Will Facebook Overcome Its Problems In Q3 Results?

Investors have their anxious eyes on Facebook this Tuesday (October 30), as the social media operator plans to report third-quarter 2018 results after the market close. The company suffered its biggest one-day market value loss in July on warnings of slow growth for the rest of the year.

“Facebook shares have yet to recover, with the stock price down roughly 35 percent from July 25 as of Monday evening,” read a report from The Wall Street Journal on Tuesday. “The company’s falling share price could have an outsize effect on internal morale, especially when coupled with near-relentless external criticism of Facebook’s products, current and former employees have said. Investors will be watching closely to see if Facebook’s outlook shifts significantly.”

Among the areas for investors to focus on? Advertising. “One key factor shaping Facebook’s financial future is advertising demand for its Stories product, which allows users to post photo and video montages that disappear after 24 hours across its app,” the report said. “Facebook executives expect more people to use Stories than browse the Facebook news feed next year.”

In a PYMNTS column this week, Karen Webster wrote that Facebook faces a significant challenge from “hate speech,” which will turn off advertisers. “Facebook leadership underestimated the role that platform governance plays in keeping platforms alive and thriving — and it may be too little, much too late to turn things around,” she wrote. “Although the vilest voices on its platform are a small minority today, they may be loud and horrible enough to drive its future in a very different direction than it has long intended.”

She pointed out that while the social media platform removed 837 million pieces of spam in Q1 2018 before anyone reported it and disabled 583 million fake accounts “within minutes” of going online, company executives have acknowledged that their technology “still doesn’t work that well” when it comes to hate speech, requiring manual intervention to review and act upon.