I commented after the IOS14 stuff that FB revenue would obviously go up in Q3 as it has every quarter for years, to some incredulity on HN https://news.ycombinator.com/item?id=27845536.
I find this so interesting because the ads I get on facebook are completely useless, and I've gone out of my way to edit preferences. It shows me ads for newspapers I already subscribe to, underwear for a gender I don't belong to, and electric bikes (I drive). I rarely, if ever, see an ad for something where I think "oh, huh, I want to buy that".
PS - Always looking for insightful people w/experience in the FB platform for a variety of portfolio cos - are you anon here or some way to get in touch?
It’s amazing how supposedly rational people on HN are perfectly willing to extrapolate from their own highly biased sample just because they don’t like company X. (See also “nobody uses Windows”, “nobody in America has an Android phone”, etc.)
Interesting that Apple in April rolled out privacy prompts[1] that Facebook complained about (and tried to persuade public opinion with a full-page ad in December 2020) ... and yet it didn't seem to slow down Facebook's numbers by much:
2021-09 $28.2b revenue, $9.1b income +17%
2020-09 $21.2b revenue, $7.8b income
Possibilities:
- ads shown to iPhone FB users smaller piece of revenue pie than Android FB users
- advertisers keep spending the same amount (or more) even though they have less info because of less tracking of Apple users to correlate with dollars spent
People keep saying FB is in trouble but it doesn't matter if it's the leaked research about emotional manipulation, or the Cambridge Analytica scandal, or extra Apple privacy features. The revenue keeps coming in and growing. Who thinks all of today's press about the recent whistleblowers will have any effect on next year's numbers?
FB is the least likely to be hurt by Apple's move since they have their own massive number of users across multiple properties and lots of tracking on the web. If anything they might benefit by smaller players that have less access getting hurt more by Apple.
I'm not personally a fan of FB (mostly due to the ad based business model), but today's negative press will have zero affect on them - mostly because (imo) it's bullshit. A lot of the issues FB deals with are social problems at scale. It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
If anything unseats them it'll be a technical shift that moves things to protocols 'web3'. Zuckerberg is an extremely good CEO though so I suspect he's already planning for this potential and FB's upcoming name change and structure is probably a way to accommodate this (in addition to having Oculus be a more separate entity for VR/AR and the next platform).
It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
Nobody's going to sympathize too much with a company that brought its woes upon itself. If you can't handle moderating three billion people, don't put yourself in the position of trying to moderate three billion people.
> A lot of the issues FB deals with are social problems at scale. It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
This is a problem that they've created at scale. In the US our closest thing to social issue moderation is probably the police (though please leave any efficacy discussion at the door) and there are 17 officers per 10k people in the US that make 67.6k/annual. Amortized per capita we expend about $114.92 for law enforcement in the real world - Facebook doesn't need a similar per-capita expenditure to keep its platform, but if you think it ends up spending more than 5 cents per user in amortized moderation costs I've got a Bridge in Brooklyn to sell you.
This social issue at scale didn't exist before Facebook - it might have naturally existed over time through the popularity of platforms like Disqus and disjointed forums. But Facebook owns the problem and nurtured it into the beast we know today. The social problems are an externality of Facebook's business model which they want nothing to do with fixing - it should be treated no differently than a paper mill polluting a river.
> It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
They're also making money off 3 billion people. If it costs $1/month (on average) to moderate a single person, they can afford to do that and it wouldn't even cut their profits in half.
And I think $1/month is actually high for what it would actually cost. I think for $1/month you could have US-based employees do it.
You can complain that it's a high cost, but it's certainly not impossible.
Exactly humanity is on Facebook and there are different subsets of humanity who think differently (it would be a lame world if we all thought like each other .. who'd we argue and debate with and more). Facebook needs to and always remain a neutral party where there isnt physical danger occurring or happening.
The whistleblower is backed by Pierre Omiydar's foundatoin, the founder of E-bay. So it could be a bit of one billionaire using his money to go after another.
The whistleblower is a nothing burger and she now works indirectly for Ebay cofounder. She is having her 15 minutes of fame and Im sure people who cheer her on will hire her in the future.
>It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
"moderate"? as far as i understand they stoke the fire. Whatever cultural wars are raging on FB, Coka vs. Pepsi, liberals vs. conservatives, FB gets engagement, ie. money, from the both sides. They are like fight cage owner - they get paid either way. And their "moderation" - just like the fight cage owner they may prevent the fighters from say using knives as it would adversely affect the quality of fight - ends too soon, etc. - and thus revenue.
I don't think giving some people special privileges that allows them to post revenge porn which ruins people's lives is the best they can do. I don't think allowing ads that they know are contributing to sex slavery is the best they can do. I definitely don't think allowing governments to organize genocide on their platform is the best they can do.
Their constraints are not impossible. They've just got to realize that their algorithm to detect rule breaking doesn't work and they need to hire minimum 100,000 moderators.
> advertisers keep spending the same amount (or more) even though they have less info because of less tracking of Apple users to correlate with dollars spent
Plot twist: You are the consumer, and ads are the product. Most of the data they got on you is garbage, and the algorithms they run on it have an unfalsifiable claim of usefulness.
Historically, advertising spend has been ~constant as % of GDP. It will keep being so even if they have to go back to billboards. At this point the game is how to dazzle advertisers with dashboards and graphs.
Their investor call was a lot more interesting than the numbers themselves. Facebook all but confirmed TikTok as an existential threat, and is spending billions over the next few years to retool their product line to focus on "young adults".
Metaverse came up as well, of course, and I still don't think anyone knows what that actually means.
It means straight up Snowcrash. They are burning 10 billion a year on Oculus and related VR/AR bets. Metaverse/Horizons will be a social platform for VR and AR with a heavy focus on face to face socializing.
>Starting with our results for the fourth quarter of 2021, we plan to break out Facebook Reality Labs, or FRL, as a separate reporting segment. As we have discussed, we are dedicating significant resources toward our augmented and virtual reality products and services
>We expect our investment in Facebook Reality Labs to reduce our overall operating profit in 2021 by approximately $10 billion. We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years.
Whilst I despise Facebook, I thought Zuckerberg was extremely savvy in picking up WhatsApp and Instagram (which I didn’t see coming), and also pursuing VR (which I absolutely did). But there’s a big difference between acquiring near-winners and building something entirely new. Perhaps I’m just being hopeful, but it seems unlikely to me that Facebook is an organisation that could construct something entirely new and execute it well. They’ll have lots of competition and buying it out will probably not be an option, given the intense scrutiny they’ve attracted. So I wouldn’t bet on Facebook to own the next generation of social platforms.
Market agrees. You get better returns just buying the S&P500 over FB shares. Hence their 50 billion stock buyback to slow down the falling share price.
I feel like "network effects" in the metaverse will be compounded cubic: the nodes, the edges, then the third mysterious component emerging from the shared hallucination itself ;)
I suspect the upcoming HW need of XR metaverse is in the foveal rendering required for low latency retina resolution immersive HMD. For cost/weight/power that probably means eye-tracking, which is gold standard for ad tracking and marketing attention metrics.
Give away the hardware to high status college students and sell their attention metrics to advertisers. Very FB! Of course you need content too, but users can provide that, right?
Facebook reports Q3 revenue up 35% YoY to $29.0B, profit of $9.2B, up 17% YoY, DAUs up 6% to 1.93B, headcount up 20% to 68,177, and ups share buybacks by $50B
Probably creative accounting. Nobody really knows what their "users" actually mean anymore. There's no way to really grow users from their particular baseline.
Readit News
As always, FB keeps on trucking.
So thank you for the quality comments. Especially from people working in the ads industry. Which often get attacked on HN just due to its nature.
Shoulda bet $10m on that!
PS - Always looking for insightful people w/experience in the FB platform for a variety of portfolio cos - are you anon here or some way to get in touch?
It’s amazing how supposedly rational people on HN are perfectly willing to extrapolate from their own highly biased sample just because they don’t like company X. (See also “nobody uses Windows”, “nobody in America has an Android phone”, etc.)
- ads shown to iPhone FB users smaller piece of revenue pie than Android FB users
- advertisers keep spending the same amount (or more) even though they have less info because of less tracking of Apple users to correlate with dollars spent
People keep saying FB is in trouble but it doesn't matter if it's the leaked research about emotional manipulation, or the Cambridge Analytica scandal, or extra Apple privacy features. The revenue keeps coming in and growing. Who thinks all of today's press about the recent whistleblowers will have any effect on next year's numbers?
[1] 96% of iOS users opt out of app tracking: https://www.google.com/search?q=facebook+apple+opt-in+privac...
I'm not personally a fan of FB (mostly due to the ad based business model), but today's negative press will have zero affect on them - mostly because (imo) it's bullshit. A lot of the issues FB deals with are social problems at scale. It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
If anything unseats them it'll be a technical shift that moves things to protocols 'web3'. Zuckerberg is an extremely good CEO though so I suspect he's already planning for this potential and FB's upcoming name change and structure is probably a way to accommodate this (in addition to having Oculus be a more separate entity for VR/AR and the next platform).
Nobody's going to sympathize too much with a company that brought its woes upon itself. If you can't handle moderating three billion people, don't put yourself in the position of trying to moderate three billion people.
This is a problem that they've created at scale. In the US our closest thing to social issue moderation is probably the police (though please leave any efficacy discussion at the door) and there are 17 officers per 10k people in the US that make 67.6k/annual. Amortized per capita we expend about $114.92 for law enforcement in the real world - Facebook doesn't need a similar per-capita expenditure to keep its platform, but if you think it ends up spending more than 5 cents per user in amortized moderation costs I've got a Bridge in Brooklyn to sell you.
This social issue at scale didn't exist before Facebook - it might have naturally existed over time through the popularity of platforms like Disqus and disjointed forums. But Facebook owns the problem and nurtured it into the beast we know today. The social problems are an externality of Facebook's business model which they want nothing to do with fixing - it should be treated no differently than a paper mill polluting a river.
They're also making money off 3 billion people. If it costs $1/month (on average) to moderate a single person, they can afford to do that and it wouldn't even cut their profits in half.
And I think $1/month is actually high for what it would actually cost. I think for $1/month you could have US-based employees do it.
You can complain that it's a high cost, but it's certainly not impossible.
The whistleblower is backed by Pierre Omiydar's foundatoin, the founder of E-bay. So it could be a bit of one billionaire using his money to go after another.
The whistleblower is a nothing burger and she now works indirectly for Ebay cofounder. She is having her 15 minutes of fame and Im sure people who cheer her on will hire her in the future.
"moderate"? as far as i understand they stoke the fire. Whatever cultural wars are raging on FB, Coka vs. Pepsi, liberals vs. conservatives, FB gets engagement, ie. money, from the both sides. They are like fight cage owner - they get paid either way. And their "moderation" - just like the fight cage owner they may prevent the fighters from say using knives as it would adversely affect the quality of fight - ends too soon, etc. - and thus revenue.
Their constraints are not impossible. They've just got to realize that their algorithm to detect rule breaking doesn't work and they need to hire minimum 100,000 moderators.
I guess it depends on what you mean by "much".
YoY 3Q advertising revenue growth was:
- 2019: 28%
- 2020: 22%
- 2021: 17%
Was it going to trend downward to 17% without the iOS change? Who knows.
2) The whistle-blower stuff will have no effect at all on FBs numbers. Opinions on FB are set at this point.
Facebook (and Google's) advertising platform and ability to onboard new customers is their core business model.
I urge any front end developer, UX specialist, or product designer, to closely study the workflow of https://www.facebook.com/business/ads.
The entire Facebook news feed is a side hustle.
Plot twist: You are the consumer, and ads are the product. Most of the data they got on you is garbage, and the algorithms they run on it have an unfalsifiable claim of usefulness.
Historically, advertising spend has been ~constant as % of GDP. It will keep being so even if they have to go back to billboards. At this point the game is how to dazzle advertisers with dashboards and graphs.
>> 2021-09 $28.2b revenue, $9.1b income +17%
Let's not overlook the 5.4% inflation rate during this time period.
Metaverse came up as well, of course, and I still don't think anyone knows what that actually means.
>Starting with our results for the fourth quarter of 2021, we plan to break out Facebook Reality Labs, or FRL, as a separate reporting segment. As we have discussed, we are dedicating significant resources toward our augmented and virtual reality products and services
>We expect our investment in Facebook Reality Labs to reduce our overall operating profit in 2021 by approximately $10 billion. We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years.
Give away the hardware to high status college students and sell their attention metrics to advertisers. Very FB! Of course you need content too, but users can provide that, right?
Facebook reports Q3 revenue up 35% YoY to $29.0B, profit of $9.2B, up 17% YoY, DAUs up 6% to 1.93B, headcount up 20% to 68,177, and ups share buybacks by $50B
However, the growth numbers are for FB, Instagram, Messenger, and WhatsApp.
11% growth is for Monthly Active People (whatever that is). Monthly Active Users (MAU) - the more common metric - grew by 6%.
It's possible that FB is actually shrinking - while Instagram, Messenger, and WhatsApp are growing. They don't provide enough data to know that.
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