Facebook Profits Despite Facebook Papers Leak

Facebook has announced that its third quarterly financial report showed a net income growth of 17%. This covered the period between July and September 2021 and produced a net income of $9.19 billion.

Such a figure was a huge increase on the $7.85 billion reported for the same time period in 2020. The quarterly report was warmly greeted by investors with Facebook stocks closing up 1% by the end of day trading, while there were further rises in share value of 2.5% in after-hours trading.

With revenues now exceeding $29 billion, it paints a far rosier picture of the social media giant compared to some of the negative news headlines Facebook has been attracting. Given the unsavoury allegations that Facebook has profited from online hate in the recently leaked ‘Facebook Papers’, there had been expectations that the social media brand would have seen its profits slashed. But with revenues looking unharmed and rising up to an impressive 35%, there’s renewed optimism that Facebook will be able to weather the storm.

Much of Facebook’s financial success has been put down to strong advertising revenues. This comes despite Apple making significant changes to how its users are targeted by advertisers. While other tech companies such as Snap recorded sharp profit drops as a result of the iOS changes, Facebook has remained relatively unharmed.

All of which paints a stronger than expected end to a difficult year. This is coupled with the fact that Facebook is planning to launch its Reality Labs project in the final phase of 2021. This is the brand’s project that focuses on AR and VR hardware and it is expected to boost the fourth-quarter revenues to $34 billion. Plus with 2022 seeing a bid to compete with TikTok via a greater focus on its Reels video feature, it looks like Facebook is shrugging off some of the more negative publicity that it has received.

Can Facebook survive the Facebook Papers scandal?

Much of Facebook’s future success will depend on what further revelations there might be about the brand’s willingness to overlook antisocial behaviours on its platforms. The social media firm has been the center of controversy due to a whistleblower document dump that alleged that Facebook prioritized profitability above its users’ well-being. With accusations that teenage girls were especially vulnerable and that Facebook’s algorithms encouraged hate speech, it marked a difficult week for the tech giant.

In its defence, Facebook bosses have stated that they have already spent over $13 billion on online security in the past five years, and had seen hate speech dropping by nearly half in the past nine months.

Facebook’s profits could be hit should more governments follow the likes of the UK where the current legislation could implement a fine that applies a 10% penalty on global revenues should a tech company continue to violate any legislation regarding hosting illegal or harmful content on its platforms. All of which means that plenty needs to be done if Facebook wishes to continue enjoying such strong revenues.

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