Facebook hit by scandals, misses revenue and user growth estimates

Facebook CRISIS Mark Zuckerberg

It would also wipe his US$13.7 billion ($20 billion) of gains for the year, leaving him with just less than US$70 billion ($102.2b).

For the second quarter, the social network reported earnings-per-share of $1.74 on revenues of $13.23 billion, as well as 2.23 billion monthly active users.

Total revenue rose 41.9 percent to $13.23 billion.

Facebook has been struggling for years with criticism about its content policies, its failure to safeguard private data and its changing rules for advertisers.

The magnitude of erosion of $120 billion can be understood if we compare it to other companies in the market: Facebook lost two Tesla in the after hour trade, i.e. within four hours. This week, Colin Stretch, who led Facebook's investigation into Russian election interference and who testified before Congress last year on Facebook's behalf, said he would leave the company by the end of the year. The company remains in a dominant position in mobile advertising alongside Alphabet Inc.'s Google. "That said, Facebook still has some wood to chop ahead both on the regulatory as well as user/advertiser front which must be successfully managed going forward", the analyst added.

Facebook's 2.23 billion monthly active users and 1.47 billion daily active users were both up 11 percent from previous year but also just shy of analyst predictions of 2.25 billion and 1.48 billion, respectively.

Facebook said it had 1.47 billion daily active users in June, compared with the 1.48 billion average of analysts' estimates compiled by Bloomberg.

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Incidentally, Facebook's numbers witnessed a marked decline even in important markets like the United States, Canada and the European Union, where the company took a direct hit in terms of DAU due to the implementation of the General Data Protection Regulation (GDPR).

After the earnings report, executives worked to explain the potential of Facebook's other properties, not just the main social network, to fuel growth.

On Wednesday afternoon's earnings call with analysts, Facebook CEO Mark Zuckerberg announced another way the social network measures and breaks out users: about 2.5 billion people use at least one Facebook-owned app - Facebook, WhatsApp, Instagram, and Messenger - each day.

Facebook Inc's (FB.O) stock fell as much as 24 percent after hours on Wednesday over concerns about the impact of privacy issues on the social media company's business, with executives warning that revenue growth would slow and expenses would rise.

Though Facebook said that the GDPR did not have a big effect on the quarter's revenue, but also noted that they were only in effect for about a month before the quarter ended. The company said headcount was 30,275 as of June 30 - an increase of 47 percent year over year.

That places Zuckerberg, who had been the world's third-richest person, at No. 6, below billionaires including Berkshire Hathaway's Warren Buffett, French business magnate Bernard Arnault, and Zara founder Amancio Ortega.

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