Facebook's Day Of Reckoning: Blip Or Sign Of Broader Turn?

Facebook in palm

"The implementation of GDPR gave a large number of Facebook users control over their privacy, and it should have been patently obvious to investors (and to us) that allowing users control would result in slightly lower engagement", he noted, alluding to Europe's General Data Protection Regulation privacy rule.

"The company has a track record of resetting revenue growth and expense expectations only to turn around and exceed those expectations the following quarter", Munster wrote. But the revenue of $13.2 billion missed Wall Street estimates of $13.4 billion.

Facebook Chief Financial Officer David Wehner said on a conference call with investors that Facebook is "putting privacy first" after the Cambridge Analytica scandal triggered a wave of terrible press, customer angst and regulatory scrutiny around the world.

Facebook's stock plunged Wednesday following the company's second-quarter earnings report. Facebook's loss was the biggest single-day drop since it started trading publicly in May 2012.

Facebook shares fell another 0.8 percent on Friday, closing at $174.89 on the Nasdaq.

After the earnings report, executives worked to explain the potential of Facebook's other properties, not just the main social network, to fuel growth.

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The company had warned investors to expect a surge in costs due to efforts needed to address concerns about the Cambridge Analytica scandal and Facebook's inadequate handling of users' privacy.

It was filed just hours before a brutal Facebook second-quarter earnings update on Wednesday, which sent the firm's share price tumbling almost 24 per cent, wiping as much as $148 billion off its value.

Despite buoyant growth in recent months, reaching an all-time high on Wednesday, the company warned that the second half would see a slower pace of revenue growth, and that profit margins in the years to come are set to slip. But the results followed a period in which data-privacy issues came under harsh scrutiny, with Zuckerberg testifying before Congress for hours on the company's missteps.

Read the full story at Fox News. "I find that deeply offensive, but at the end of the day, I don't believe that our platform should take that down because I think there are things that different people get wrong".

Facebook may be heading for its worst day on the markets in its history a day after the company revealed that user growth, amid swirling questions about how their information is used, has slowed. Global monthly active users hit 2.23 billion as of June 30, up 11% year-over-year. Commercialisation of those apps is nascent. Amazon Web Services sales hit $6 billion, marking a yearly growth rate of nearly 50 percent, while the segment's profit was $1.64 billion.

Facebook has also faced public image problems because of the way Russian Federation used the site to try to influence the 2016 USA presidential election.

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