Facebook’s business has remained strong but has seen growth in sales decelerate by 25% in the fourth quarter. The social media giant has struggled with one corporate predicament after another but has maintained its status as a business powerhouse. However, on the 29th of January it reported its slowest growth ever.
In the final three months of 2019 revenue increased by 25% from the previous year to $21 billion. While profits rose by 7% to $7.3 billion. Without a doubt the performance was strong but growth in revenue decelerated from 28% in the preceding quarter, making 2019 the year when they failed to report revenue growth of above 30% in any quarter.
Facebook has grown to become a giant and is increasingly struggling with substantial numbers and a decreasing rate of growth. Investors in Wall Street, who are used to Facebook’s meteoric growth, directed the stocks downwards over 7% an after-hours trading. This was “the fourth straight quarter that the social-media giant has delivered a sub-30 percent growth,” says Jesse Cohen a financial analyst at Investing.com, although he noted that business was still good.
Even with the slow pace of growth, Facebook was able to rake in more marketing dollars from the numerous advertisers who depend on its services. This is a clear indication that it has brushed off its competition and lawsuits that have afflicted it in the recent past.
“We had a strong quarter and a strong end to the year as our community and business continue to grow,” says Zuckerberg the CEO and founder of Facebook, Inc. “We remain focused in building services that help people stay connected to those they care about.”
Profits streamed in and the company inflated their expenses on research, development and security. Their fourth quarter spending was up 34% to $12 billion compared to the year earlier. They also settled a class action lawsuit paying the plaintiffs $550 million.
According to Mr. Zuckerberg the company will focus in making the platform secure ahead of the 2020 elections. Election security teams have thronged at their offices, the company is splashing out billions of dollars on this endeavor. In a conference call with shareholders he said that there were many other business opportunities for the company, including peer-to-peer payments, augmented reality and other forms of business within its apps. Facebook announced that they had 2.89 billion consumer users of its family of apps which includes WhatsApp, Messenger, Instagram and Facebook’s primary social network. This is an increase of 9% from the previous year.
“My goal for the next decade isn’t to be liked but to be understood,” remarked Zuckerberg.
Dil Bole Oberoi
