Facebook And Google’s Profits Aren’t Taking A Hit From Media Storm Over Russia
Investors still appear highly interested in Facebook and Google, even though both companies have allegedly been exploited by Russian operatives to spread disinformation.
Facebook shares, for example, are close to an all-time high, according to the Financial Times. Facebook CEO Mark Zuckerberg revealed that it exceeded $10 billion in quarterly revenue, a first for the relatively young company.
“Our community continues to grow, now with nearly 2.1 billion people using Facebook every month, and nearly 1.4 billion people using it daily. Instagram also hit a big milestone this quarter, now with 500 million daily actives,” Zuckerberg wrote in a prepared statement published on his profile Nov. 1. “And we saw good results in the business, where total revenue grew 47% year-over-year[.]”
Zuckerberg also said that investments in stronger security — specifically to combat misleading or false content — would “significantly impact our profitability going forward.”
“But none of that matters if our services are used in ways that don’t bring people closer together — or if the foundation of our society is undermined by foreign interference,” he said in his quarterly results and community update. “I’ve expressed how upset I am that the Russians tried to use our tools to sow mistrust. We build these tools to help people connect and bring us closer together. They used them to try to undermine our values. What they did is wrong and we’re not going to stand for it.”
Zuckerberg’s expression that he is “dead serious about this” may be a way to boost the confidence of investors who may fret about ostensible Russian operatives’ use of his proprietary platform, and the subsequent effects. The additional warning that increasing investment in security measures and features may decrease profitability, yet is likely a way to preemptively justify the potential dip.
So far, there appears to be no such decline — in fact, the opposite is happening.
A decrease in profitability, and thus investors, is still possible. U.S. senators have introduced legislation that would thrust bureaucrats further into the political advertising market, and mandate platforms do spend more for intervention efforts. Companies like Twitter and Facebook have substantially upped expenditures for operating costs in the past five years, according to FT. At least portions of this are tied to terrorist-combatting and fake news-fighting initiatives.
Google’s operating costs have steadily, but only slightly increased over the years. Share prices for Google, though, have significantly climbed in recent years, according to FT. Lawmakers questioned Google — along with Twitter and Facebook — officials during a hearing this fall on foreign influence during the election season. (RELATED: Al Franken Warns About Big Tech’s Control Over Our Lives)
Like Facebook, Google and Twitter’s bottom line seems unaffected by calls for regulations and fear that advertisers would protest the platform.
These platforms have become essential for modern advertising and promotional endeavors. (RELATED: Google And Facebook Keep Strengthening Their Stranglehold On Digital Ad Marketing)
The future outlook is up in the air, as it’s not perfectly clear if advertisers or investors will soon start to shy away from the platforms after talks of regulation and a growing skepticism among portions of the public.
A surge in operating costs for Twitter may not be as easy to fund and manage in comparison to Google and Facebook.
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