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Apple ruins Facebook’s party as they were suppose to benefit from Pandemic Ad

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Facebook Inc beats both Wall Street’s quarterly sales and profit estimates on Wednesday but warns that growth could ‘significantly’ decline later in this year as new Apple Inc privacy rules make advertising targeted more difficult.

An increase in digital advertising expenditure during the pandemic, along with higher ad costs, caused Facebook revenues to rise 48 percent. The world’s largest social network is looking forward to the creation of e-commerce features in order to grow beyond advertising.

In extended trade, Facebook’s shares grew 6.5% to $326.00.

“We have a long way to go to build out a full-featured commerce platform … but I am very committed to getting there,” Facebook Chief Executive Mark Zuckerberg told analysts on a conference call to discuss earnings.

In the first quarter ended March 31, the total revenues, which consist mostly of ad sales, reached $26.17 billion, which according to Refinitiv’s IBES data was estimated at $23.67 billion by analysts on average. The digital advertisement industries have boomed since the pandemic and Facebook and Google have benefited from its Tuesday record quarterly income, which was announced by its parent Alphabet Inc.

“Despite several headwinds – such as ongoing antitrust scrutiny, lingering privacy concerns, as well as looming changes which could negatively impact its advertising business – Facebook delivered another blockbuster quarter,” said Jesse Cohen, senior analyst at Investing.com.

The business wants to work on three main areas: enhanced virtual reality, e-commerce features, and support for content developers to make money on the Facebook sites. Zuckerberg said. Monthly Facebook-active users increased 10% to 2.85 billion.

Net earnings were 9.5 milliard dollars for the first year, or 3.30 dollars per share, compared with 4.9 billion dollars, or 1,71 dollars for each share, a year ago. A profit forecast of $2,37 per share was predicted by analysts. Facebook said its annual gross spending is between 70 billion dollars and 73 billion dollars, as it invests in consumer technology devices such as the Oculus virtual reality headsets and infrastructure.

APPLE CHANGES

On Wednesday, Facebook said it anticipates the changes in iPhone privacy will affect the second quarter, but sales growth in the third and fourth quarters could stall. Facebook has blast Apple for demanding the authorization of the customer to gather such ad information from iPhone app developers. Facebook maintains that the move would damage its operations and affect small businesses with customized ads.

Its drive to create Facebook and Instagram shopping and e-commerce services could offer the business extra sales and enhance its inventory of advertising. Recently, the company also introduced many new features, including a partner scheme to allow producers of content to generate a revenue cut resulting from Instagram’s recommended items.

Earlier this month, Facebook revealed that it was developing a host of audio product rivals to the popular Clubhouse app plus music and podcast players, including live audio rooms. The corporation is under investigation and its contents and algorithmic processes and data processing are subject to substantial counter trust proceedings by a wide group of U.S. states and the federal trading commission and are regularly fired by legislation and rights organizations.