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Profits up at Facebook, with no impact from privacy scandal

26 April 2018

Facebook showed at least initial resilience on Wednesday when it released its financial results from the first quarter, a period when the social network was criticized for the way it handles information about its users. Analysts had expected the company to generate around $11.4 billion.

The numbers come on the back of two months during which Facebook has been involved in a data-breach scandal, in which data of 87 million Facebook users was gathered and used in political campaigns.

The notice has asked about the proceedings that the social media giant has undertaken against those who have violated Facebook's policies of privacy.

Chief executive Mark Zuckerberg said: "Despite facing important challenges, our community and business are off to a strong start in 2018". "To each query, the company that faces probes in different parts of the world for illegal data mining, has provided one line answers which don't explain anything or provide any assurances". "Now the important thing is that we execute on all the things we need to do to keep people safe". Operating costs were lower than forecast by analysts but CEO Mark Zuckerberg warned they will continue to eat into Facebook's profits as it adds 20,000 workers to address security and privacy concerns in the wake of the Cambridge Analytica scandal and the rise in scepticism abut the company.

In late March, Zuckerberg admitted his company had made mistakes in how it handled data belonging to its users and promised steps to restrict developers' access to such information.

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Analysts estimated that Facebook would report 1.45 billion daily active users the first three months of this year, compared with 1.4 billion the previous quarter. The uptick is an important measure for the company, which had posted its first-ever drop in North American users a year ago.

Facebook data breach has snowballed into a major controversy in India with main political parties BJP and Congress accusing each other of engaging services of Cambridge Analytica to influence elections in the country.

The company's healthy ad business drew the vast majority of sales, but investors often look to the company's nascent Messenger and WhatsApp divisions as potentially massive sources of revenue in the future.

The lucrative social media company also seems to have survived the subsequent #DeleteFacebook online trend, as the number of daily and monthly users, and posts also surged.

In January, Mr. Zuckerberg said the number of hours users spent on Facebook had fallen by almost 50 million hours a day in the final quarter of a year ago because of changes to the platform's news feed to shift users away from passive consumption of content and toward more meaningful interactions.

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Facebook is boosting spending - aside from its efforts to regain the public's trust it is shelling out for content deals for its new video section, Facebook Watch, and investing in R&D in artificial intelligence and its hardware businesses.

Chief Financial Officer David Wehner told analysts on a call that expenses this year would grow between 50 percent and 60 percent, up from a prior range of 45 percent to 60 percent.

Earnings per share were $1.69 in the first three months of 2018, well ahead of Wall Street's expectation of $1.35 in profit.

Facebook has been asked a whole lot of fresh details from the volume of data collected, how it is collected, consent, authorisation of apps on Facebook platform along with why the site that has 27 per cent of its business coming from India failed to detect the breach.

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Profits up at Facebook, with no impact from privacy scandal