Facebook Q3 Earnings: Mark Zuckerberg responds to massive document dump

Zuckerberg said, “Good faith criticism helps to us get better. But my view is we are seeing coordinated efforts to selectively use leaked files to paint a false image of our company.” “The reality is that our culture encourages discussion and research about our work so that we can make progress with many complex issues that don’t only concern us.

The company’s results were announced amid what is perhaps the most serious crisis in the history of the social media giant over the past 17 years. Frances Haugen, a whistleblower, leaked tens of thousands of pages from internal documents to the Wall Street Journal’s Facebook Files series. On Monday, a flood was of additional news coverage by a group of 17 US news agencies, as well hearings with US lawmakers. These documents offer a deep look at Facebook’s most serious problems, including its inability to regulate hate speech and misinformation, its use of its platform to facilitate human traffickers, and research on the harms that young people are suffering.

Facebook has reacted to many of these reports by claiming they are misleading and mischaracterize the company’s research and actions. Zuckerberg made a statement earlier this month in which he tried discrediting the whistleblower and last commented on the situation after Haugen’s Senate hearing. On Friday, another ex-Facebook employee filed an anonymous complaint against the company to SEC with similar allegations to Haugen.

Investors were reminded by the company on Monday that despite all the negative headlines, they are still making money.

Facebook reported $29 Billion in revenue for the three-month period ending September. This was 35% higher than the same period one year ago. The company earned nearly $9.2 Billion, an increase 17% over the year before. The number of people using Facebook’s family of apps grew by 12% year over year to nearly 3.6 million during the quarter.

The results were almost in line with Wall Street analysts projections. Facebook(*)( FB(*()Stock rose as high as 3% Monday after the earnings report before plummeting to around 1%. PR crises are nothing new for Facebook. Despite outrage from regulators, Facebook’s business has continued operating at a healthy pace in most cases. This time, however, could be different. Due to recent changes in Apple’s app tracking regulations, Facebook’s vast ad industry is already in danger. Apple’s iOS 14.5 software update was released in April. It requires users to give explicit permission for apps that track their behavior and sell personal data to advertisers, such as their age, location, spending habits, and health information. Facebook has aggressively resisted the changes and warned investors last summer that the update could harm its business if too many users opt out.

Facebook warned Monday that the iOS 14 changes could cause “continued headwinds” in the fourth quarter 2021.

“We’ve been open about knowing that there are headwinds coming, and we experienced them in Q3. On Monday’s earnings call, Sheryl Sandberg, COO of the company, stated that the biggest impact of iOS 14 changes was the most significant. “We’ve had to face two challenges as a result. One, the accuracy of our advertising targeting has decreased, which has increased the cost of driving results for our advertisers. Two, it has been more difficult to measure those outcomes.

While the majority of the world was focused on Facebook’s real-world problems, the company told investors in its report that it wants them to look forward and not backward. Starting in the fourth quarter, the company plans to break out Facebook Reality Labs — its division dedicated to augmented and virtual reality services — as a separate reporting segment from its family of apps, which includes Instagram, WhatsApp and Facebook’s namesake social network.

CFO Dave Wehner claimed that Facebook is investing so heavily to create this new division that it will decrease “our overall operating profit by approximately $10 Billion in 2021.”

Zuckerberg made a statement with the results and also spoke out about the future: “I’m excited for our roadmap, especially around creators, business, and helping to create the metaverse.”

Wall Street analysts questioned Wall Street analysts more about Facebook’s new initiatives and products such as the metaverse and Instagram Reels, than Monday’s news coverage. This is a reminder of how investors often prioritise the company’s potential growth over its potential harm. Evercore ISI asked Zuckerberg for an evaluation of the company’s progress towards building artificial intelligence that can identify problematic material.

Zuckerberg pointed to the quarterly transparency reports of the company, which identify “what percent of the content we act upon is our AI… finding instead than people having to disclose it.” He stated that the AI system is responsible for identifying most of the content they act on in “most of these categories”. He did however note that the success of their systems can vary depending on the category.

“Some of these categories, such as hate speech, have proven more difficult,” he stated. “We’re operating in approximately 150 languages around the globe… there’s a lot cultural nuance in this.”

Zuckerberg tried to rally his staff.

He stated that he was aware of the scrutiny that surrounds our efforts and that he wanted to express his gratitude to the team and all those involved in this project for their hard work.

Correction: An earlier version of this article misrepresented the percentage of Facebook’s quarterly growth in sales.

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