Published: Thu, April 26, 2018
Research | By Clarence Powell

No impact on Facebook from privacy scandal, profits up in first quarter

No impact on Facebook from privacy scandal, profits up in first quarter

Facebook showed at least initial resilience on Wednesday when it released its financial results from the first quarter, a period when the social network was criticized for the way it handles information about its users.

Mobile advertising revenue represented approximately 91% of advertising revenue for the first quarter of 2018.

But advertisers have shrugged off the scandals in the aggregate.

The results are some much-needed good news for the California company, which has been in damage control mode for weeks, fighting to contain the fallout from the Cambridge Analytica scandal and reassure users. Daily active users were 1.45 billion, on average, for March 2018, an increase of 13 per cent year-on-year.

"So long as profits continue to grow at a rapid rate, investors will accept that higher spending to ensure privacy is warranted", Wedbush Securities analyst Michael Pachter said.

These figures come in the wake of bad press that the company's received for its involvement in the Cambridge Analytica privacy scandal.

The better-than-expected results propelled Facebook shares 7 percent higher in United States after-hours trade, with investors relieved that the social network giant appeared unscathed financially despite getting caught up in a user data misuse controversy.

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So will this result from Facebook be enough to steady the fragile USA share markets?

After finding the first replies from CA "cryptic and evasive", the government has sought further responses from the data mining company for five more posers from the company.

The government had to make this pointedly clear because the American social networking platform has already admitted that almost 5.62 Lakh Indians were "potentially affected" by the data breach incident, however, Cambridge Analytica continues to be in denial to reveal any such data and it still claims that it does not have any Facebook data on Indian citizens.

Facebook CEO Mark Zuckerberg recently testified at two Congressional hearings at which he fielded lawmakers' questions about the company's continued stumbles with data privacy and how it meant to prevent future disasters. "To each query, the company that faces probes in different parts of the world for illegal data mining, has provided one line answers which don't explain anything or provide any assurances".

The notice has asked about the proceedings that the social media giant has undertaken against those who have violated Facebook's policies of privacy. Sheryl Sandberg, Facebook's COO, said some advertisers had taken a "pause" with Facebook amid the scandal. Although it was suggested that the firm may have used the data to target specific ads toward potential voters during its work for the Trump campaign, spokesman Clarence Mitchell claimed this week that the company decided not to use the information after realizing it was "ineffectual".

However, contrary to stand taken by Cambridge Analytica, Facebook had said that around 5.62 lakh people in India could have been impacted by the data breach undertaken allegedly by the political consultancy.

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