Facebook revenue disappoints as new-user growth slows

Facebook Inc. stumbled through another rocky quarter, struggling to add new users in key markets and the social media giant continues to face a public backlash over privacy and political interference on its platform.

The company has had a tumultuous year as it has had a number of years of experience. Its shares have grown more than 30 percent since July, after the company's growth and growth, and its share of the company's privacy and security issues.

Since then, Facebook has revealed a mbadive data breach, the discovery of the new Iranian and Russian foreign influence networks on the platform, and the recent departure of several key executives.

"This has been a tough year," chief executive Mark Zuckerberg told badysts conference call on Tuesday.

Facebook added 24 million new daily users in the third quarter, with the fastest growing coming from India, Indonesia and the Philippines. Goal user growth in the United States and Canada remained flat at 185 million daily active users. Facebook lost one million users in Europe in the quarter. Chief Financial Officer Dave Wehner has been badigned to the European Union earlier this year.

The company has added a number of new users to its key North American markets for the past three quarters and has lost a total of four million daily European users this year. Those are Facebook's most lucrative advertising markets. The social media firm earned more than US $ 27 per person in the United States and Canada in the quarter, compared with US $ 3 in Europe and North America.

Advertising revenue hit US $ 13.73-billion in the three months ending in September, up 33 percent from the same period last year, but slightly below what badysts had expected. Profits in the form of diluted earnings per share rose roughly 10 percent to US $ 1.76, beating expectations.

Mr. Zuckerberg blamed Facebook's slowing growth largely on the company's efforts to shift users away from consuming them, or to share with friends and family.

Users are more likely to interact with each other in private messages or temporary messaging services, rather than through public posts, he said. Facebook owns two private messaging apps, Messenger and WhatsApp, and has introduced Stories – posts that disappear after 24 hours – on Facebook and Instagram, along with a similar service called Status on WhatsApp.

But Mr. Zuckerberg has struggled against the company's main profit engine, its news feed. "It will take some time for our business to catch up to our growth," he said.

He also cautioned that Facebook's advertising business "can be close to saturation" in mature markets such as the United States, even as it continues to grow rapidly in lucrative developing markets.

Company officials braced investors for even more challenges next year, with revenue growth expected to slow "by a mid-to-high single-digit percentage" Mr. Wehner said, while expenses will continue to climb.

Investors and badysts were told that this is the first time that Facebook's efforts to fix its privacy would be cut into the company's bottom line. Facebook has said it's going to invest in security and privacy scandals, including doubling its security workforce to 20,000.

Mr. Zuckerberg said he would like to know more about "significant investment" in automated tools and content moderators.

The social media giant has dealt with a fresh series of privacy and security challenges in recent months. It has been purged of political intelligence in the United States and Russian military intelligence services that have been spread politically motivated in the US and abroad.

In september, Facebook revealed hackers had been able to exploit bugs in the platform of 30 million Facebook users. The data breach is the most significant in the company's history, and could bring it into play in the European Union, under the heading of the European Union.

Still, investors were more pleased with this time for the company's disappointment and some badysts saw the results as a positive sign. "It was a pretty good quarter and everybody was expecting a disaster," said Ivan Feinseth of Tigress Financial Partners.

Pivotal Research Group 's Brian Wieser who has a sell rating on Facebook, said the company' s financial results "did not persuade us that the company has a handle on the operational problems it faces" with privacy and security.

Facebook's share price closed at $ 146.22, up nearly 3 percent.