Facebook’s monthly and daily active users both increased by 8% to 2.41 billion and 1.59 billion respectively in Q2 2019. Revenue increased 28% year-on-year to $16.6 billion this quarter. Mobile ads made up 94% of the company’s ad revenue. 2.1 billion people and 2.7 billion people use one of its services — Facebook, Instagram, WhatsApp, or Messenger — every day and every month respectively. Talking about privacy issues in a call with investors, Zuckerberg reiterated the need for a regulatory framework, saying that “my broader concern is that if that doesn’t get put in place, then frustration with the industry I think will continue to grow”. He says regulation can be a mix of laws passed, structural rules imposed like with this FTC settlement, self regulation (like around content and speech in the United States).
Zuckerberg said that regulatory approval was causing the delay in launch of WhatsApp Payments in India. “The test went better than we even expected” for a product which needs high network effects to be a success. Zuckerberg did not respond to what lessons the company learnt from the beta test in India for other countries.
Impact of FTC fine
The FTC fine will mean process changes and compliance work, and will change how Facebook runs its business, and how quickly its products come to the market. The company has got a a new chief privacy officer, Michel Protti. Others at Facebook are going to supplement his work, and external hires will be brought in to enhance the compliance program to meet the standards of the FTC agreement. The company will said it will also add more oversight and controls over the product development process “with a lens to privacy”.
WhatsApp Stories and Ads
COO Sheryl Sandberg said Story ads are “a pretty important part of the story that’s going with on Facebook right now”. She said that Facebook is helping people and advertisers move to Stories more quickly. There’s a lot of inventory, early adopters can benefit from the prices, “So we think the mix to Stories is a big opportunity for us and advertisers over time.” She said Stories don’t monetize at the same rate at Newsfeed, but the company is optimistic about growth in the long-run.
“Political advertising is not a big, big category, though it is obviously highly seasonal and highly year dependent, so it can have some impact on revenue, in revenue growth, in region, in bigger political years,” said CFO Dave Wehner But it’s still a relatively small category. Facebook has put investment and controls in which is fairly costly process.”
Opposition to Libra
On being asked about the opposition to Libra and if that will change the timeframe of roll-out, Zuckerberg said Facebook’s approach has been to “have a very open dialogue” about this, and to outline the idea and values an eventual service should have. The company’s privacy efforts require “significant investments obviously in compliance processes, people and technical infrastructure, and those are factored into 2019 operating expense outlook”.