigators suspected China’s role in the breach. Apparently, the hack happened in..
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Literally every single Yahoo user account was hacked into. In September 2017, Yahoo confirmed that all of its three billion accounts were exposed as part of an August 2013 breach. In a separate incident in 2016, a hacker called Peace put up the company’s user information for sale in the darknet market site, The RealDeal. The news affected Verizon’s takeover of the company, knocking off $350 million from the sale price. Verizon bought out Yahoo in June 2017.
Literally every single Yahoo user account was hacked into. In September 2017, Yahoo confirmed that all of its three billion accounts were exposed as part of an August 2013 breach. In a separate incid..
Facebook Watch and Instagram TV, the company’s two video services, are way behind Google’s YouTube in terms of size, Zuckerberg said. The stories format is popular on Instagram and WhatsApp, but on the main social network it’s just starting to gain traction. Suitable ads are difficult to make, he added. Still, Zuckerberg thinks this is how users will share information in the future.
Tuesday’s results bought Zuckerberg some time to pursue the new initiatives.
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Third-quarter revenue jumped 33 percent, while profit was $1.76 a share, well ahead of Wall Street projections, according to data compiled by Bloomberg. Monthly active users totaled 2.27 billion, up 10 percent from a year earlier.
"Facebook grew revenue at a nice pace in the important U.S. and Canada markets," EMarketer analyst Debra Aho Williamson said. "Facebook also managed to eke out a small usage gain in the U.S. and Canada. After the flatness we saw last quarter, that’s a good sign."
The results suggest that advertisers continue to buy more Facebook ads. And they’ve embraced Instagram, which recently passed 1 billion users.
The earnings report comes a week before an even bigger test for the company: The U.S. midterm elections. Facebook’s executives have touted their commitment to avoid the missteps of the 2016 election, when Russia ran a misinformation campaign that disrupted U.S. politics. Facebook has been investing in safety and security, hiring thousands to monitor user complaints and investigate unusual activity, while improving its technology to take down fake accounts and pages.
In recent months, Facebook disclosed further misinformation campaigns by Russia, Iran, and domestic actors. Fake news on Facebook has stoked discord, and even violence, in some countries. The problem is harder to track on WhatsApp, which is encrypted so Facebook can’t see the activity.
Facebook has been working to restore trust with users after a scandal in March over user data that an app developer shared with a political consultant -- an incident that led to Zuckerberg testifying before Congress in April.
More recently, it faced its largest-ever security breach. About 14 million people had sensitive information, like their search history and location check-in history, accessed by hackers.
Still, some analysts think Facebook’s business can continue to thrive.
"2019 is a make-or-break year, as revenue growth will accelerate if Facebook can execute,” Jitendra Waral, an analyst at Bloomberg Intelligence, wrote in a note to clients.
When Being A Lefty Helped Ratan Tata, Mark Zuckerberg And Others With Life Lessons
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A recent study in Biology Letters suggests that lefthanders have an advantage in high speed sports. It's time to pay homage to quick-reacting lefties in the boardroom.
A recent study in Biology Letters suggests that lefthanders have an advantage in high speed sports. It's time to pay homage to quick-reacting lefties in the boardroom.
When Ratan Tata took piano lessons, he had a problem. "I could not relate my left hand to do something different from my right hand," he said in a television interview. But when it comes to running his group of companies, even from behind the scenes, Tata's left arm has few equals. Till 2015, Tata's trusts would even give scholarships to the Indian Left-Hander Club. Perhaps it is one of the reasons some Tata vehicles in overseas markets have a left-hand drive.
When Ratan Tata took piano lessons, he had a problem. "I could not relate my left hand to do something different from my right hand," he said in a television interview. But when it comes to running h..
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If Ratan Tata learned piano, Amar Bose tooled around with a violin. And like Tata, his musical talents were not much to sing home about. However, the violin lessons helped him develop an ear for high quality sound. It set him on the path of launching audio products that played a seminal role in enhancing the experience of listeners. Tata spoke of his admiration for Bose in the interview referred above. Bose is also known to have been a lefthander. Great minds work alike.
(Image: www.rle.mit.edu)
If Ratan Tata learned piano, Amar Bose tooled around with a violin. And like Tata, his musical talents were not much to sing home about. However, the violin lessons helped him develop an ear for high..
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Some guys have all the genes. Jobs had personality, drive and a powerful intuition. He was also blessed with ambidexterity. "I'm ambidexterous," he said in an interview to Newsweek in 1984. At the time, much of the Apple staff was left-handed. Jobs, a rebel and aesthete, seemed proud of this fact. "Most of them are also left-handed, whatever that means," he told Newsweek of his colleagues. "Almost all of the really great technical people in computers that I've known are left-handed. Isn't that odd?"
Some guys have all the genes. Jobs had personality, drive and a powerful intuition. He was also blessed with ambidexterity. "I'm ambidexterous," he said in an interview to Newsweek in 1984. At the ti..
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Some 20 years after Jobs made this comment, another great technical person in computers was getting ready to take on the world while at Harvard University. With the help of smart colleagues, he set up Facebook. And he too, reportedly, was left-handed. Zuckerberg has not said much on this important subject. But there is one photograph that proves beyond doubt that he is handy with his left hand. It shows him feeding a calf on a farm in Wisconsin.
Some 20 years after Jobs made this comment, another great technical person in computers was getting ready to take on the world while at Harvard University. With the help of smart colleagues, he set u..
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Codex Leicester has nothing to do with Jamie Vardy's goalmouth strategy. It is a 16th century notebook of scientific ideas and diagrams belonging to Leonardo da Vinci, the Italian inventor and artist. In 1994, Gates bought the 72-page journal from an auction for a record $30.8 million. The great Italian, whose intellect and skill had far reaching impact on science art and life as we know it now, was a lefthander. And so is Gates. "There's a little bit of higher variance of talent, high and low, for left-handers. But it's never been explained," Gates said.
Codex Leicester has nothing to do with Jamie Vardy's goalmouth strategy. It is a 16th century notebook of scientific ideas and diagrams belonging to Leonardo da Vinci, the Italian inventor and artist..
