Facebook

Tim Bradshaw

Mark Zuckerberg’s push to make Facebook a mobile-first company seems to have paid off. Wednesday’s fourth-quarter earnings revealed that it now makes more than half of its advertising revenues from mobile devices, beating Wall Street’s forecasts and sending its stock up as much as 12 per cent in after-hours trading.
Hannah Kuchler and Tim Bradshaw reported from the earnings call as Zuck and his team talked about the opportunities in personalisation, messaging and artificial intelligence. 

Here’s a much-anticipated feature from Facebook that marketers may love, if not its users.

The online social network has just announced it is beginning to test a video format for advertisers, where videos will begin playing as users scroll down to them in their news feeds. Clicking on them will turn on the sound. 

Every six months Mediacom, the media buying agency, surveys 1,000 kids in the UK and asks the name of their favourite website. The big story over recent years has been the decline of Facebook.

In 2010 nearly half of kids (aged 8-16) said it was their favourite site – now that number is just one in six. The top performer is YouTube, which is quoted as the favourite of more kids than Facebook and Twitter combined (see graph below).

That’s interesting for a couple of reasons. 

Mark Zuckerberg accused the US government of bad PR, saying it failed to communicate the balance of security and economic interests behind its internet surveillance efforts – in turn creating a massive PR problem for Facebook.

“I think the government blew it,” he said at the TechCrunch Disrupt conference in San Francisco on Wednesday. “It’s my job and our job to protect everyone who uses Facebook and the information they share with us. It’s our government’s job to protect all of us and also to protect our freedoms and protect the economy and companies. And I think they did a bad job of balancing those things.” 

Federal judges evaluated the privacy and free speech implications of a California law that would create a database of online identities for sex offenders, noting the shift in public sentiment around such data collection since voters passed the law last November and today, as revelations about the US’s monitoring of online communications continue to emerge.

“We’re living in a post-Snowden world,” said Judge Jay Bybee of the Ninth Circuit Court of Appeals on Tuesday, referencing the surveillance practices revealed by former CIA contractor Edward Snowden and questioning whether a database of email addresses and online identities intended to help solve sex crimes could be used to monitor people’s political speech.

Mr Bybee was one of three judges hearing oral arguments in a case about Proposition 35, the California law that requires convicted sex offenders to register their email addresses and user names for online news sites and social networks. The initiative was passed by a majority of voters last November, after receiving financial backing from Chris Kelly, Facebook’s chief privacy officer between 2005 and 2009. 

Facebook has agreed to pay $20m to settle a class action lawsuit, after it included users’ names and photos in paid advertisements.

Some 614,000 users who appeared in a Sponsored Story on the site without giving their consent will now receive $15 each. That’s slightly more than anticipated under an earlier proposal, partly because lawyers and activists will receive less.

For Facebook, whose market cap has just surpassed $100bn, this is hardly an Erin Brockovich moment. But it’s another reminder that there’s a fine line between social advertising – which uses your friends’ buying habits to influence your own – and anti-social advertising, which just annoys everyone. 

Facebook will report second quarter earnings on Wednesday, with Wall Street expecting $1.62bn in revenues and 14 cents earnings per share.

Analysts will be looking for signs of increased advertising spending among small businesses and in international markets, as growth from large US advertisers is believed to have levelled off. 

African-American teenagers are more likely to use Twitter than their white counterparts, according to a study out today from the Pew Research Center.

Researchers noted a significant jump in Twitter use among teens in general, but found that 39 per cent of African-American teens used the microblogging site compared to 23 per cent of white teens. 

Wall Street is anticipating another positive earnings report from Facebook after markets close on Wednesday and the social network states first quarter results.

Analysts expect to see a bump in revenues from advertising products launched last year, and hope to hear plans for future ad products, in particular, video advertising and ad plans for Facebook Home, the new super app Facebook launched for Android phones in April.

Though business in the first quarter tends to slow compared to the preceding quarter, which included the holidays and the US presidential election, analysts are expecting 36 per cent revenue growth year on year. Consensus estimates are for 13 cents in earnings per share on $1.44bn in revenue. Morgan Stanley predicts mobile advertising revenues will be $314m for the quarter, representing 25 per cent of overall advertising revenues, up from 23 per cent in the last quarter. 

“It’s free and always will be.” That’s what newcomers to Facebook are told when they sign up online. So there is some surprise that the site is now charging some UK users between 71p and £10.68 to send messages to people they don’t know.

The scheme was launched in December in the US, but the UK roll-out is a strong signal that Facebook believes it is actually a runner. Never mind the critics who called the idea “almost too ridiculous to believe”. The site already charges users to “promote” their posts among their friends and followers.