Facebook Usage Soars, But Not Advertising. “We’re just trying to keep the lights on over here,” By Todd Horwitz, Bubba Trading

 

 

As the coronavirus spread around the world and people everywhere were ordered to stay home, phone calls over Facebook’s apps more than doubled. In many countries, messaging on Instagram and Facebook soared by over 50 percent, while group calls in Italy jumped by more than 1,000 percent. And hungry for information, people clicked repeatedly on viral news stories shown by the social network.

Inside Facebook, that meant the pressure was on. “We’re just trying to keep the lights on over here,” Mark Zuckerberg, Facebook’s chief executive, said in an interview last week. As airlines, hotels, restaurants and other companies struggle to stay afloat during the pandemic, Facebook is also laboring to cope with the fallout. But unlike those other businesses, the Silicon Valley giant is being strained by the coronavirus in a different way: Its usage is going through the roof.

Skyrocketing traffic and a crush of new users are now stressing Facebook’s systems just as its 45,000 employees are dealing with working remotely for the first time. The company is also trying to keep its users’ data secure while employees who sift through posts to moderate content do so from home. At the same time, Facebook has added to its workload by promising to do more to limit virus misinformation.

The company said the higher usage wouldn’t protect it from expected declines in digital advertising across the globe. “We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19,” wrote Alex Schultz, Facebook’s vice president of analytics, and Jay Parikh, vice president of engineering.

The company didn’t provide official earnings guidance, but the executives said “our business is being adversely affected like so many others around the world.” Facebook detailed steps the company is taking to increase capacity and reduce the strain that heightened video-calling and calling traffic puts on communications structure. The announcement is in keeping with others by advertising-based tech platforms and media of reduced financial targets.

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Todd “Bubba” Horwitz
BubbaTrading.com

Financial Markets and Political Commentary

 

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.