Facebook will this week shrug off the “fake news” controversy and a growing chorus of critics to unveil another year of rocketing profits.
The $550bn (£388.4bn) social media giant is set to reveal a 73% rise in profits to $17.6bn, fuelled by a 46% jump in turnover to $40bn.
The astounding performance comes amid growing threats of a regulatory crackdown, questions about Facebook’s advertising platform and bitter criticism from politicians and rivals.
Investor George Soros last week called the platform a “menace” to society. Marc Benioff, billionaire founder of salesforce.com, compared social media to Big Tobacco and called for similar public health-style regulation of the sector.
Facebook has also come in for criticism over the information it provides to advertisers. The Sunday Times recently created an ad aimed at people aged between 20 and 34 in Britain. Facebook’s system said its “potential reach” was 17m people. According to the census, carried out in 2011, only 12.3m people fall into this age group. Even allowing for immigration and maturation of people into that group since the last official headcount, it is highly unlikely the figure will have increased by nearly 5m.
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Facebook said: “While these non-billable estimates are created to help better plan campaigns, they are not designed to match population or census estimates. We are continually working to improve our estimation signals and will share updates when we have them.”
On February 8, the Digital, Culture, Media and Sport Committee will hold a special session in Washington as part of its “fake news” inquiry. The committee will question Facebook and YouTube executives, journalists and academics. Simon Milner, Facebook’s London-based policy director, is set to speak.
The company shocked the media industry this month when founder Mark Zuckerberg deprioritised news content in lieu of posts from friends and family. He acknowledged that this would lead to a drop in engagement. Wall Street, however, expects it easily to make up for any drop with higher ad prices, which jumped 35% in the third quarter. Of the 46 analysts that follow Facebook, only two rate its shares a “sell”.
A key area of growth is Facebook Watch, its new video service for longer-form original and acquired content. Media reports suggest that Facebook could acquire streaming rights to WWE, the professional wrestling league, and to NFL American football matches.