So why did Facebook’s share price take a nose dive?

Slowest-ever user growth rate – Facebook’s monthly user count grew just 1.54, compared to 3.14 last quarter. Daily active users grew even slower at 1.44 percent, compared to 3.42 percent last quarter. Suddenly hitting this wall could limit Facebook’s total user count over the long-run, and its revenue with it.

Decelerating revenue growth – Facebook’s revenue grew a remarkable 42 percent year-over-year this quarter. But CFO David Wehner warned that metric would decelerate by high single-digit percentage per quarter over the coming quarters. Wehner said a combination of currency headwinds, new privacy controls and new experiences like Stories will contribute to the deceleration. This news is what caused Facebook’s share price to drop from -7 percent to -20 percent.

The shift to Stories – Facebook estimates that by 2019, sharing via ephemeral vertical Stories slideshows will surpass sharing via feeds. The problem is that advertisers may be slower than users to make that shift. “Will this monetize at the same rate as News Feed? We honestly don’t know,” COO Sheryl Sandberg said. Stories ads might be full-screen and more immersive, but they don’t show off links to online stores, nor are they as well-optimized from decades of banner ad experience by the industry.

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