Facebook's Zuckerberg warns of 'tough year' ahead amid political ad controversy
'I expect that this is going to be a very tough year,' Zuckerberg says.
Sun Microsystems co-founder Scott McNealy comments on Facebook CEO Mark Zuckerberg’s testimony in front of Congress.
Although Facebook's profit emerged mostly unscathed from a slew of controversies this year, CEO Mark Zuckerberg warned that political pressure from lawmakers on Capitol Hill could begin to take a toll on the social media behemoth next year.
"I expect that this is going to be a very tough year," Zuckerberg said during a conference call with investors on Wednesday.
The call began less than an hour after Twitter CEO Jack Dorsey announced his company is banning all political ads from its platform ahead of the 2020 election, a not-so-subtle dig at Facebook, which has continued to weather criticism for its decision to not fact check those ads.
Zuckerberg briefly praised the company's financial achievements — in the third quarter, Facebook said that it earned $6.09 billion, or $2.12 per share, a 19 percent jump from the year-ago period — before launching into a monologue extolling free expression and principles.
Facebook CEO Mark Zuckerberg testifies on Capitol Hill in Washington, Wednesday, Oct. 23, 2019. (AP Photo/Andrew Harnik)
FACEBOOK EMPLOYEES SIGN LETTER OPPOSING POLITICAL ADS POLICY
"I've considered whether we should not carry these ads in the past, and I'll continue to do so," he said. "On balance, so far, I've thought that we should continue."
The 34-year-old billionaire defended Facebook's controversial decision to not fact-check advertisements from politicians, giving them almost total control of the content they post online. Zuckerberg insisted that from a business perspective, the controversy far outweighs the "very small percent of our business" accounted for by political ads. He estimated that in 2020, politicians will be less than 0.5 percent of the company’s revenue.
Stocks In This Article:
Because political ads are such a small portion of Facebook’s overall revenue, whether or not the company decides to pull them would ultimately have little impact on its bottom line, according to Justin Post, a Bank of America analyst.
"A key takeaway for Facebook, and Twitter, is that political ads are not a revenue driver, expected to contribute less than 0.5 percent of total ad revenue in 2020," Post said. "So if FB does pull the plug on political ads, [expect] a very modest impact."
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Even as Facebook grappled with rising regulatory threats, its revenue still grew by 29 percent to $17.65 billion, beating analysts' expectations. It ended the July to September period with 2.45 billion monthly users, an 8 percent increase from last year.
Zuckerberg also said that critics have mistaken Facebook's motivations as an attempt to appease conservatives. In July, Zuckerberg began hosting informal talks and small, off-the-record dinners with conservatives journalists, commentators and at least one Republican lawmaker, Politico reported.
"Frankly, if our goal were trying to make either side happy, then we're not doing a very good job because I'm pretty sure everyone is frustrated with us. Our values on voice and free expression are not partisan," he said.