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Facebook revenue beats estimates; discloses antitrust probe (reuters.com)
121 points by tareqak 6 months ago | hide | past | web | favorite | 100 comments

I came to the conclusion that there is definitely an ad network listening in to private conversations on users' phones and that network probably belongs to Facebook.

Recently, I was cleaning my apartment and I moved a heavy piece of furniture to vacuum the dust underneath it and I found a set of clear plastic retainers for teeth. They must have belonged to the previous tenant who had moved out about 6 months earlier. The retainers looked like they were 3D printed (lots of small ridges on them) and I told my wife that when I had mine (a decade earlier), they were kind of expensive but these ones were 3D printed so they must be a lot cheaper and we can probably just throw them away. The conversation lasted no more than a minute.

Next day, I was browsing yahoo.com and the ad banner had a picture of a clear plastic retainer and was advertising 3D printed retainers. Neither me not my wife had posted anything about the retainers anywhere or discussed it with anyone else or even looked it up on any website (neither of us cares about the subject at all; neither dentistry nor 3D printing). This is the first time I ever saw advertising related to dentistry or 3D printing.

This is not the first time that I've experienced a creepy ad but it was definitely the most disturbing because:

1. It was an extremely specific and niche subject matter which does not relate to me in any way; it was based on an extremely unlikely freak occurrence.

2. I only spoke about it with my wife in an extremely casual way. Neither of us looked it up online on any website afterwards (we verified). The subject matter only occupied our thoughts for an extremely small amount of time.

3. The ad came up the next day after having the conversation.

I have had similar stuff come up, the most cut and dried example I could pinpoint was when on a Sunday morning, Meet the Press, which after the 2016 election I had started watching each week, was pushed off in place of a golf tournament that week. I got distracted, and started just doing some stuff around the house while it was on in the background.

I have no interest in golf, I have never searched or cared about golf in any way whatsoever. Yet, the next few weeks I started getting ads about golf stuff in FB. The only other real explanation would be that Verizon is selling my viewing information and this is somehow being linked back to my FB account.

There's this famous picture of Zuckerberg with tape over parts of a MacBook Pro next to him implying that whoever that computer belonged to didn't feel that even Apple's security was enough to protect their privacy. (I can't remember if that's suppose to be his laptop or just one he's coincidentally next to)

Here it is: http://static4.businessinsider.com/image/5769a61e91058425008...

Other's are definitely experiencing this. https://www.youtube.com/watch?v=U0SOxb_Lfps

It's totally anecdotal, but most people I know have either stopped using Facebook or are much less active than previously. The few teenagers I know don't even use it at all.

I guess all that growth must come from countries that recently got into Facebook.

The people you know may not be representative. I agree that it seems that less people use FB to share stuff about their life or follow friends and family. But many people also shifted their main usage of FB, so it's not that they are not using it all, just use it differently. That's at least my impression based on the little data I have. I'm talking about things like FB groups, market place and others that are pretty popular.

Agreed, groups are a huge deal. Once I figured out groups my FB use changed dramatically. Now I'm on there all the time, my family and friends don't see what I'm doing unless I for some reason joined a public group, and miracle of miracles, you can even find file downloads in these groups and the search functionality works pretty well.

Facebook was in my no-thanks bucket for a long time, but that has really changed and it didn't involve any significant privacy compromises beyond the usual ad-sales stuff.

By the way, there are a LOT of people using assumed names in these groups. Some of them get reported and return to unleash their annoyance on the rest of the group for "whoever did that". It's a really awkward aspect of the experience IMO.

> By the way, there are a LOT of people using assumed names in these groups. Some of them get reported and return to unleash their

and then they resolve to stolen identities which makes this whole fb thing awfully fraudulent

Oddly enough my experience is that use has only increased in my parents generation (the 75+ crowd). From my admittedly small glimpse into their circle of "friends" it seems that much of their use is a non-stop rage fest around politics.

Politics, and grandchildren. It seems to be a specific set of topics shared amongst close knit groups in the older demographic.

No, it’s that anecdotal experience doesn’t really say much about a global platform.

Teenagers usually don’t use FB. They have other means to keep in touch with their peer group and they don’t want to be on the same platform as adults are on. But you see once they move away and want to keep in touch with family, they are more likely to be on it.

They are reporting their users now across Whatsapp, instagram, and FB. While almost everyone I know hardly logs into the FB property, we're still really active on WhatsApp.....and that counts towards their 2.5b monthly user metric.

Yeah unfortunately I contribute two users - WhatsApp and Instagram to that count. I am sure plenty of people count multiple times because the services may not be linked together. IG, WhatsApp, FB and even FB Business accounts would all count as separate users when really they are the same human behind the account

Yes - pretty much impossible to NOT use some kind of FB service these days. Hence all the anti-trust hoopla.

Thanks, I didn't know that. I thought it was purely Facebook users.

Daily Users have grown only 5m in 2 years, in the US/Canada.

About 51% of US/C check facebook or messenger every day, and 67% every month. So 16% of people check it but less than daily.

I use it more than ever! It's where everyone organizes events, says they're interested in festivals so they know which friends are going, forms groups around.

Same here. My group of friends we all have an account but we very rarely post anything. I only connect maybe once a week max to see if I have some notifications.

Every once in a while I think about deleting my account but then I remember I have all those people I know only through Facebook.

I agree, teens dont use facebook. But in College, everything changes. Its the easiest platform to coordinate events across hundreds of people you might not even know. Theres just a bunch of cases that no other platform covers, like finding clubs and events, promoting your party, or even selling donuts to fundraise. It does everything on one platform that everyone has. We don't like facebook, but there is simply no alternative.

> I guess all that growth must come from countries that recently got into Facebook.

I have worked for companies with big, really big, user bases. As time passes companies get way better at getting more value from each user. They have more data. They have better software to offer promotions, advertisements, etc. You may be better off with half the users but getting more money from each one of them than with more users but giving low value. Depending on where the lines in the graph cross less users and more money is possible.

I have yet to sign up.

I have missed meetups, other social engagements, family photo shares, news and such that were on FB only. Get routinely made fun of by family and friends since I am the "techy" who is "afraid" of technology as they say.

But people I care about I contact via email, chat, talk in person or phone. Maybe I am strange and I just never felt the need to either broadcast to everyone what I am doing or keep an eye on what everyone else is doing unless I am talking to them one one one.

You don't have to broadcast. You can just make an account and let them invite you. It's not as hard as HN makes it out to be.

This. I have had a Facebook account since the days of needing to be invited and yet I have posted a status update on the site less than 10 times. I barely even check on my newsfeed.

But there is hardly a messaging platform as ubiquitous as Facebook messenger. Not everyone uses it as their main messaging client but almost everyone has one. Having an active Facebook page and group has also done more for my online business than any ad marketing. And Facebook marketplace is like Craigslist but better in almost every way.

I don't care if people make a Facebook account or not but there is certainly value in one, even if you don't care about the "News Feed".

My impression (also anecdotal) is that while there are people who have given up Facebook, or are using it less, they're a small percentage.

Most of what I've noticed is people no longer posting something on Facebook, then Instygram, then Twitter, then Tumblr, then whatever else is out there. They seem to be coalescing into one or two favored platforms.

Anecdotally, I know a lot of people who stopped using facebook, but continued using messenger. They’d all still count as MAU.

usage has shifted less from "posting baby pictures omg omg omg" to more facebook groups and business pages and stuff. Which is likely better for Facebook and exactly what they want (well, they'd probably rather have both, but if they can only have one..)

I remember reading a while back (It may have been on here but I can't find it!) that the growth wasn't the big ticket issue facing them it was the lack of sharing!

People were sharing less and that seemed to be a major issue for them.

I have a bunch of friends who barely used it to begin with. More recently, most of the people I'm closest to who did have stopped using it. I think my aunts and uncles use it more these days though?


I see people glued to the Facebook app every day.

I'm not sure if the report includes Whatsapp, but that should be a huge portion of active users.

Their MAUs and DAUs exclude insta and whatsapp. Bottom of page 4 of their 10Q.

I wonder if there is sort of the uncool factor going on. People might "use" FB but it's not cool to post very often or admit to it. 1.56B DAUs, that's 20% of the planet, if you include whatsapp, I think it's staggeringly more. Either they are somehow lying about their numbers and risking potential shareholder lawsuits or it is like shopping at Walmart or eating at McDonald's where the "cool kids" never admit to it but very clearly a good sized chunk of them still do. Lying about the numbers just seems sort of silly to me.

It's odd, none of my same age friends post much on FB; it's vacation brag pictures, various life events or children's milestones sort of stuff. At the same time, messenger might be the best way to contact many of them, better than SMS.

I can also anecdotally confirm that I myself and most of my friends very rarely use Facebook anymore. I imagine that my browser or devices are still pinging FB on my behalf and counting me as an "active user" even though I haven't browsed the app or site in more than a year.

If you look at how they determine an active user (in their quarterly filings), you'll discover that that is not particularly true.

Or from fraudulent accounts, or both!

I'm betting that an FTC antitrust probe will have no effect on other nations using FB. I lived in Brazil, and it was typically a year or two behind the trending here in the US. While US use of FB is down in their previous major demographics, it is spiking internationally.

The title mentions an antitrust probe but the article says nothing about it. What is that about?

The last part of the opening sentence has it (emphasis mine):

Facebook Inc (FB.O) beat analysts’ estimates for revenue on Wednesday, even as the world’s largest social network agreed to pay a $5 billion fine over data privacy and announced a U.S. antitrust investigation.

Oddly, I see less issues with Facebook than with Google. Facebook has a tight grip on social media, but then there's also Twitter. facebook.com is dying long-term (though Instagram is picking some of that up) and they're not nearly as vertically integrated as Google is, for example (browser, operating system, email, video streaming, maps,...).

In the current political climate, I don't see an antitrust investigation ever leading to any major impact but it's almost inevitable, over the coming decade or so, to see a ton of regulation and forced splits for tech giants. The current system simply can't be healthy.

Oddly, I see less issues with Facebook than with Google.

Patience. Everyone will get their turn.

The last paragraph in https://www.bloomberg.com/news/articles/2019-07-24/facebook-... says that the FTC will be dealing with Facebook and Amazon while the Justice department will deal with Apple and Alphabet.

More specific news about the antitrust probe: https://www.bloomberg.com/news/articles/2019-07-24/facebook-... .


Seriously asking: why not? Do you just not believe that scale is possible?

I hadn't thought about it, but let's make a few assumptions and see how realistic that is.

* 7.7B people in the world.

* Subtract 1.4B people in China (even though plenty of those people actually have FB and login when abroad or via VPN, there are more countries where Facebook is blocked, plus outliers where usage is low).

* We don't want to count people who are really young. There's also a decay in popularity related entirely to age. I'm going to use ages 15-64, simply because the World Bank made it easy to get an estimate: ~65% of the global population[0].

* We have (7.7-1.4) x .65 = ~4.01B people between 15 and 64 years old in countries with Facebook. Given that Facebook growth skews towards countries with younger populations, I'd say this is a hard floor on what I'll call the "eligible Facebook population".

50% is high at first glance, but keep in mind that we've already excluded most of the low hanging fruit that would make it definitionally impossible for someone to use Facebook. I'd say their number is high, but not spit-take high.

[0] https://data.worldbank.org/indicator/SP.POP.1564.TO.ZS

Plus there are a ton of over 64 folks on there...

Riddle me this: why would they lie? Shareholders could sue, since they try to infer some value from it there could be other legal consequences. If they only had, say 1billion daily active users instead of 1.56billion, would that really water their value down much? I don't see a competitor coming to eat their lunch that would rationalize lying about that stuff.

Also, why would they even care about reporting high numbers? Facebook's leadership doesn't have any of the typical business pressures to please investors. Leadership (Zuckerberg) already holds majority voting power, and Facebook is fully self sufficient financially (no concerns about needing to raise more capital at poor prices).

They're definitely in a unique position, but there's always simply not wanting to crush their investor relations department, not that I have any evidence or suspicions that this factors in at all.

Flat growth numbers would water down their value, particularly in developed markets, as we saw last July. But more to your point, these number are so astoundingly high, and have been for years that you're really asking "why would they ever have overestimated these numbers?", which gets to the same point.

I have over a hundred Facebook accounts, so I’m helping!

I've been out of that game for 5-6 years, but I was managing about 1K accounts at my peak.

Their fraud prevention stuff flagged a bunch of them but >50% of them are still active.

What were they used for?

Looking back it was so juvenile that I am embarrassed. But I used to sell popularity services for new businesses on MySpace and Facebook. I would get them high friend counts, lots of likes for their page, and even like or upvote certain posts make them appear more popular.

It literally did nothing of real value and was a complete waste of time. And in the case of Facebook probably set them seriously behind in doing actual good marketing because their social graph was completely destroyed by the artificial campaigns.

ah, let me guess...


This is a great analysis and basically where I was going in my head with this, but you are missing one critical fact, how much of the world has internet access. I think if we just assume that number is 75% which seems to be way too high just looking at https://en.wikipedia.org/wiki/Global_Internet_usage. Then we can see a better picture of how their numbers are something that any accounting firm should have a hard time certifying.

I would certainly believe 50% of the total population for MAU or numbers hovering near it for the US/C and probably most of Europe for monthly active users. That matches my anecdotal observations, however they claim 75% of the total pop for US/C and 48.9% of the total pop for Europe MAU. To think that somehow they claim the rest of the world has over 50% of its population using facebook once a month, when even Europe doesn't seem to meet this threshold just seems.....

I have just noticed that they try to lump duplicate and false accounts together and give a number of 11%, but then later they state that false accounts are actually 5% bringing the total fake accounts to at least 16%, which I still think is low, but it is getting to a point to where it may not be as clear cut fraud. I would bet their total account numbers would also be helpful in showing how many are duplicates or fake, but not sure they disclose that anywhere, probably due to their shadow accounts as well.

Facebook generally groups their regions into North America, Latin America, APAC (Asia Pacific) and EMEA (Europe, Middle East, Africa), so the 50% "Europe" number you are referring to isn't really as comparable as "EU+Russia v. US", which seems to be an assumption you are making.

I did consider people with internet access, I just didn't call it out. I think it's beyond reasonable that Facebook has >50% penetration of the total eligible Facebook population with internet access, and I'd believe upwards of 80%. Internet.org essentially exists because Facebook knows that they've been approaching this ceiling for years.

Also, referring to duplicates+false as 11% and then false as 5% doesn't imply 11+5=16. It just means that "not unique individuals" is a superset of "not actually real people at all".

It clearly says in the 1Q 10Q:

Europe includes all users in Russia and Turkey and Rest of World includes all users in Africa, Latin America, and the Middle East.

I do agree they probably do mean that mean a superset, the wording is kinda odd maybe to downplay the number of false accounts, which are the real issue not the duplicate ones.

I still think these numbers are false, I think it is probably a service to the people working at instagram and whatsapp, that they aren't reporting these numbers, which basically require them to always go up.

You do understand these documents are vetted by accountants, lawyers, compliance officers etc.

It is highly unlikely they are falsely claiming those numbers. What is likely is that they are including loose interactions e.g. OAuth Login as MAUs.


"Facebook revised its definition of MAU: It would no longer include "third-party pings"—that is, people who are not active Facebook users, but who share content only via another site that's integrated within the Facebook login."

What is it that you think the 10Q says that validates your claim that these numbers are false?

We define a monthly active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or used our Messenger application (and is also a registered Facebook user), in the last 30 days as of the date of measurement. MAUs are a measure of the size of our global active user community on Facebook.

They do mention that they think 11% of their accounts are duplicates. But even then I think the numbers smell off.

You act like big ‘vetted’ companies have never restated earnings for prior quarters years after the fact

It looks fishy

"I know nothing about this subject and/or area, but nonetheless strongly believe people involved need to go to jail"

Probably a combination of Facebook, Facebook messenger, whatsapp, instagram, and god knows what else.

Maybe anything using facebook login counts as an activity. I.e. people that login to spotify with FB, but never use FB.

From their 1Q 10Q (2Q is not up yet):

. We define a monthly active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or used our Messenger application (and is also a registered Facebook user), in the last 30 days as of the date of measurement. MAUs are a measure of the size of our global active user community on Facebook.

From the slide it says

"The numbers for DAUs and MAUs do not include Instagram, WhatsApp, or Oculus users unless they would otherwise qualify as such users, respectively, based on their other activities on Facebook."

If you click a like button, on any website. Thats an MAU.

I don't think that's true.

Their old 10Q said this:

> An active user is someone who visited Facebook.com and logged-in (or has been logged in) or who has taken an action with a Facebook feature (for example, clicked a ‘like button.)

The current ones say this:

> a monthly active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or used our Messenger application (and is also a registered Facebook user), in the last 30 days as of the date of measurement.

Clicking a like button is no longer sufficient to count as an active user. I believe there were articles about this when they changed it, but I'm not sure.

Yeah, here's an article from 2015 when they changed the definition: https://www.adweek.com/digital/monthly-active-users-definiti...

thanks! I was not aware.

That still requires having an account and likely a shedload of your data on FB being tracked.

I assume that's the case, but is it true? Does it include people who have a FB cookie?

Just for some context, more than half of those users are in Asia (India, Indonesia etc.)


The stats on that page only add up to 1.076B

I'd wager they have 2.41 B monthly active accounts, but not users. My mom has something like 3 accounts. Where my wife is from, everyone seems to have at least 2 accounts, sometimes many more. And I'm sure millions, if not hundreds of millions, are the same. I wouldn't be surprised if their MAU surpassed the population of many locales, but they'd never admit as much.

They say that duplicate or "false" accounts make up 10% of their total numbers. They also are effectively banned in China and Russia to my understanding. So they are claiming that more than 1/4 of the whole world (even the undeveloped parts) use their website once a month even accounting for these false users.

Facebook is blocked in China, not Russia. However, there are plenty of Chinese MAUs when factoring VPNs and those who travel abroad. Basically, you can subtract the total Chinese population from the world population and assume you've properly discounted the global population to account for the few other countries where it's banned and factored in those who travel or connect via VPN (Iran, North Korea, etc).

I'm curious, what's the use case for having multiple Facebook accounts? Presumably you're talking about actual user accounts, and not Pages.

My wife's friends/family use them as a form of silo'ing different groups of people. I haven't used FB in years but there used to not really be a good way to do that, at least. That would be my guess. For example, my wife is friends with her own sister 3 times as 3 slightly varying names.

I won't get into my mom's use case. I think she mainly uses them to friend with and snoop on people. Weird lady.

I use one for my personal use. Another for video calls for my kid. Another for snooping on girls I slept with when I was single. A fourth for apps that want third party login.

Why do you think that? They own all the most popular platforms outside of China.

Do they define "monthly active users"?

That includes Whatsapp and Instagram, right? Instagram is pretty hype atm.

I don’t get this metric especially after they specifically disclosed that their metrics could be off by as much as 5% last quarter from “fake” accounts (which they oddly didn’t disclose financially).

I wonder if "people who visit a website with a facebook tracking script that have been successfully fingerprinted" count as a user. If so I could believe that number

If by 'monthly active' it means someone that checks the facebook app at least once a month, then it's surely a plausible claim.

Why would they lie? These numbers hurt their stock price because they suggest that future growth is capped.

That number includes bots.

No, it does not.

All my friends' pets have accounts. Plus celeb "official" + "personal". + Brand pages.

Facebook has the same problem the Republican party has. Their users/supporters are all dying and less and less people are signing up. However they are still a force to reckon with and generate a lot of cash.

Is it a problem? Older people are more likely to vote and spend more time on Facebook. Older people have more money to donate to parties and spend on products they are advertised.

If it is a problem, it sounds like a great one to have. What's best: new old people are being made every day and they are a huge cohort right now.

This will also surprise the youth-o-philes in SV, but young people eventually grow up to be old people and they almost always change drastically in political views, media consumption, and purchase decisions. Sure, they probably won't be on Facebook and the current Republican party will change, but that just means Instagram will be the new old people place and the future Republicans will have made their mark.

young people eventually grow up to be old people and they almost always change drastically in political views, media consumption, and purchase decisions.

This is true. I knew a bunch of really lefty people in the colleges I went to. Now that they're full adults, only one still adheres to that mantra.

My guess about it all is that it's easy to be conservative when you have something to conserve. It's easy to be liberal when you're not invested in a house, neighborhood, career, children, etc... because most of your life is ephemeral.

How’s life in your Bay Area bubble?

It's not hard to look at the age breakdown for each of the political parties and see this checks out.


Haven't Republicans traditionally trended older? If there are enough voters who change parties as they age, does it matter that one party tends older while the other trends younger?

I hear that claim a lot but if you look at the link I posted under the "A wide – and growing – generational divide in partisanship" heading, it doesn't appear to actually be the case. If that were true you'd likely see a much bigger pull to republicans as Gen X aged during the studied period (94-17). Also doesn't explain the sharp millennial pull to democrats at all.

This assumes that people's political affiliations don't change as they age.

Given by the amount of youth that support communism I sincerely hope you're wrong.

As I said in other comments, you can look at those graphs and see they are relatively static across all generations. That said, what isn't pictured is the shift of the ideologies of the parties themselves, which both have gotten more progressive long term, though not really in the years studied in this case.

> Given by the amount of youth that support communism I sincerely hope you're wrong.

As someone in that demographic it sounds like you're listening to way too many conservative sources trying to scare you. I'm very heavily liberal and even I know maybe 1 in 1000 that actually want any form of communism. Most people my age in the US (Millenial / Gen Z border) on the left are very much for the hybrid socialism / capitalism of Bernie and much of Europe.

Why from a throwaway?

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