Facebook Inc.’s first-quarter earnings report on Wednesday was an encapsulation of the two sides of the company: the unscrupulous internet citizen and the genius at making money.

Facebook disclosed that it set aside $3 billion related to an expected U.S. Federal Trade Commission crackdown on the company for violating promises to protect user privacy. The FTC inquiry, which is continuing, stemmed from the revelations last year that political consulting firm Cambridge Analytica tapped information on millions of Facebook users. The social-media giant estimated it will cost as much as $5 billion to resolve the inquiry. 

Not that we needed a reminder, but this new regulatory expense underscores Facebook’s unending drama about its creepy data hoarding and ad targeting; its sometimes-callous disregard toward information on its users; and its missteps in dealing with calls to violence, attempted election manipulation and other abuses of its internet hangouts. 

That’s the real Facebook — the unreliable steward of some of the most widely used communication and information-distribution tools the world has ever seen.

But the other side that Facebook showed late Wednesday was also real. For years, Facebook has proved incredibly adept at making money and staying on top of changing internet trends.

Yes, Facebook’s revenue growth is slowing significantly, and it has acknowledged that it’s running out of ways to make money from its blockbuster business of tucking personalized commercials in between streams of posts on Facebook and more recently on its Instagram app. But a reported growth rate of 26 percent and operating profit margins above 40 percent are enviable for a company of Facebook’s size.


In the U.S. and Canada, Facebook on average generated more than $39 in revenue for each person who uses Facebook and its Messenger app at least once a day.(1) That’s more than Netflix Inc.’s average quarterly revenue from each of its U.S. subscribers — but without the need to spend billions of dollars on programming. Compare that with the smaller Twitter Inc. and Snap Inc., which generated an average of $15.44 and $2.81, respectively, from domestic users in the first quarter. (The companies’ methodologies differ, but you get the idea: Facebook makes a boatload.)

The dichotomy between “internet cesspool Facebook” and “perpetual money-machine Facebook” begs a question: Is Facebook exceptional at making money in spite of being a data hog, an unscrupulous repository of personal information and a poor overseer of the internet’s high-stakes tools? Or is Facebook exceptional at making money because of those qualities?

I hope it’s the former. I worry it’s the latter. 

Given Facebook’s softening-but-still-incredible financial results during its two years of terrible headlines and political scolding, it’s tempting to conclude nothing matters. Facebook users and advertisers may feel terrible about the company, but they keep coming back for more because they don’t care what happens to user data or that Facebook is a home to violent extremists or is a favorite tool of foreign propagandists.

The trouble is, we can’t rerun history. Maybe absent two years of crisis, Facebook would be even bigger, more widely used and richer than it is now. (It would be at least $3 billion more profitable.) Maybe Facebook wouldn’t be looking under every rock now for fresh revenue sources, and shifting into private messaging, if it hadn’t been through Russia investigations, Myanmar violence, political missteps and data leaks.


Facebook is a financial powerhouse, but it’s also not true that nothing that happened to Facebook has hurt or mattered at all. At least, that’s what I tell myself.

A version of this column originally appeared in Bloomberg’s Fully Charged technology newsletter. You can sign up here. 

(1) Facebook’s disclosed average revenue per user was $30.12 for the U.S. and Canada in the first quarter, but that’s based on the company’s average monthly users -- a figure Twitter and Snap do not disclose. I calculated this figure from Facebook’s reported revenue from users in the U.S. and Canada and the company’s average daily users in those countries.Snap and Twitter calculate their daily user average differently than Facebook does and include different countries in their counts for “domestic” revenue and users. Twitter also says its number for daily users is not comparable to those of other internet companies. Bottom line: The numbers may not be entirely comparable, but they’re close enough.

To contact the author of this story: Shira Ovide at sovide@bloomberg.net

To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.

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