Whistleblower controversies weren’t able to slowdown Facebook (FB) last quarter. The social media giant reported Q3 earnings yesterday, posting a year-over-year gain of 17% in net profits thanks to an increase in daily active users and strong advertising sales.
Earlier this month, ex-Facebook employee Frances Haugen spoke before the US Congress after leaking thousands of internal company documents. Haugen told the senators that Facebook’s algorithms are designed to promote posts with high levels of user engagement (aka user outrage). She went on to point out that it’s often harmful and divisive content that sparks a high level of user engagement, and that by promoting this content Facebook is deepening social divides.
Facebook is used to having a target on its back and hasn’t been discouraged by the whistleblower. Advertising sales rose by 33% for the quarter, while revenue from other sources rose by 195%.
why it matters
One of the big takeaways from Facebook’s Q3 earnings report was that it will now break out its Facebook Reality Labs as its own separate financial reporting segment. Facebook Reality Labs is the vessel through which Zuckerberg wants to create the “metaverse” (how many times have we heard him bring this up lately?) and will receive at least a $10b investment from its parent company this year.