Facebook is vulnerable: The world's largest online network missed forecasts for revenue and user numbers in the past quarter, the U.S. company announced Thursday. In Europe, the number of active users declined after the EU's General Data Protection Regulation came into force. The missed analyst expectations and the cautious forecast of the management team made themselves directly felt: As a result, the share price plummeted by over 23 percent at times - the stock market value fell by almost 150 billion dollars (128 billion euros) at times as a result. In German trading, the share price fell by 18 percent at midday on Thursday.
Facebook remains a money machine
Nevertheless, Facebook continues to be a money machine. Quarterly revenue rose 42 percent year-on-year to $13.23 billion (11.31 billion euros) thanks to the booming online advertising business. Profits grew 31 percent to $5.1 billion. The stock has been on a record-breaking run so far and had reached a new high before the quarterly figures were presented.
Facebook emphasized that the European General Data Protection Regulation has not affected sales, at least not so far. At the same time, however, the number of users active at least once a month in Europe fell from 377 to 376 million. There was even a drop in daily returning members from 282 to 279 million. At the same time, company CEO Mark Zuckerberg said it was encouraging that the vast majority of users in Europe had agreed to further data analysis for personalized advertising.
Overall, the number of monthly active Facebook users worldwide increased from just under 2.2 to 2.23 billion. Growth thus slowed down. In this situation, the Group introduced a new type of calculation: Around 2.5 billion users accessed at least one of the group's apps - which also includes the photo platform Instagram and the chat service WhatsApp - in June, it said.
However, the user figures went down badly with investors because reach is crucial for Facebook's advertising business. The extent to which the storm of criticism following the Cambridge Analytica data scandal could also have slowed growth remained unclear. Facebook had come under massive criticism because data from millions of users had flowed to the British company. In the North American home market, user numbers have not been growing for several quarters. Yet Facebook made more than 25 dollars in revenue per user in North America last quarter. In Europe, the figure was just 8.6 dollars.
Facebook itself had previously warned that the number of monthly and daily active users in Europe was likely to stagnate or decline slightly in the second quarter. The reason, it said, was the EU's General Data Protection Regulation (GDPR), which has had to be followed since May 25. It was also the first full quarter since the Cambridge Analytica scandal came to light.
The online network cannot escape criticism. Before Cambridge Analytica, the issue was Facebook's role in the 2016 U.S. presidential campaign, when social media was used for suspected Russia-led propaganda campaigns and the spread of fake news. "Overall, it's a pivotal year for Facebook," Zuckerberg said.
There was also bad news from China, where access to Facebook is blocked by censors. A new Chinese subsidiary had its license revoked after just one day. The decision was made by the cyber administration in Beijing, reported the New York Times Thursday. (SDA)