Facebook profit soars, unaffected by Russia ad issue

Examples of Facebook pages are seen, as executives appear before the House Intelligence Committee on November 1 to answer questions related to Russian use of social media to influence US elections, on Capitol Hill in Washington. (Reuters)
Updated 02 November 2017
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Facebook profit soars, unaffected by Russia ad issue

BENGALURU: Facebook reported better-than-expected quarterly profit and revenue on Wednesday as it pushed further into video advertising, showing no sign of financial damage from the controversy over how Russia used the social network in an attempt to sway voters in the 2016 US election.
The company’s shares, which hit a record earlier in the day, initially rose in after-hours trading, but later fell into negative territory. They have gained almost 60 percent this year.
Chief Executive Mark Zuckerberg condemned Russia’s attempts to influence last year’s election through Facebook posts designed to sow division, and repeated his pledge to ramp up spending significantly to increase the social network’s security, something he said on Wednesday would affect profits.
“What they did is wrong, and we are not going to stand for it,” Zuckerberg said of the Russians, on a conference call with analysts.
Facebook is at the center of a political storm in the US for the ways it handles paid political ads and allows the spread of false news stories. US lawmakers have threatened tougher regulation and fired questions at Facebook General Counsel Colin Stretch in hearings this week.
Facebook, in a series of disclosures over two months, has said that people in Russia bought at least 3,000 US political ads and published another 80,000 Facebook posts that were seen by as many as 126 million Americans over two years. Russia denies any meddling.
Facebook’s total advertising revenue rose 49 percent in the third quarter to $10.14 billion, about 88 percent of which came from mobile ads.
Analysts on average had expected total ad revenue of $9.71 billion, according to data and analytics firm FactSet.
Facebook in the third quarter gave advertisers for the first time the ability to run ads in standalone videos, outside the Facebook News Feed, and the company is seeing good early results, Chief Operating Officer Sheryl Sandberg told analysts on a conference call.
“Video is exploding, and mobile video advertising is a big opportunity,” Sandberg said.
More than 70 percent of ad breaks up to 15 seconds long were viewed to completion, most with the sound on, she said.
The 49 percent increase in total ad sales in the latest quarter compares with a 47 percent rise in the prior quarter and a 51 percent jump in the first quarter.
Facebook has been warning for more than a year about reaching a limit in “ad load,” or the number of ads the company can feature in users’ pages before crowding their News Feed.
Advertisers seem unfazed, though, spending heavily as the social network continues to attract users.
The nearly 50 percent jump in ad revenue “is phenomenal, especially when for the past few quarters they’ve been trying to bring that expectation way, way down. Yet it keeps going up,” Tigress Financial Partners analyst Ivan Feinseth said.
Of the Russia scandal enveloping Facebook publicly, Feinseth said: “In the bigger picture, I don’t think it’s a really big factor.”
The company’s performance was strong in comparison with smaller social media firms Snap Inc. and Twitter Inc. , Wedbush analyst Michael Pachter said.
“Facebook grew revenues by $3.3 billion year-over-year for the quarter. This is more than Twitter and Snapchat generate combined for the full year,” he said.
Facebook said about 2.07 billion people were using its service monthly as of Sept. 30, up 16 percent from a year earlier.
Analysts on average had expected 2.06 billion monthly active users, according to FactSet.
Net income rose to $4.71 billion, or $1.59 per share, from $2.63 billion, or 90 cents per share.
Analysts on an average were expecting the company to earn $1.28, according to Thomson Reuters.
Total revenue increased 47.3 percent to $10.33 billion beating analysts estimate of $9.84 billion, according to Thomson Reuters.
Various US investigations into how Russia may have tried to sway American voters in the months before and after last year’s elections are hanging over Facebook and its competitors.
There is also proposed US legislation that would extend rules governing political ads on television, radio and satellite to also cover digital advertising.
“We expect more scrutiny about Facebook’s ad system ahead,” analyst Debra Aho Williamson of research firm eMarketer said in a note. “We’re also monitoring for any signs that this investigation will have a material impact on ad revenue.”


Twitter warns global users their tweets violate Pakistani law

Updated 33 min 44 sec ago
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Twitter warns global users their tweets violate Pakistani law

  • Pakistan has previously threatened to block Twitter if the company did not remove content its government found offensive
  • Pakistan banned Facebook for hosting allegedly blasphemous content for two weeks in 2010 while YouTube was unavailable from 2012 to 2016 over an amateur film about the Prophet Muhammad that led to global riots

WASHINGTON: When Canadian columnist Anthony Furey received an email said to be from Twitter’s legal team telling him he may have broken a slew of Pakistani laws, his first instinct was to dismiss it as spam.
But after Googling the relevant sections of Pakistan’s penal code, the Toronto Sun op-ed editor was startled to learn he stood accused of insulting the Prophet Muhammad — a crime punishable by death in the Islamic republic — and Twitter later confirmed the correspondence was genuine.
His perceived offense was to post cartoons of the prophet several years ago.
Furey and two prominent critics of extremism in Islam say they are “shocked” to have received notices by the social media giant this past week over alleged violations of Islamabad’s laws, despite having no apparent connection to the South Asian country.
They say the notices amount to an effort to stifle their voices — a charge Twitter denies, arguing the notices came about as a result of “valid requests from an authorized entity,” understood to mean Pakistan, helped users “to take measures to protect their interests,” and the process is not unique to any one country.
But Furey is the third prominent user in the space of days to publicly complain about receiving a message linked to Pakistan.
The other two are Saudi-Canadian activist Ensaf Haidar and Imam Mohammad Tawhidi, a progressive Muslim scholar from Australia who was born in Iran.
Both are outspoken critics of religious extremism and have accused the social media giant of helping to silence progressive ideas within Islam.
Furey, who detailed his experience in a column for his newspaper on Saturday, told AFP: “I’m somewhat alarmed that Twitter would even allow a country to make a complaint like this, as it almost validates their absurd blasphemy laws.”
The tweet in question was a collage of cartoons of Mohammad that he posted four years ago.
“Looking back, I remember I did it right after there had been an Daesh-inspired attack in retaliation over the cartoons,” Furey wrote in his column, adding he had not posted similar material before or since.
Tawhidi meanwhile was sent a similar notice flagging a tweet that called on Australian police to investigate extremism in mosques following a deadly knife attack in Melbourne in November.
The scholar attached the legal notice sent to him by Twitter informing him of possible violations of Pakistani law, and tweeted: “I am not from Pakistan nor am I a Pakistani citizen.
“Pakistan has no authority over what I say. Get out of here.”
Reached for comment, a spokesperson for Twitter told AFP: “In our continuing effort to make our services available to people everywhere, if we receive a valid requests from an authorized entity, it may be necessary to withhold access to certain content in a particular country from time to time.”
The spokesperson added: “We notify users so that they have the opportunity to review the legal request, and the option to take measures to protect their interests.”
Pakistan has previously threatened to block Twitter if the company did not remove content its government found offensive.
It banned Facebook for hosting allegedly blasphemous content for two weeks in 2010 while YouTube was unavailable from 2012 to 2016 over an amateur film about the Prophet Muhammad that led to global riots.
Furey told AFP that although he was taken aback by the notice, “I’m at least glad they brought it to my attention that the Pakistan government has their eye on me.”
But he added: “One troubling consequence to all of this is that even people in countries without these blasphemy laws may start to self-censor for fear of the reach foreign governments will have over them in the online world.”