TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Unlawful Eskom strike costing South Africa three stages of load shedding

      1 July 2022

      Striking Eskom workers will face consequences: De Ruyter

      1 July 2022

      The AI tool that has changed my life as a developer

      1 July 2022

      Google.co.za is down and the domain is pending deletion

      1 July 2022

      US files charges over South African bitcoin fraud scheme

      1 July 2022
    • World

      Meta girds for ‘fierce’ headwinds

      1 July 2022

      Graphics card prices plummet as crypto demand dries up

      30 June 2022

      Bitcoin just had its worst quarter in a decade

      30 June 2022

      Samsung beats TSMC to 3nm chip production

      30 June 2022

      Napster plots crypto comeback

      29 June 2022
    • In-depth

      The NFT party is over

      30 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022

      Everything Apple announced at WWDC – in less than 500 words

      7 June 2022
    • Podcasts

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022

      Everything PC S01E04 – ‘The story of Intel – part 2’

      1 June 2022
    • Opinion

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022

      How AI is being deployed in the fight against cybercriminals

      8 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»World»Instagram to power Facebook earnings

    Instagram to power Facebook earnings

    World By Agency Staff25 July 2018
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Facebook was pummelled by public criticism over privacy issues during the second quarter, spurring an unprecedented appearance in the US congress by CEO Mark Zuckerberg. Don’t expect to see much evidence of that turmoil in Facebook’s earnings report on Wednesday.

    The social media giant is expected to post record revenue and users in the quarter, thanks in part to the photo-sharing app Instagram, according to analysts. The business, acquired for US$715-million in 2012, now has more than a billion users and is a big reason Facebook’s advertising machine is still growing.

    “Instagram has become an absolute monster in terms of user growth and engagement,” Rich Greenfield, an analyst at BTIG, said in a research note this month.

    Multiple partners cited the strength in Instagram user growth as a key driver for buying more ads

    Despite the drama ranging from a data privacy scandal to stumbles in fighting fake news, shares of the Menlo Park, California-based company have gained 22% this year. Indicators point to user growth remaining relatively immune to the controversies.

    Heather Bellini, an analyst at Goldman Sachs Group, said checks with Facebook’s advertising partners showed robust demand in the second quarter, especially for Instagram.

    “Multiple partners cited the strength in Instagram user growth as a key driver” for buying more ads, Bellini wrote in a research note. She rates the stock a buy and expects Facebook to beat second quarter revenue and earnings estimates.

    While Facebook doesn’t break out revenue from Instagram, the unit is expected to generate $8.1-billion in revenue in 2018, according to research firm EMarketer. Facebook recently re-organised the company to put the Instagram division under Chris Cox, the head of overall product. The head of News Feed joined Instagram, reporting to CEO Kevin Systrom, to manage Instagram’s product. So investors will be listening for more details on the symbiotic relationship among Facebook’s divisions.

    Facebook is expected to report more than 2.2 billion monthly active users in the second quarter, up 2.3% from the previous quarter, according to the average of seven analyst estimates compiled by Bloomberg News. Daily active users are expected to increase 2.1% to almost 1.5 billion. Analysts also estimate profit of $1.71/share and sales to jump 43% to $13.3-billion from the period a year earlier.

    WhatsApp and Messenger

    In addition to engagement trends, investors will be looking for information on users’ reaction to privacy-setting changes after new European regulations, and progress in efforts to wring revenue from WhatsApp and Messenger, according to SunTrust analyst Youssef Squali.

    Facebook has endured several stinging public scandals in recent months. Beside the CEO testimony over data practices, the company has been broadly critiqued for its policies regarding content, which resulted last week in Zuckerberg’s defence of posts by those denying the Holocaust. Facebook has promised a cleaner site, with less spam, fake news and fake accounts, especially ahead of the US midterm elections. The company has been requiring advertisers that mention political topics to have their identities verified.

    None of that has affected the popularity of Instagram. During the quarter, the photo-sharing app announced a way for its users to post long-form videos in a TV section, which could be home to Facebook’s video ads in the future. It also reported that 400 million people now use its “Stories” function, which allows people to post video reports of their day that disappear after 24 hours, similar to the tool on Snap’s Snapchat.

    The app could contribute $20-billion to Facebook’s revenue by 2020, or roughly a quarter of Facebook’s revenue, Wells Fargo analyst Ken Sena said. And it’s unlikely to cannibalise the growth Facebook has already achieved.

    “Given the simultaneous growth in both Facebook and Instagram engagement over the last several years, we continue to see users supporting more than one platform,” he wrote.  — Reported by Sarah Frier and Jeran Wittenstein, (c) 2018 Bloomberg LP

    Facebook Instagram Mark Zuckerberg top
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleStandard Bank to pump R10-billion into energy projects
    Next Article Automation could lead to a jobs bloodbath in SA

    Related Posts

    Meta girds for ‘fierce’ headwinds

    1 July 2022

    Graphics card prices plummet as crypto demand dries up

    30 June 2022

    Bitcoin just had its worst quarter in a decade

    30 June 2022
    Add A Comment

    Comments are closed.

    Promoted

    Billetterie simplifies interactions between law firms and clients

    30 June 2022

    Think herding cats is tricky? Try herding a cloud

    29 June 2022

    How your business can help hybrid workers effectively

    28 June 2022
    Opinion

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    A proposed solution to crypto’s stablecoin problem

    19 May 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.