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Facebook doubles profit, but warns of cooling growth

Facebook doubles profit, but warns of cooling growth

July 30, 2021

Facebook posted profits of more than $10 billion in the second quarter of 2021, doubling the result from the same period last year. Monthly active users, including Instagram and WhatsApp, were 3.51 billion as of June 30, 2021, almost half of the world’s population.

Profit jumped to US$10.4 billion (S$14.1 billion) on revenue of US$29 billion, a 56 per cent increase from last year, mainly from a jump in ad revenues, Facebook said in its second-quarter report.

The number of people using the social network monthly climbed to 2.9 billion, a year-on-year gain of 7 per cent. And some 3.5 billion people used at least one of the company's apps, including Instagram, WhatsApp and Messenger.

"We had a strong quarter as we continue to help businesses grow and people stay connected," Facebook chief executive Mark Zuckerberg said in an earnings release.

However, Facebook shares slipped some 4 per cent as the tech giant warned that growth was expected to slow due to regulatory actions and a tweak to the Apple iPhone operating software that could hurt its ad targeting.

The move by Apple early this year has sparked a rift with Facebook and other tech rivals, and could have major implications for data privacy and the mobile ecosystem.

Apple began requiring apps to tell users of its mobile devices what tracking information they want to collect and get permission to do so.

Opting out of being tracked makes it harder for companies such as Facebook to target the ads on which they depend for revenue.

"This has been very challenging for advertisers and we're working with them to help navigate these changes," Facebook chief financial officer David Wehner said on an earnings call.

The results come with large tech firms facing heightened scrutiny from antitrust enforcers in the United States and elsewhere for their dominance.

Facebook won dismissal of a case brought in a US federal court last year, but the authorities are seeking to refile the case, which could potentially lead to a break-up of the social media giant.

Facebook is on track to bring in more than US$100 billion in annual ad revenue for the first time, according to industry tracker eMarketer.

Google is the top digital ad publisher with nearly 29 per cent of the market, with Facebook having the second largest share, just shy of 24 per cent.


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