Revenue from advertisements Facebook's revenue rose more than 45 percent in the first three months of 2020 to $25,4 billion — or about seven times what Twitter earns in a full year.
But the company sees some potential problems on the horizon that could limit its continued growth: regulators are looking into its ad-tracking practices, as well as a feature that launched this weekteam from Apple could harm its ability to target ads.
"We still expect increased difficulties for ad targeting in 2021 from changes in regulation and platforms," said Facebook CFO Dave Wehner in announcement company profits for the first quarter of 2021.
Wehner cites iOS 14.5 as an example, which has a feature that allows iPhone and iPad users to easily stop watching in certain ways.
Facebook, however, believes that its advertising revenue will continue to increase for the rest of 2020 even with these changes, but predicts that there will be a slowdown in the second half of the year. The company says that Apple's regulators and changes will play an important role.
The new update requires applications like Facebook to proactively ask users for their consent to be tracked for advertising purposes.
Facebook and other companies expect many people to refuse tracking, which will impair their ability to use targeted ads. Facebook said the operation was a threat to businesses based on these ads.
"Apple's latest update threatens personalized ads that millions of small businesses rely on to find and reach customers"
In a statement to investors, Facebook executives said the company is working on improvements to technology of its ads that will allow for better ad targeting and that it will need access to fewer data. Facebook COO Sheryl Sandberg described it as a "reconstruction" of the company's technology.
Meanwhile, the European Union's data protection team has proposed banning web-based ad targeting. European lawmakers are planning a major overhaul of digital market regulation, and Facebook could come up with fewer tools for targeting ads to individual users.
But for now, Facebook continues to grow. Daily users in all Facebook products reached 2,72 billion, up from 2,6 billion at the end of the previous quarter, while monthly users reached 3,45 billion.