Facebook Records High Profits in 2020

Facebook reported strong fourth-quarter financials but spooked markets a bit by warning of advertising headwinds this year, according to the Deadline report, on Wednesday.

The revenue was $28.1 billion, net profit hit $11.2 billion. Meanwhile, monthly active users of 1.84 billion were up 11% year-on-year.

Moreover, the family daily and monthly active people a metric that includes Instagram, Messenger, and WhatsApp were respectively, 2.6 to 3.3 billion at year-end.

“We believe these shifts provided a tailwind to our advertising business in the second half of 2020 given our strength in product verticals sold via online commerce and our lower exposure to service verticals like travel. Looking forward, a moderation or reversal in one or both of these trends could serve as a headwind to our advertising revenue growth,” the firm said.

Meanwhile, Mark Zuckerberg, the Facebook CEO added, “We continue to face significant uncertainty as we manage through a number of crosscurrents in 2021.” He also warned of tough comps on advertising in the second half of 2021 from the year before.

On other hand, there’s considerable interest among investors on how Facebook is monetizing e-commerce and other products from Facebook Marketplace to Reels, Instagram Shopping, and virtual reality and all of which promise to expand its business.

However, the firm faces uncertainty around Apple’s update to its ad tracking policy in iOS 14. Specifically, Apple’s expected rollout of so-called Limited Ad Tracking features would prevent the collection of its identifier for advertisers (IDFA), which could impact Facebook’s ad sales.