Facebook Escapes Recent Data Privacy Scandals with Big Profit Gain

Facebook's quarterly financial results appeared to show no impact from a controversy over the hijacking of personal data of millions of users of the social network

Facebook Escapes Recent Data Privacy Scandals with Big Profit Gain

By Pachter's estimation, global sequential monthly active users (MAU) growth hit roughly 59 million to 2.16 billion in the first quarter, with global sequential daily active user (DAU) growth potentially reaching 43 million to 1.44 billion.

The Cambridge Analytica scandal, affecting up to 87 million users, generated calls for regulation and for users to leave the social network, but there was no sign that advertisers cared. Investors reacted to the news by sending Facebook's stock up close to 5 percent in after-hours trading.

"Despite facing important challenges, our community and business are off to a strong start in 2018", said Mark Zuckerberg, Facebook's founder and CEO, in a statement.

A Facebook spokesperson said the company believes it is important that its chief privacy officer spend more time focusing on privacy as attention on the topic increases.

Zuckerberg said that changes the company had made to the news feed to prioritise "meaningful interaction" rather than "passive consumption" were already having an effect - with a decline in people passively watching video.

"We are proud of the ad model we've built", she said.

Facebook reported revenue of $11.97 billion, beating analysts' forecast of $11.4 billion.

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"Everybody keeps talking about how bad things are for Facebook, but this earnings report to me is very positive, and reiterates that Facebook is fine, and they'll get through this", said Daniel Morgan, senior portfolio manager at Synovus Trust Company.

The company said it was increasing the amount of money authorized to repurchase shares by an additional $9 billion. It's estimated that Facebook's net income increased to approximately $1.38 a share.

Without mentioning Cambridge Analytica by name, Facebook executives alluded to its recent privacy scandal in general terms. The data debacle came to light late in the quarter, meaning the impact may be felt more in the quarters to come. In addition, Goldman tried to suggest that if anything Facebook was a service and advertisers the product as there were the ones spending money.

The stock, which has taken a knock over the past month or so in the wake of data privacy concerns, jumped 4.6% after the bell to US$167.10.

The MeitY had earlier questioned both the companies on the impact of the data breach, following which Facebook had admitted that almost 5.62 lakh people in India were "potentially affected" by the incident.

Facebook has apologized to those whose data was misused, and says it's restricting app developers' access to people's information.

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