Facebook’s myriad political controversies overshadowed a strong financial quarter on Wednesday as the chief executive, Mark Zuckerberg, delivered an impassioned defense of his company on a conference call with investors.
The company reported strong revenue and profit growth for the third quarter of 2019, beating analyst expectations and prompting the share price to jump as much as 4% in after-hours trading. Revenues grew 29% year-over-year to $17.7bn, and profits grew 19% to $6.1bn.
Facebook also reported continued user growth, with 2.45bn monthly average users of Facebook, and 2.8bn across the company’s full stable of apps, which includes WhatsApp, Instagram and Messenger.
The strong business performance appeared almost an afterthought to Zuckerberg, however, as he delivered a lengthy and emotional defense of the company’s “principles”, particularly in connection to the ongoing controversy over its policies on political advertisements.
“Over the next year of the campaign, we’re going to be at the center of the debate any time there’s a policy that people believe may advantage their side,” he said. “I expect that this is going to be a very tough year.”
Facebook has been harshly criticized in recent weeks over its decision to exempt posts by politicians from its third-party factchecking program and to exempt ads by politicians from a policy banning false or misleading statements in advertisements.
“Some people accuse us of allowing this speech because all we care about is making money,” Zuckerberg said. But the controversy far outweighs the profit, he added. “We estimate that these ads from politicians will be less than 0.5% of our revenue next year … We believe deeply that political speech is important and that’s what’s driving us.”
Zuckerberg’s diatribe included rebuttals to several critical arguments that he attributed to “some people” or “critics”. He referenced critiques of the company’s algorithmic news feed, which amplifies certain content according to opaque calculations. Facebook has made “huge sacrifices” in order to weight the algorithm toward “meaningful interactions”, he asserted, including one change that reduced the amount of viral video that users were watching by 50m hours every day.
“Some people say this is all a cynical political calculation, that we’re just trying to appease conservatives – that’s wrong too,” he said. “Frankly, if our goal were to make either side happy, we’re not doing a very good job, because we’re making everyone frustrated with us.”
One group of critics that Zuckerberg did not address was his own employees, hundreds of whom have signed a letter objecting to the political ads policy.
The earnings call took place less than an hour after the Twitter chief executive, Jack Dorsey, announced that his company will ban all political advertising, in a tweeted statement that included multiple veiled critiques of Zuckerberg’s position.
Zuckerberg did not directly reference Twitter’s decision, but did say that he will continue to consider his position.
“Would we really want to block ads for important political issues like climate ads or women’s political empowerment?” he asked.
The day also saw the disclosure of another major foreign influence campaign using Facebook’s, and a shakeup to the company’s board of directors.
On Wednesday morning, the company announced that it was taking down three networks of inauthentic pages and accounts targeting eight African nations. The networks were linked to Yevgeny Prigozhin, the Russian businessman who has been indicted by the US government for his alleged role in backing the Russian troll farm that interfered in the 2016 US presidential election.
Zuckerberg argued the takedowns were a victory because they demonstrated the efficacy of the systems the company has built to detect inauthentic behavior. Some of the inauthentic accounts purchased ads from Facebook as early as May 2014.
Sue Desmond-Hellmann, Facebook’s lead independent director, announced her resignation from the company’s board on Wednesday. Desmond-Hellman is the CEO of the Bill and Melinda Gates foundation, and she cited “increasing demands from my CEO role, my extended family, and my own health” in a statement announcing her departure.
The company said the next lead independent director will be announced in the coming months.
