Business and Technology

Facebook shares roller coaster as it rides change

Facebook announced plans to adapt to users sharing more privately as the leading social network pours money into an ongoing battle with “bad actors” out to misuse its service.

Silicon Valley-based Facebook reported that its quarterly profit climbed in the recently ended quarter, but the social network mired in a spate of controversies  gained fewer users than analysts had expected.

Profit beat Wall Street expectations by jumping nine percent to $5.14-billion on revenue that leaped 33 percent to $13.7-billion in the quarter that ended September 30.

Facebook shares went for a rollercoaster ride in after-market trades as executives revealed quarterly earnings figures along with challenges and opportunities seen in shifting trends in user behaviour.

Facebook

Shares jumped, dove and then rose anew before staying on higher ground, up 3.1 percent to $150.80, on the Nasdaq early in the evening in New York.

“Right now, the market is really nervous and it doesn’t take much to move the stock,” said analyst Rob Enderle of Enderle Group.

“As long as they are meeting or exceeding on the bottom line (profit) they will be fine.”

The number of people who used Facebook monthly rose 10 percent to 2.27 billion, but analysts had expected that figure to be slightly higher.

Facebook has been trying to fend off concerns about how well it protects user data and defends against use of the site to spread misinformation aimed at swaying elections.

Facebook users are shifting fast to sharing more privately with messages or a “Stories” feature for creating short photo or video collections, instead of posting in their main feeds, according to co-founder Mark Zuckerberg.

While Facebook has made an art of monetizing ads in newsfeeds, it has yet to optimise making money from messages and stories.

“This is one of those situations where the community growth we are seeing is outpacing the progress we made on developing ads in that space,” Zuckerberg said of Stories.

“I think we will get there in time, and the opportunity will be bigger, but I can’t tell you what that time frame will look like.”

Facebook is also seeing a rapid rise in viewing videos, which also generate less ad money per minute than newsfeeds.

Source: IOL