Can Data Lie? Social Media Titans’ Super-Speed Recovery and the Pervasive Disputes (Ⅰ)
Since the outbreak of the global epidemic, many people have coordinated relevant policies and refrained from going outdoors, which has objectively contributed to an acceleration in the shift of commerce from offline to online, especially for social media. Through the network, people can, to a large extent, satisfy their social needs, which promotes the significant growth of data such as the number of users and the online time.
In the midst of the crucial earnings season, major listed technology companies will report their Q3 earnings in October or November. The reported earnings from the three social network titans, Facebook, Twitter and Snapchat, basically meet the optimistic expectations of the industry.
But the new problem is that the growing ratings of traditional TV programs does not mean a pick-up in the advertising market. In the same way, can the rising earnings show that these social network giants, whose negative issues have frequently come to light, have tided over their difficulties?
The Rising Earnings of the Three Overseas Social Network Titans
The earnings report can reflect a company’s performance at a certain phase. Judging from the earnings, the three leading companies in the social sector, Facebook, Twitter and Snapchat, have performed very well in terms of their revenues, net profits and daily active users.
Facebook’s revenue totaled $21.47 billion, $16.3 billion-stronger-than-expected revenue ($19.84 billion) and an increase of 22% year over year. Generally, advertising is often the main source of revenue for social platforms, with Facebook generating $21.22 billion in advertising revenue.
In terms of the net profit, Facebook ushered in a larger increase after its poor performance in previous quarters, hitting $7.846 billion and far exceeding that in the second quarter and first quarter, respectively $5.178 billion and $4,902 billion.
With regard to the daily active users, Facebook daily active users (DAUs) were 1.82 billion on average and monthly active users (MAUs) were 2.74 billion in the third quarter, both an increase of 12% year-over-year, outperforming the market expectation.
Concerning the number of users, as an established social media, Twitter is not in the same magnitude as Facebook. The third quarter saw a growth of 35 million in Twitter’s number of users, reaching 187 million, slightly lower than the market expectation. However, Twitter’s revenue was $936 million, up 13.59% year-on-year, of which advertising revenue reached 880 million, up 15% year-on-year.
What is more noteworthy is that Twitter’s Q2 net profit was US$1.228 billion, and enjoyed a turnaround in the third quarter, making a profit of US$02.9 million, which largely benefited from the booming advertising industry.
Snapchat, which has a younger and more vertical user group, had a revenue of US$678 million, a year-on-year increase of 52% and up by 49% compared with Q2 revenue. The number of daily active users reached 249 million, an increase of 18% over the same period last year, exceeding market expectations. In terms of user retention, the total daily video viewing time of Snapchat users increased by more than 50% year-on-year. The increase in user retention serves as an important support for Q3 revenue growth. Thanks to the excellent data performance, Snapchat’s shares surged 24% after its earnings release on October 20.
Due to the impact of the epidemic, many companies made a drastic cut in the advertising budget in the first half of 2020. Nevertheless, as the epidemic tended to get better and work resumption began, the advertising demand rebounded in the third quarter and the advertising industry gradually recovered. At the same time, owing to the U.S. election, the demand for advertising by major agencies increased. Therefore, the advertising business of Facebook, Twitter and Snapchat all recovered after experiencing a decline in the first two quarters. It is understood that in the conference call, Facebook even made an optimistic forecast that its Q4 revenue would achieve further growth.
In any case, the three giants have delivered an earnings report that satisfied both themselves and the stock market.
Though the three social media reported a good performance, their disputes have lodged themselves in the public mind.
With a significant growth in the revenue and user activity, the “three titans” showed a prosperous scene. However, their images in users’ minds cannot be quickly reversed as the performance. The past and ongoing disputes are still deeply rooted in the public mind.
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