After months of scandals and scrutiny, Facebook’s year just got worse: the social media giant has reported its first drop in European daily active users since 2009.
Facebook’s European DAU dropped 1% in Q2, down from 282m to 279m. Monthly active users were also down, though to a lesser extent, with a 1m drop from Q1 to 376m in Q2.
Consequently, Facebook’s total DAU has fallen short of expectation. Although the company saw 1.47m users on average for June 2018, an 11% year-on-year increase, it’s fallen short of the 1.49m shareholders were expecting.
Facebook also missed its total revenue expectations for the first time since 2015, despite a 42% year-on-year increase to $13.2bn.
As a result, the company’s share price fell over 20%, wiping as much as $140bn off its value in one of the largest after-market drops ever. Following Facebook’s briefing call, shares were trading at $172 each against a closing price of $217.50.
During the briefing call, Facebook’s chief financial officer, David Wehner, predicted that revenue growth would continue to slow in the second half of the year, though Facebook does not blame the forecasts on fallout from the Cambridge Analytica data scandal.
Cambridge Analytica, which announced its closure in May, stands accused of improperly harvesting the personal Facebook data of up to 87 million Facebook users on behalf of political clients.
However, Wehner attributes the revenue decline to other factors, including new advertising formats and investment in privacy.
“We plan to grow and promote certain engaging experiences like Stories that currently have lower levels of monetisation, and we are also giving people who use our services more choices around data privacy, which may have an impact on our revenue growth,” he said.
Earlier this year Facebook announced plans to develop a new Clear History tool, and has been conducting investigations into apps potentially misusing user data – most recently suspending US-based analytics firm Crimson Hexagon.
