Facebook's Zuckerberg plans 'significant' spending to beat Apple, YouTube, boost security
Facebook CEO Mark Zuckerberg said the platform is planning “significant” investments in 2019 to boost cyber security and new product initiatives as it looks to address user concerns and challenge Apple and Alphabet-owned YouTube.
Zuckerberg’s comments came after Facebook reported mixed quarterly results on Tuesday, easily topping earnings expectations but falling short on quarterly revenue and active users. The company founder said the spending would occur to boost user and data protections and to build out Facebook’s video and private messaging services.
"I expect 2019 to be another year of significant investment," Zuckerberg said, acknowledging that Facebook trails YouTube in video streaming services and Apple in messaging, respectively.
Facebook CFO David Wehner said the company’s expenses could rise by as much as 50 percent in 2019. Company shares seesawed in after-hours trading as Wall Street digested quarterly results and Zuckerberg’s remarks.
The company reported third-quarter earnings per share of $1.76, more than the $1.47 expected by Wall Street firms, according to Refinitiv data. Third-quarter revenue was $13.73 billion, below a projected $13.78 billion.
The report was Facebook’s first since it disclosed a data breach that impacted roughly 30 million users. The platform had 1.49 billion daily active users and 2.27 billion monthly active users in the third quarter. Analysts expected 1.51 billion daily active users and 2.29 billion monthly active users, according to FactSet data.
"Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day," Zuckerberg said in a statement. "We're building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well."
Facebook executives warned at the start of the quarter than revenue growth would likely slow for the foreseeable future as the platform increases spending to address concerns about data privacy and “fake news.” The company has faced unprecedented scrutiny since the 2016 election, particularly after reports that a U.K.-based data firm Cambridge Analytica had misused the personal data of up to 87 million users in a separate breach.
Zuckerberg said Facebook has made improvements to data protection, user privacy and the prevention of abuse, but said the platform is "at least a year" from establishing protections "at the level we want."
Facebook said its headcount was 33,606 as of Sept. 30, marking a 45 percent increase compared to the same period one year ago. Each month, an estimated 2.6 billion people use Facebook properties, including the eponymous platform, Instagram, WhatsApp and Messenger, the company added.