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Facebook’s ads business hit by Covid-19 pandemic despite surge in usage

Facebook’s ads business hit by Covid-19 pandemic despite surge in usage
April 20, 2020 suresh
  • Many of Facebook’s products, including Messenger and WhatsApp, have seen a spike in traffic as people stay home in regions hit hardest by the virus
  • But the services that are booming in popularity during the outbreak are not apps or products where Facebook has robust ad businesses

Facebook said its advertising business is taking a hit in some parts of the world as a result of theCovide-19pandemic, even as demand for information and messaging drives an “unprecedented” spike in usage for many of its services.

“Our business is being adversely affected like so many others,” the world’s largest social network wrote in a blog post. Many of Facebook’s products, including messaging and voice calls through Messenger and WhatsApp, have seen a dramatic increase in traffic as people stay home or remain isolated from friends, family and colleagues.

Messaging has jumped more than 50 per cent “in many of the countries hit hardest by the virus,” Facebook said, adding that voice calls in those regions have more than doubled. In Italy, where the coronavirus has claimed more deaths than any other country, time spent on Facebook products has soared by 70 per cent.

Still, those increases are not going to translate into more advertising dollars. The services that are booming in popularity during the outbreak are not apps or products where Facebook has robust ad businesses, meaning the company isn’t seeing a boost in sales from the surge in use. The company gets more than 98 per cent of its revenue from advertising.

Facebook is not the only online business to say advertising is being curbed by the virus. Twitter announced that its ads business is also hurting, even though it is also seeing record usage from people eager to get updates and news about the pandemic.

Twitter took the more concrete step of revising its first-quarter revenue guidance, and tossed out full-year expectations that it had shared with investors in early February.

Source: South China Morning Post

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