Facebook’s ARPU Grows Like Gangbusters And Its Stock Soars Despite the Scandals

Facebook is getting beaten up by a punishing news cycle – but, for its part, it’s beating the street.

The stock surged more than 17% in after-hours trading on Wednesday.

Revenue for the fourth quarter clocked in at $16.91 billion, a 30.4% year-over-year (YoY) increase. Nearly all of that – $16.64 billion – was thanks to advertising.

Not bad for the poster child of privacy scandals and the newly anointed king of questionable business practices.

Regulators all over the world now have their gimlet eyes trained on Facebook after news broke of its plan to merge the backend infrastructure of its messaging apps into one code base. And

TechCrunch reported on Tuesday that Facebook has ran a “research program” since 2016 that employs a VPN app to collect phone and web activity on users as young as 13 in exchange for $20 a month.

And that’s just in the last week.

But scandals be damned, it seems. Average revenue per user (ARPU) in the United States and Canada grew to $34.86 in Q4 2018 from $26.76 at year ago.

The #DeleteFacebook movement aside, daily and monthly active users both increased 9% over last year to 1.52 billion and 2.32 billion, respectively.

“We’ll let the numbers stand for themselves,” said Facebook CFO David Wehner. “We are growing in all regions.”

That includes Europe, where MAUs rebounded in the fourth quarter after dipping slightly between Q2 and Q3. Facebook ended the year at 381 million monthly actives in Europe, up from 375 million the quarter before. Wehner attributed the growth to post-GDPR stabilization.

Speaking of Europe’s new privacy law of the land, Facebook CEO Mark Zuckerberg thinks it should be the new privacy law of the entire planet, or at least something quite like it.

The basic principles behind GDPR are “very important,” he said, and “having that codified around the world would be a very positive step. … It would be good for people everywhere to make sure every person who uses an internet service has the same protections no matter where they live.”

Zuckerberg, somewhat cryptically, noted that Facebook is “working with folks to enable that,” without going into detail about who these folks are. (For what it’s worth, Facebook spent more in 2018 on government lobbying – $12.62 million – than at any other point in the company’s history.)

Privacy – the need for it, the lack thereof – is also one of the main motivators, Zuckerberg claimed, behind Facebook’s plan to eventually link its messaging apps and make end-to-end encryption the default for security.

Encrypted messaging and the ephemeral nature of Stories are “privacy-first products,” Zuckerberg said.

Storing data for long periods of time can be an asset in that it helps “provide better services, but it can also be a liability, because there could be breaches or the data can be used in ways that weren’t intended,” Zuckerberg said, seemingly without a sense of irony. “That is why things like encryption are so attractive to people and ephemerality is becoming increasingly important.”

Unfortunately, though, there may also be some ephemerality when it comes to the revenue gains Facebook made in the fourth quarter. Wehner warned investors to expect a revenue deceleration throughout 2019 thanks to the continued mix shift to Stories.

Although Facebook says it now has 2 million businesses using Stories across platforms, the format monetizes at a lower CPM than news feed ads.

This post was syndicated from Ad Exchanger.