RATES GOING UP.
THAT IS WHAT IS HAPPENING.
THERE IS BALANCING.
BEFORE WE GO ANY FURTHER,
GETTING THE FACEBOOK NUMBERS.
GO AHEAD TO NICOLE.
>> LOOKING AT THE MOBILE
ADVERTISING REVENUE.
THAT IS REALLY KEY.
THAT WAS 91% OF ADVERTISING
REVENUE.
THAT IS GOOD NEWS THERE.
YOU CAN SEE FACEBOOK, DAVID AND
MELISSA, IT IS UP, GAINING OVER
THE LAST 60 SECONDS.
I PEEKED.
IT WAS UP QUARTER OF A PERCENT,
NOW UP ONE 1/4% HERE, REVENUE,
11.97 BILLION.
THAT BEAT ESTIMATES.
EARNINGS PER SHARE WHICH ALSO
BEAT AT 169 VERSUS 1.35.
FACEBOOK SAYING WE'RE TAKING
BROADER VIEW OF OUR
RESPONSIBILITY.
THAT IS ALL ABOUT CAMBRIDGE
ANALYSTCA.
INVESTING TO MAKE SURE OUR
SERVICES ARE USED FOR GOOD.
BACK TO YOU.
MELISSA: OKAY.
JONATHAN, DEEDER, TODD ARE BACK
WITH US, MICHAEL NUNEZ, MASHABLE
DEPUTY TECH EDITOR.
MICHAEL, I WILL START WITH YOU.
THESE GUYS, THEY'RE CLASSIC
SANDBAGGERS.
THEY BEAT ON THE TOP AND BOTTOM
LINE EIGHT QUARTERS IN A ROW.
THEY'RE VERY GOOD ESTIMATING
WHERE THEY ARE COMING IN AND
BEATING IT BY A LITTLE BIT.
WHAT IS IT YOU'RE REALLY FOCUSED
ON IN THIS REPORT?
WHAT ARE YOU LISTENING FOR?
>> EVERYBODY KNOWS FACEBOOK WILL
MAKE A LOT OF MONEY.
THEY ARE ONE THE PREMIER
ADVERTISING PLATFORMS OUT THERE
ALONG WITH GOOGLE.
THAT IS REALLY NO SURPRISE.
WHAT MOST PEOPLE ARE WATCHING
FOR USER ENGAGEMENT.
THE RISK INVOLVED IN CONSUMER
TRUST OR USER ENGAGEMENT,
WHETHER PEOPLE USE FACEBOOK
REGULARLY, SPENDING HOURS EVERY
SINGLE DAY ON THE NETWORK THAT
BRINGS THIS PLATFORM VALUE IN
THE LONG RUN.
MELISSA: JONATHAN, THEY MAKE
GREAT MONEY.
91% OF THEIR REVENUE COMING FROM
MOBILE ADS.
I REMEMBER A TIME THEY WERE
SAYING ARE THEY GOING TO BE ABLE
TO STANCE SIGNIFICANCE INTO
MOBILE BUT IS THE QUESTION
REALLY HOW MANY PEOPLE WENT
ALONG WITH THAT DELETE FACEBOOK
HASHTAG?
>> TRANSITION TO MOBILE OR EVEN
TRANSITION TO VIDEO ON THE NEWS
FEED.
THAT IS PART OF THE FACEBOOK
SUCCESS EXACTLY AS YOU SAID.
THEIR ABILITY TO TRANSITION,
WHERE THEY GO FROM HERE I THINK
DEPENDS IRONICALLY ON
GOVERNMENT.
THE STOCK HAD A BIG DECLINE FROM
BASICALLY 180, DOWN TO 150 ONCE
THE GOVERNMENT INVESTIGATIONS
STARTED.
I WILL LISTEN AND REVIEW THE
CALL CLOSELY TO SEE IF ANY
MENTION MADE OF POTENTIAL
GOVERNMENT INTERVENTION,
REGULATION, THAT COULD SPELL
REAL DISASTER FOR THE STOCK
BASICALLY NO MAN'S GIVEN THE
BEAT.
MELISSA: MONTHLY AVERAGE USERS
FIRST QUARTER UP 13%
YEAR-OVER-YEAR.
HOW DO YOU FEEL ABOUT THE
NUMBER?
>> I THINK THE NUMBER IS FINE,
MELISSA.
DON'T SEE A NUMBER WITH
FACEBOOK.
I THINK REGULATIONS THEY WILL
GET, BENEFIT THEM LONG TERM AS I
SAID LAST WEEK.
SOMEWHERE DOWN IN THE AREA I
THINK PROBABLY A BUY.
LOWEST I SEE IT GOING INTO THE
LOW 140s.
AT END OF THE DAY THEY MAKE A
LOT OF MONEY, THEY WILL CONTINUE
TO MAKE A LOT OF MONEY.
THE SPENCE OUTLAY TO MAKE THAT
MONEY IS NOT HIGH SO I THINK
THEY WILL BE FINE GOING FORWARD.
MELISSA: YOU BRING UP A GREAT
POINT.
DEIRDRE, YOU TALK ABOUT THE
EXPENSE OUTLAY, ANOTHER STAT,
HEADCOUNT UP 48% YEAR-OVER-YEAR.
THAT WILL HAVE TO GO EVEN
HIGHER, RIGHT?
>> IT CERTAINLY WILL.
WE HEARD FROM MARK ZUCKERBERG
SAYING HE WOULD ADDING 10,000
HUMANS, ENGINEERS, FLESH AND
BLOOD, RIGHT, TO COMBAT SOME OF
THE ISSUES.
FACEBOOK HAD A ONE-TWO PUNCH TO
THE GUT BEFORE THE PRESIDENTIAL
ELECTION IN 2016, RIGHT?
WE REMEMBER THE STATISTIC
125 MILLION AMERICANS SAW AN AD
ON FACEBOOK THAT WAS EITHER
MANIPULATED BY OR GENERATED BY A
RUSSIAN BOT.
THAT WAS STRIKE ONE.
STRIKE TWO WAS 87 MILLION PLUS
PEOPLE DATA SHARED WITH
CAMBRIDGE ANALYTICA.
FACEBOOK MOST CERTAINLY NEEDS TO
HIGHER, THE FACT THEY'RE ADDING
HUMANS, NO MATTER HOW GOOD THE
ALGORITHMS ARE, NO MATTER HOW
GOOD THE ARTIFICIAL INTELLIGENCE
TOOLS THEY'RE BUILDING, THERE
NEED TO BE PEOPLE, GOOD
OLD-FASHIONED HUMANS IN THE MIX.
FACEBOOK WILL HAVE TO SPEND
MORE.
WE WILL THINK I FOR THE REST OF
THE YEAR SEE SOME OF THE PROFIT
MARGINS COME IN.
THE COMPANY HAS BEEN VERY VOCAL,
MARK ZUCKERBERG HIMSELF, ABOUT
SPENDING MORE.
HE SAID ESSENTIALLY AN INCREASE
IN EXPENSES WILL HAPPEN THIS
YEAR.
HE HAS BEEN TELEGRAPHING THIS AS
MUCH AS POSSIBLE.
ABOUT THE U.S. DIGITAL MARKET, I
WANT TO POINT OUT, WE WERE
TALKING ABOUT THAT EARLIER,
FACEBOOK AND GOOGLE TOGETHER
HAVE 2/3 OF THE U.S. DIGITAL AD
MARKET.
THAT IS A 90 BILLION-DOLLAR
MARKET.
2/3 SHARED BETWEEN TWO PLAYERS.
THIS POSSIBLE AD NUMBER OF
FACEBOOK.
MELISSA: ALL I HEARD WAS NEXT.
SO I WILL GO TO THIS.
DO USERS STILL TRUST FACEBOOK.
WE HIT THE STREET TO FIND OUT.
>> DO YOU FEAR FACEBOOK COULD BE
TAKING YOUR DATA OR INSTAGRAM
COULD TAKE YOUR DATA?
>> A LITTLE BIT.
>> I KNOW THEY WERE STEALING MY
DATA.
>> I DON'T THINK IT IS CLEAR
WHAT THEY WERE USING THE DATA
FOR.
>> WOULD YOU CONSIDER DELETING
YOUR FACEBOOK?
>> NO.
>> I WOULD TAKE IT INTO
CONSIDERATION.
>> IT IS UNDER CONSIDERATION.
>> I ACTUALLY WANT TO DELETE IT.
MELISSA: HMMM.
VERY INTERESTING.
MICHAEL, WHAT DO YOU WAN TO
THINK ABOUT THAT?
>> I THINK REALLY NO SURPRISE TO
ME.
A LOT OF PEOPLE, ESPECIALLY MY
AGE, PEOPLE GROWN UP WITH
FACEBOOK ARE REALLY
RECONSIDERING THEIR RELATIONSHIP
WITH THE APP ESPECIALLY AFTER WE
FOUND OUT SORT OF WHAT FACEBOOK
HAS BEEN DOING WITH OUR DATA.
IT IS NOT AS EASY AS ALWAYS
OPTING INTO SOMETHING.
MELISSA: YEAH.
>> IN FACT THERE WAS A PERIOD OF
TIME WHERE PEOPLE WERE ABLE TO
OPT IN FOR YOU.
SEEMS LIKE THAT MESS STILL
HASN'T BEEN CLEANED UP.
MELISSA: DEIRDRE, WHAT IS SO
IRONIC ABOUT THIS, THE YOUNG
PEOPLE WHO DON'T CARE ABOUT
PRIVACY ALREADY MOVED AWAY FROM
FACEBOOK.
THEY WERE ALREADY DOING
EVERYTHING ELSE.
MAYBE THE PROFILE WAS STILL UP
BUT NOT SPENDING A LOT OF TIME
THERE.
IT WAS OLDER PEEP, THEY GOT OFF
BECAUSE THEIR GRANDMOTHER WAS ON
THERE.
THOSE PEOPLE ARE SPOOKED BY WHAT
HAPPENED, RIGHT?
>> INDEED.
WE AS CONSUMERS AND AS DIGITAL
MEDIA USERS HAVE TO KNOW, IF
YOU'RE NOT PAYING FOR THE