The Apple move drew a rare public rebuke from Facebook CEO
Mark Zuckerberg, who during a conference call accused Apple of favoring its own
interests and not those of users.
Facebook said its already enormous user base grew in the
fourth quarter as people stayed home during the pandemic and reported revenues
buoyed by a shift to digital advertising amid coronavirus-related economic
uncertainty.
But the company predicted uncertainty for 2021 and said its
revenue in the latter half of the year could face significant pressure. Because
revenue grew so quickly in the second half of 2020, the social network could
have trouble keeping up that pace.
“Clearly the pandemic has also continued to help Facebook’s
monthly active user growth to remain strong in many regions, including in the
U.S. and Canada, where prior to the pandemic, user gains had slowed to a
crawl," said eMarketer analyst Debra Aho Williamson. But she noted that
the number of daily users in this region declined, suggesting that people in the
U.S. and Canada are moving elsewhere — probably TikTok, which grew quickly in
2020.
In the conference call with analysts, Zuckerberg came out
swinging, saying Apple is fast becoming one of Facebook's “biggest
competitors" due in part to its dominance in messaging on the iPhone.
Apple, he said, “has every incentive” to use its own mobile platform to
interfere with how rival apps work.
Apple will soon require apps to ask users for permission to
collect data on what devices they are using and to let ads follow them around
on the internet. Facebook has been pushing back against the changes, saying
those rules could reduce what apps can earn by advertising through Facebook’s
audience network.
Of course, the Apple move also threatens Facebook's own
advertising revenue. Zuckerberg, though, focused on what he sees as Apple's
motives.
“Apple may say that they are doing this to help people, but
the moves clearly track their competitive interests," Zuckerberg said.
Apple, meanwhile, says people should be empowered to have
more control of their data. Executives have dismissed arguments from
advertisers and companies like Facebook who say the anti-tracking feature will
hurt the online ad industry.
“When invasive tracking is your business model, you tend not
to welcome transparency and customer choice,” Apple's software chief Craig
Federighi said in December.
Facebook earned $11.22 billion, or $3.88 per share, in the
October-December period, well above the $3.19 that analysts expected and up 53%
from a year earlier. Revenue grew 22% to $28.07 billion, higher than the $26.36
billion analysts were predicting, according to a poll by FactSet.
Its monthly user base grew 12% to 2.8 billion. Facebook
ended 2020 with 58,604 employees, a 30% increase from a year earlier.
While Facebook does not break out how much it makes from
Instagram, which it owns, eMarketer estimates that the app accounted for 36% of
Facebook’s total advertising revenue and nearly half of its U.S. ad revenue.
Shares of the Menlo Park, California-based company climbed
$1.23 to $273.37 in after-hours trading. The stock price rose 33% in 2020.
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