Facebook Warns Skyrocketing Usage Won't Lead to Increased Revenue -- Update
March 24 2020 - 5:30PM
Dow Jones News
By Jeff Horwitz and Suzanne Vranica
Facebook Inc. warned that its business is expected to take a
hit, even as its products are seeing unprecedented usage as the
result of the novel coronavirus pandemic.
The tech giant's announcement is the latest sign of the major
blow expected for companies that lean heavily on online
advertising, where spending has rapidly dried up in recent
weeks.
In a post on Tuesday afternoon, Facebook said total messaging
across the platform's services has increased 50% in countries hit
hard by the virus, with video messaging more than doubling. In
Italy, which has undertaken some of the most intense and sustained
restrictions on public life of any country outside China, group
video calling is up by more than 1000% from a month ago.
But the company said the higher usage wouldn't shield it from
expected declines in digital advertising across the globe.
"We don't monetize many of the services where we're seeing
increased engagement, and we've seen a weakening in our ads
business in countries taking aggressive actions to reduce the
spread of COVID-19," wrote Alex Schultz, Facebook's vice president
of analytics, and Jay Parikh, vice president of engineering.
The company didn't formally restate its earnings guidance but
said "our business is being adversely affected like so many others
around the world."
Facebook's announcement -- which also detailed steps the company
is taking to increase capacity and reduce the strain that
heightened video and calling traffic puts on communications
structure -- is in keeping with other recent announcements by
advertising-based tech platforms and media of reduced financial
targets.
Write to Jeff Horwitz at Jeff.Horwitz@wsj.com and Suzanne
Vranica at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
March 24, 2020 17:15 ET (21:15 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Aug 2024 to Sep 2024
Meta Platforms (NASDAQ:META)
Historical Stock Chart
From Sep 2023 to Sep 2024