Facebook Inc on Tuesday said that the COVID-19 outbreak was undercutting sales of the advertising that accounts for nearly all of its revenue, even as more users spend time on the social network during virus-related lockdowns.
“We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19,” the company said in a statement.
Facebook shares fell about 1 percent after hours following an 8.7 percent rise in regular trade.
The company said messaging across its platforms had increased more than 50 percent over the past month in many of the worst-affected countries.
In Italy specifically, users have been spending 70 percent more time in its apps.
Group calling with three or more participants increased by more than 1,000 percent in Italy in the past month, it said.
Online voice and video calls at Facebook-owned Messenger and WhatsApp have more than doubled in places hit hard by the coronavirus, according to a post by vice president of analytics Alex Schultz and Jay Parikh, vice president of engineering.
“As the pandemic expands and more people practice physically distancing themselves from one another, this has also meant that many more people are using our apps,” Parikh and Schultz said.
Much of the increased use has been at Facebook’s free messaging services, which do not generate ad revenue, the executives said.
“We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19,” they said.
Soaring use at Facebook’s “family” of services and across the Internet industry have been unprecedented, they added.
Facebook declined a request for comment on precisely which of its markets were experiencing adverse business impact or the magnitude of that impact.
The company’s statement echoed similar industry guidance the day before from Twitter Inc, which reported a boost in active users, but pulled its first-quarter revenue outlook and forecast an operating loss due to the outbreak.
Many advertisers have pulled marketing budgets to rein in costs because of virus-related uncertainty.
Some are also apparently hesitant to advertise alongside coronavirus discussions for fear of associating their brands with the sensitive topic.
Additional reporting by AFP
Sales across Taiwan’s food and beverage sector nosedived 22.8 percent year-on-year to NT$47.9 billion (US$1.59 billion) last month, the largest decline in 20 years, the Ministry of Economic Affairs said yesterday. One of the first victims of the COVID-19 outbreak, the sector has posted double-digit annual declines in sales for three months in a row. “Restaurants ... took the biggest hit, as the strict anti-epidemic measures implemented have had a notable impact [on revenue],” Department of Statistics Director-General Wang Shu-chuan (王淑娟) told a news conference in Taipei, referring to seating schemes spacing diners further apart. “Consumers are also less willing to eat
‘PERFECT TIMING’: The updated requirement would free up 4 million more masks per day for manufacturers, which are expected to sell up to 8 million units daily The government would requisition 8 million masks daily to ensure that the nation has sufficient supplies after a ban on mask exports is lifted on Monday next week, Minister of Economic Affairs Shen Jong-chin (沈榮津) said yesterday. “We have decided to lower the requirement from 12 million units to 8 million units per day, providing them [local mask suppliers] with 4 million more masks to sell freely according to market mechanisms,” Shen told reporters after a meeting with domestic mask manufacturers. The figure was determined based on local market demand, Shen said, pointing to declining mask purchases as Taiwan gets its COVID-19
IPO MOMENTUM CLOUDED: The major questions are whether fallout from Beijing’s proposed security bill would affect the return of capital and the US’ response to the bill Risks are mounting for Hong Kong’s stock market, the world’s fourth-largest, after the biggest plunge for the benchmark gauge in five years. China’s shock decision last week to impose a law cracking down on dissent has led to a flare up of protests in the territory, sparked concern over capital outflows and increased tensions with the US. That has placed Hong Kong, and its financial markets, on the front lines of a growing clash between the world’s two largest economies. The Hang Seng Index plummeted 5.6 percent on Friday, its worst drop since July 2015, when a bubble popped in China. A
Local banks’ combined exposure to China in the first quarter dropped for the third consecutive quarter, to NT$1.62 trillion (US$53.86 billion), as they trimmed investment and loan positions amid the COVID-19 pandemic, Financial Supervisory Commission (FSC) data showed. Their exposure fell 1 percent from the previous quarter, compared with a 4.9 percent decline to NT$1.64 trillion at the end of December last year and a dip of 2.1 percent to NT$1.73 trillion at the end of September, the data showed. “Exposure has been declining since the second quarter last year, as lenders’ clients did not need as much funding as before after