Profits up at Facebook, no impact from privacy scandal

Facebook reported a sharp increase in profits in the first quarter of 2018. (AP)
Updated 26 April 2018
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Profits up at Facebook, no impact from privacy scandal

  • Profit in the first quarter of 2018 leapt 63 percent
  • Facebook said another measure, daily active users, was up in all regions including the US and Europe.

SAN FRANCISCO: Facebook on Wednesday reported a sharp jump in profits in the past quarter, with gains in its user base and strong ad growth as the social network appeared to see no impact from a controversy over privacy.
Profit in the first quarter of 2018 leapt 63 percent from a year ago to $5 billion, and total revenues increased 49 percent to $11.97 billion, Facebook said in an earnings update which topped most analyst forecasts.
Facebook chief executive Mark Zuckerberg, who has spent most of the past month on the fallout from the revelations on the hijacking of personal data by a political firm, sought to reassure investors about the company’s future despite the privacy row which has sparked investigations on both sides of the Atlantic.
“Despite facing important challenges, our community and business are off to a strong start in 2018,” Zuckerberg said.
“We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together.”
Facebook shares climbed more than 6.9 percent to $170.75 in after-hours trades that followed release of the earnings figures.
The report showed the number of people using Facebook monthly rose 13 percent from last year to 2.2 billion as of the end of March, despite concerns that users would abandon the network following the misuse of data by Cambridge Analytica.
Facebook said another measure, daily active users, was up in all regions including the US and Europe.
“At first look, we would characterize (these) results as a relief and as a sign that so far the damage from Cambridge appears contained although this will be a long three to six months ahead to steer through this storm,” GHB Insights analyst Daniel Ives said in a research note.
Baird senior research analyst Colin Sebastian said in a note to investors that “at first glance, impact from data/privacy issues appears minimal.”
Zuckerberg faced questioning in two congressional panels earlier this month about revelations that personal data on 87 million users was harvested by Cambridge Analytica, a consultancy working for Donald Trump’s 2016 campaign.
“It was an important moment for the company to hear the feedback and show what we are doing,” Zuckerberg responded when asked about the hearings during an earnings call.
“Now, the important thing is to make sure we execute on all the things we need to do to keep people safe.”
Although the impact of the scandal, which broke in mid-March, was unlikely to be reflected in the first quarter, the early signs suggested users and advertisers would remain.
“Facebook is so large that it would take a lot of user defections to make a difference,” eMarketer principal analyst Debra Aho Williamson said in a recent report.
But Williamson said some of Facebook’s momentum was already fading due to other factors such as disinformation, social media fatigue and new platforms attracting young people.
“Facebook has already essentially maxed out its penetration in the US,” she said.
Facebook also announced Wednesday that its board of directors had authorized the buyback of an additional $9 billion worth of shares, raising its repurchase plan to $15 billion.
Facebook faces a specter of regulation at home and abroad.
US senators introduced legislation Tuesday aimed at better protecting online privacy in response to the Facebook data scandal.
Facebook announced last week it would begin rolling out changes to how it handles private data to comply with forthcoming EU rules.
The European Parliament last week demanded Zuckerberg appear in person to answer questions about the Cambridge Analytica scandal, rejecting his offer to send a more junior executive in his place.
The EU in May is introducing tough new General Data Protection Regulation rules, which Facebook has said it will apply to its platform globally.
Facebook chief financial officer David Wehner said use of the social network might ebb slightly in Europe due to GDPR, but executives were confident its ad business was on firm footing since the rules affect its competitors as well.
“We believe we can continue to build a great ads business while protecting the privacy of people who use Facebook,” Wehner said.
Pivotal senior analyst Brian Wieser noted that there are broader concerns at Facebook including rising expenses and regulation.
“There are still many risks ahead around digital advertising spending in Europe,” Wieser said in a note to investors.
“Further, it remains to be seen whether or not the way in which attempts by Facebook (and everyone who sells digital advertising) to adhere to GDPR will withstand regulatory scrutiny and avoid significant related fines in Europe.”


UAE to loosen visa rules for investors and innovators

Updated 21 May 2018
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UAE to loosen visa rules for investors and innovators

  • UAE cabinet announces the launch of an integrated visa system to attract talent and talent in all vital sectors of the national economy
  • The Council also announced changes in the system of foreign ownership of companies in the country, which allows the acquisition of 100% of the global investors by the end of the year

DUBAI: The United Arab Emirates, home to financial hubs Abu Dhabi and Dubai, is loosening its residency laws and will grant long-term visas for up to 10 years to investors and highly-skilled professionals.
The 10-year residency visas will be granted to specialists in science, medicine and research, and to “exceptional students.” The state-run WAM news agency says the plan aims to attract global investment and innovators.
The UAE Cabinet approved the new rules on Sunday, saying plans are also on track to allow foreign investors 100 percent ownership of their UAE-based companies this year.
His Highness Sheikh Mohammed bin Rashid Al Maktoum affirmed that the UAE will remain a global incubator for exceptional talents and a permanent destination for international investors. “The UAE has been open, governed by tolerance and contributed to by all who live on its land.
“Our open environment, tolerant values, infrastructure and flexible legislation offer the best opportunities to attract international investment and exceptional talent in the UAE,” he said. “Our country is the land of opportunity, the best environment for realizing human dreams and unleashing their extraordinary potentials.”
The new regulations include raising the percentage of global investors’ ownership in companies to 100% by the end of the current year. He directed the Ministry of Economy in coordination with the concerned parties to implement the decision and follow up on its developments and submit a detailed study in the third quarter of this year.
The new regulations approved by the Council of Ministers and the authorities concerned have also set the procedures for implementing them to grant investors residence visas of up to ten years for them and all members of their families, as well as granting residency visas of up to ten years for specialized competencies in the medical, scientific, research and technical fields.
The new regulations also include visas for students studying in the country for five years and a 10-year residency for exceptional students.
Under current laws, foreign companies must have an Emirati owning 51 percent of the shares, unless the company operates in a free zone. Major brands Apple and Tesla are believed to be exceptions to the rule.