A stark juxtaposition: At the same time Facebook’s general counsel was getting grilled by members of Congress in Washington, DC, on Wednesday about how the platform was abused by Russian election meddlers, Facebook beat revenue expectations for the third quarter.
Ad revenue was up 49% YoY, from $6.8 billion to just over $10 billion. Mobile ad revenue, which comprised roughly 88% of ad revenue for the quarter, increased by 57% from this time last year.
Daily active users on Facebook were up 16% year over year to 1.37 billion and monthly active users were up 16% to 2.07 billion. Instagram hit the 500 million DAU mark this quarter.
Average revenue per user in the US and Canada for the quarter was $21.20, up from $19.38 last quarter and $15.65 in Q3 2016.
In a nod to the controversies swirling around Facebook – fake news, fake ads, fake accounts and foreign adversaries taking advantage of them all – CEO Mark Zuckerberg stated that the company is “investing so much in security that it will impact our profitability. Protecting our community is more important that maximizing our profits.”
Facebook recently committed to doubling the headcount of its security and safety teams from 10,000 to 20,000 by the end of 2018. The company’s total current headcount stands at 23,165, a 47% increase from Q3 2016. (A portion of the 10,000 people dedicated to security is made up of contractors that aren’t counted in the overall headcount.)
Although a few investors asked questions about how Facebook’s planned investments in tightening security, both human and technological, will affect the bottom line, the majority were far more focused on Facebook’s video efforts and its plans for the Watch tab.
Over the next three years, the biggest trend in Facebook’s products will be the growth of video, Zuckerberg said, and this goes both for sharing through platforms like Instagram and WhatsApp, which have more than 300 million DAUs apiece, and for consuming and interacting through products like Watch and Live.
But “time spent is not a goal by itself – what we really want to go for is time well spent,” Zuckerberg said.
“Too often right now watching video is just a passive consumption experience,” he said. “We’re going to focus more on helping people share their own videos and moments in their lives.”
Facebook is planning to make a lot of expenditures in the quarters to come, including what CFO David Wehner called an “aggressive investment in video content to support the Watch tab” and a “sizable security investment in people and technology.”
The two investments are related.
“People do not want false news or hate speech or bullying or any of the bad content that we’re talking about, so, to the extent that we can eradicate that from the platform, that will create a better product which will also create a stronger long-term community and better business as well,” Zuckerberg said. “The reason why we haven’t been able to get these things to the level that we want today is not because we somehow want them on the platform, it’s that it’s a really hard problem.”
Facebook’s general counsel, Colin Stretch, was in DC earlier in the day being energetically questioned by members of the Senate and the House intelligence committees about what Facebook and its tech cohorts are doing to solve that “really hard problem.”