Facebook Reports Third Quarter 2021 Results
investor.fb.com
investor.fb.com
As always, FB keeps on trucking.
So thank you for the quality comments. Especially from people working in the ads industry. Which often get attacked on HN just due to its nature.
It’s amazing how supposedly rational people on HN are perfectly willing to extrapolate from their own highly biased sample just because they don’t like company X. (See also “nobody uses Windows”, “nobody in America has an Android phone”, etc.)
Yes, when they came out, they cost a LOT more than the competitors (I used Jabra). But wow, did they WORK well. It was no comparison really and was a lot of little things (just fewer bugs I think rather than features, they ALWAYS paired with my phone, pretty quickly, and had good battery life).
For a lot of consumers, they don't care about features, they just trust apple more than they would for example govt run email or govt made phones.
Shoulda bet $10m on that!
PS - Always looking for insightful people w/experience in the FB platform for a variety of portfolio cos - are you anon here or some way to get in touch?
2021-09 $28.2b revenue, $9.1b income +17%
2020-09 $21.2b revenue, $7.8b income
- ads shown to iPhone FB users smaller piece of revenue pie than Android FB users
- advertisers keep spending the same amount (or more) even though they have less info because of less tracking of Apple users to correlate with dollars spent
People keep saying FB is in trouble but it doesn't matter if it's the leaked research about emotional manipulation, or the Cambridge Analytica scandal, or extra Apple privacy features. The revenue keeps coming in and growing. Who thinks all of today's press about the recent whistleblowers will have any effect on next year's numbers?
[1] 96% of iOS users opt out of app tracking: https://www.google.com/search?q=facebook+apple+opt-in+privac...
I'm not personally a fan of FB (mostly due to the ad based business model), but today's negative press will have zero affect on them - mostly because (imo) it's bullshit. A lot of the issues FB deals with are social problems at scale. It's insane that any one company is expected to successfully moderate three billion people, they're doing the best they can with impossible constraints.
If anything unseats them it'll be a technical shift that moves things to protocols 'web3'. Zuckerberg is an extremely good CEO though so I suspect he's already planning for this potential and FB's upcoming name change and structure is probably a way to accommodate this (in addition to having Oculus be a more separate entity for VR/AR and the next platform).
Their constraints are not impossible. They've just got to realize that their algorithm to detect rule breaking doesn't work and they need to hire minimum 100,000 moderators.
https://www.theatlantic.com/ideas/archive/2021/10/facebook-p...
100,000 moderators? Perhaps our demands for censorship are what is unreasonable.
I really hope at least govt can deliver on this stuff reliably - the risk is folks will lose faith in govt rather than these big companies (google / apple / whatsapp / instagram etc).
An example would be Audius: https://www.youtube.com/watch?v=-Zh0WlrFWBg&t=567s
That interview should give you some idea, the space is very young but the tech is interesting.
Nobody's going to sympathize too much with a company that brought its woes upon itself. If you can't handle moderating three billion people, don't put yourself in the position of trying to moderate three billion people.
FB doesn’t need to shut down, they just need to give a fuck about the safety of their users and the societies in which they live.
It’s been evident to anyone who cares to look that this has not been the case.
[0] “Facebook admits site appears hardwired for misinformation, memo reveals” https://www.theguardian.com/technology/2021/oct/25/facebook-...
The whistleblower is backed by Pierre Omiydar's foundatoin, the founder of E-bay. So it could be a bit of one billionaire using his money to go after another.
The whistleblower is a nothing burger and she now works indirectly for Ebay cofounder. She is having her 15 minutes of fame and Im sure people who cheer her on will hire her in the future.
This stuff is just hard policy challenges without any easy answers. FB is generally open about that and what they're trying to do in order to reduce risk. The problem is mostly upstream.
I'm not an apologist and FB has made mistakes (Steven Levy's book Facebook: The Inside Story is a great look into a lot of the history and it's rare in that it's actually a fair account of things). Growth at all costs (Chamath's team) lead to a lot of problems in developing countries. Incentives around engagement and controversy, etc. FB has massive teams working on reducing the risks around this stuff, but it's impossible to eliminate because most of humanity believes insane contradictory things.
“Meanwhile, the poor Babel fish, by effectively removing all barriers to communication between different races and cultures, has caused more and bloodier wars than anything else in the history of creation.”
Put three billion tribal apes in one place and what do you expect? HN is the best case outcome and dang does a great job, but we're a pretty selected bunch, and even then it's difficult to pull off (and we're a smaller, focused community).
We're trapped in a local maximum largely because our computing stack sucks (imo) and everything has to be a SaaS due to the extreme complexity and cost to administer anything. I hope that Urbit succeeds and we get out of this, but I don't think this is something FB can really fix - it's not even a problem anyone should be responsible for fixing. The fact things are like this is an accident of history and hopefully an anachronism of our time.
It also doesn't help that our politicians (across the political spectrum) mostly just aren't very smart: https://www.piratewires.com/p/jack-be-nimble-jack-be-quick
Whistleblowing has multiple descriptions. Whistleblowing, in a legal protections sense, is about revealing criminal activity. But it's frequently used to talk about bringing attention to unethical behaviors as well. Or even those that just violate norms.
The origin of the phrase, after all, relates to people violating rules in sports.
"moderate"? as far as i understand they stoke the fire. Whatever cultural wars are raging on FB, Coka vs. Pepsi, liberals vs. conservatives, FB gets engagement, ie. money, from the both sides. They are like fight cage owner - they get paid either way. And their "moderation" - just like the fight cage owner they may prevent the fighters from say using knives as it would adversely affect the quality of fight - ends too soon, etc. - and thus revenue.
This is a problem that they've created at scale. In the US our closest thing to social issue moderation is probably the police (though please leave any efficacy discussion at the door) and there are 17 officers per 10k people in the US that make 67.6k/annual. Amortized per capita we expend about $114.92 for law enforcement in the real world - Facebook doesn't need a similar per-capita expenditure to keep its platform, but if you think it ends up spending more than 5 cents per user in amortized moderation costs I've got a Bridge in Brooklyn to sell you.
This social issue at scale didn't exist before Facebook - it might have naturally existed over time through the popularity of platforms like Disqus and disjointed forums. But Facebook owns the problem and nurtured it into the beast we know today. The social problems are an externality of Facebook's business model which they want nothing to do with fixing - it should be treated no differently than a paper mill polluting a river.
Feel free to file a complaint with the SEC.
This is some creative math!
They're also making money off 3 billion people. If it costs $1/month (on average) to moderate a single person, they can afford to do that and it wouldn't even cut their profits in half.
And I think $1/month is actually high for what it would actually cost. I think for $1/month you could have US-based employees do it.
You can complain that it's a high cost, but it's certainly not impossible.
>> 2021-09 $28.2b revenue, $9.1b income +17%
Let's not overlook the 5.4% inflation rate during this time period.
2) The whistle-blower stuff will have no effect at all on FBs numbers. Opinions on FB are set at this point.
I guess it depends on what you mean by "much".
YoY 3Q advertising revenue growth was:
- 2019: 28%
- 2020: 22%
- 2021: 17%
Was it going to trend downward to 17% without the iOS change? Who knows.
Facebook (and Google's) advertising platform and ability to onboard new customers is their core business model.
I urge any front end developer, UX specialist, or product designer, to closely study the workflow of https://www.facebook.com/business/ads.
The entire Facebook news feed is a side hustle.
Plot twist: You are the consumer, and ads are the product. Most of the data they got on you is garbage, and the algorithms they run on it have an unfalsifiable claim of usefulness.
Historically, advertising spend has been ~constant as % of GDP. It will keep being so even if they have to go back to billboards. At this point the game is how to dazzle advertisers with dashboards and graphs.
Metaverse came up as well, of course, and I still don't think anyone knows what that actually means.
>Starting with our results for the fourth quarter of 2021, we plan to break out Facebook Reality Labs, or FRL, as a separate reporting segment. As we have discussed, we are dedicating significant resources toward our augmented and virtual reality products and services
>We expect our investment in Facebook Reality Labs to reduce our overall operating profit in 2021 by approximately $10 billion. We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years.
Give away the hardware to high status college students and sell their attention metrics to advertisers. Very FB! Of course you need content too, but users can provide that, right?
Note that it is dual HDR LCD with miniLED backlights not OLED as described, but it is retina and foveated rendering with eye-tracking from Tobi.
Facebook reports Q3 revenue up 35% YoY to $29.0B, profit of $9.2B, up 17% YoY, DAUs up 6% to 1.93B, headcount up 20% to 68,177, and ups share buybacks by $50B
In reality, it seems that people are completely fine with Facebook.
But us FB haters don't always realize that we're also in a bubble or echo chamber when discussing it. We see nothing but negative opinions on the company and don't realize that the larger world doesn't share these thoughts.
There are so many other topics I see this applying to. Amazon work conditions; whether Apple should scan for CSAM client-side; the whole Chappelle thing.
I'm a case in point. After a decade of ignoring Instagram, I'm now a solid DAU[1]. I probably see a dozen ad impressions each day; I know I've clicked through a handful in the last month. I do what I can to compartmentalize it from the rest of my online identity, but when looking at their growth metrics, I'm one of them in the 3rd quarter.
Taking a quote from Eric Adams:
> Social media does not pick a candidate, people on Social Security pick a candidate"
However, the growth numbers are for FB, Instagram, Messenger, and WhatsApp.
11% growth is for Monthly Active People (whatever that is). Monthly Active Users (MAU) - the more common metric - grew by 6%.
It's possible that FB is actually shrinking - while Instagram, Messenger, and WhatsApp are growing. They don't provide enough data to know that.
Facebook itself? I think its dying personally.
Obviously has never heard of Crypto.
Obviously has never heard of revenue
Also, the US federal government is a shambles. They can't put together an inquiry on what lead to the seat of government being literally overrun, so I'd be incredibly surprised if they managed to take action against one of the most well funded entities on earth.