Facebook’s messaging apps are more important than ever as revenue growth stalls
Facebook’s global expansion continues unabated, as the company now reports that at least 2.26 billion people use at least one of the company’s family of mobile apps or its website at least once a day, while 2.89 billion do so at least once a month.
Those numbers are up 11 percent and 9 percent, respectively, from this time a year ago, and the daily figure represents the greatest growth among the the collection of stats the company typically touts every quarter, which also the number of people who use the main Facebook service every day and every month. Those figures only grew 9 and 8 percent, respectively.
More pressing, however, is that while Facebook’s user growth remains steady, the same cannot be said for its revenue and profit. Facebook still makes money hand over fist, of course, but the future of the business depends on finding ways to make more money from those new users, and that doesn’t appear to be happening even as Facebook can say more people use its products than ever before. Profit growth this past quarter compared with the fourth quarter of 2018 was only 7 percent, compared to the whopping 61 percent jump Facebook experienced a year ago.
Facebook has only in recent quarters begun touting that more holistic DAP metric, for family “daily active people,” which the company has said is a more accurate measure of its growth. That’s because a majority of new users don’t tend to use the Facebook website all that much anymore, or even the Facebook mobile app all that much.
Instead, users are more likely, at least on a daily basis, to log into Facebook Messenger, Instagram, or WhatsApp. As a result, Facebook’s main platform has faded into background for many younger users, and it’s no longer the dynamic revenue-driver it used to be.
For Facebook’s business, the DAP metric and its high visibility in earnings reports is also indicative of how the social network sees its future: increasingly private and messaging-related, with less of a focus on public-facing and traditional social network platforms. That tracks with CEO Mark Zuckerberg’s big shift in vision for the company announced last year, in which he said Facebook would shift toward a privacy-focused, encrypted messaging platform with a unified back end spanning Instagram, Messenger, and WhatsApp.
Overall, Facebook recording sales of just over $21 billion for the fourth quarter of 2019, which ended December 31st, and a profit of $7.35 billion. Both those figures just narrowly beat analyst expectations, but the company’s shares are down more than 7 percent in after-hours trading. That’s due in part to Facebook’s rate of growth, which is still impressive but slowing down considerably, with more and more of its profit potential now dependent on Instagram and its other messaging platforms.
Facebook’s global expansion continues unabated, as the company now reports that at least 2.26 billion people use at least one of the company’s family of mobile apps or its website at least once a day, while 2.89 billion do so at least once a month. Those numbers are up 11…
