Published: Sat, November 03, 2018
Money | By Armando Alvarado

Facebook Misses Q3 Sales Estimates, But Users Continue To Grow (NASDAQ:FB)

Facebook Misses Q3 Sales Estimates, But Users Continue To Grow (NASDAQ:FB)

Just weeks ago, Facebook activated a "war room" as a nerve center to halt misinformation and manipulation of the social network by foreign actors trying to influence elections.

I expect 2019 to be another year of significant investment... "Stories monetizing at an estimated approximate 30 percent lower rate than News Feed, messaging/video monetization still de minimis and Instagram Explore still without any ads", wrote Morgan Stanley.

Overal, it's been a challenging year for the company.

Chief (Taiwan OTC: 3345.TWO - news) executive Mark Zuckerberg told them that earnings would continue to face pressure as Facebook moved to improve the user experience, particularly in video.

Facebook will announce its Q3 earnings results after markets close on Tuesday.

The company's flagship social network has nearly reached saturation point in terms of its growth, especially in the USA and Europe.

Yet Facebook does not charge as much for advertisers to run ads on "Stories" as it does in the News Feed, so shifting to ephemeral messaging may not be as lucrative, the company said.

Facebook's spending has ballooned from licensing more engaging content such as video, and as it tries to fortify itself against fraudsters and hackers. Users tap through them and see ads in between.

Facebook has tried for years to make its mark on the SME business world and has undeniably great opportunities in areas such as peer-to-peer payments via Messenger as well as Zuckerberg's penchant for virtual reality and, lately, home audio and video hardware.

He also said Apple's iMessage ($AAPL) is Facebook's "biggest competitor by far" in messaging, even though the tech giant isn't a social media company, according to Quartz. Suitable ads are hard to make, he added.

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Zuckerberg made $935 million from his regularly planned sales of Facebook stock since its peak stock day in July.

Tuesday's results bought Zuckerberg some time to pursue the new initiatives.

That slowdown reflects a stagnation in the growth of Facebook's monthly active users, which grew by 9.6% in the quarter.

Facebook reported DAU growth in its least profitable markets - those outside the US and Canada and Europe. 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".

Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide.

The company will also be tested next week when Americans vote in the November 6 midterm elections.

Controversies that have battered Facebook since the 2016 presidential election in the United States have raised questions over whether co-founder Mark Zuckerberg should keep his post as chief executive.

Meanwhile, Zuckerberg is facing increased pressure from United Kingdom and Canadian lawmakers to testify on the issues of data privacy and misinformation campaigns on Facebook.

In related news, Facebook is still looking for ways to send its assault against Twitch, as the social media giant has expanded its Level Up Program to game streamers around the world. Especially since it did have quite a few more security breaches during the quarter. Facebook will be hosting a webcast at 2pm ET/5pm PT to go over these results, where investors and analysts are able to ask questions and hear more about the quarter. In addition to its revenues, Facebook's user growth also continued to take a hit. Making it a pretty tough thing for Congress to regulate Facebook - and for that matter Twitter or Google.

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