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For a few quarters. They'll survive and be back where they are now when the economy bounces back (whenever that may be). They could take a 100% cut for several
by dx034 7y ago
For a few quarters. They'll survive and be back where they are now when the economy bounces back (whenever that may be). They could take a 100% cut for several quarters without cutting expenses. Small ad companies are the ones that will really suffer. They don't have Google's deep pockets and diversification.
- frockington1 7y agoFacebook will be in a great position with people having more and more phone time due to the quarantine. Might be a short term hit but a big boost down the road
- AznHisoka 7y agoMaybe I am missing something, but how will it be a big boost? Most users who use Messenger, Instagram and FB already are familiar with the platform. Them using it more during the lockdown is not introducing them to new features or new content. It is unlike a product like Netflix, where you delve more into their content (ie international stuff u may have not ventured in) or Zoom, which some ppl may not have known about previously.
- dx034 7y agoFacebook doesn't live off views, they live off ad spend. Unless people continue to use it more when they have to go back to work, I don't believe FB will profit here.
- CydeWeys 7y agoBig tech companies like Google and Facebook are seeing record usage (i.e. increased costs) at exactly the same time that advertising revenue is plunging. YouTube watches are at record highs while pays per view might be at record lows. This just means that the expenses go up even as revenue falls. It's not a good thing for profitability.
- nostrademons 7y agoThat's why they've stockpiled $105B and $55B in cash respectively, though. Facebook could run the company for 1.5 years if their revenue went to zero; Google could run it for 2 years. They know how the business works and position themselves to weather and profit from downturns. Some weaker shareholders may sell if they're only interested in quarterly numbers, but in the long term their revenues go back up to what their userbase justifies.
- DeathArrow 7y agoUntil then people might learn that an online experience without ads is possible.
- Noos 7y agountil a lot of the sites go belly up, as well as many of their content creators.
- CydeWeys 7y agoThe current online experience is not remotely possible without ads. I'm willing to wager that the vast majority of content that you consume online is advertising supported, not directly supported by you. All of that is gonna start going away without advertising revenue.
- banads 7y ago>The current online experience is not remotely possible without ads The current online experience is horrendous because of the ad industry.