Facebook’s growth puts Trump in his shoes
WASHINGTON (Reuters Breakingviews) – Social media has gone from Donald Trump. Alphabet’s businesses from Twitter to Facebook to YouTube banned the former US president after rioters stormed the US Capitol in January. He – and his supporters – were prolific users of the networks. And yet Facebook ad revenue surged in the first quarter, and monthly active users didn’t miss a beat. It will take a lot more than a few new platforms and the demise of some popular posters to bring down traditional social media.
The company led by Mark Zuckerberg said on Wednesday its revenue jumped 48% to $ 26.2 billion, well above analysts’ expectations. Monthly active users have increased by 15% on its platforms. Advertising is strong – the company said ad sales increased 46%.
This is in part because Facebook’s reach makes it harder for the masses to leave it. Popular allies of Trump, including the former president’s son Don Jr., are still active on the network. The same goes for others, like Senator Ted Cruz and Conservative expert Sean Hannity. This increased revenue per user by 33% to $ 9.27.
But it’s also because Facebook has done a good job of diversification. Analysts estimate that around 25% of its revenue comes from Instagram, which doesn’t have as much political leaning. According to Statista, the company also slips a lot of its traffic from users who check out friends’ posts or provide status updates. Only 6% of Facebook content is political.
According to Pew Research, it can also help if Instagram and Twitter have more Democratic users. And while Trump was more important to Twitter, with 88 million subscribers, or more than 45% of the company’s monetizable daily active users, analysts expect Jack Dorsey’s company to do well as well. They predict revenue will rise 24% in the first quarter to $ 1 billion when it reports Thursday, according to Refinitiv.
The conservative version of Twitter, Talk, faced a major setback in January after being kicked out of Apple and Google app stores, while Amazon.com halted cloud services. The iPhone maker will allow Parler, with 13 million users, to restart after making changes. Trump could also network online later this year. This can increase competition moderately. So far, Facebook has shown that it can just roll with the punches.
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NEWS FROM THE CONTEXT
– On April 28, Facebook reported a 48% increase in Q1 2021 revenue to $ 26.2 billion, with ad revenue jumping 46% to $ 25.4 billion. Analysts were forecasting revenue of $ 23.7 billion, according to Refinitiv.
– For previous author columns, Reuters clients can click [CHON/]
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