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Facebook, Messenger And WhatsApp Use Soars While Advertising Declines In Pandemic Hit Countries

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Facebook Inc.’s (NASDAQ: FB) apps are experiencing a surge in user activity in pandemic hit countries, and the social media giant says maintaining stability during spikes is “challenging.”

What Happened

As more people around the globe practice social distancing, while others are now required to shelter in place, there has been a rise in the use of Facebook-owned apps.

On Tuesday, the company released a statement co-authored by Alex Schultz, Vice President of Analytics, and Jay Parikh, Vice President of Engineering, saying that in countries hit hardest by the disease, total messaging has increased more than 50% compared with last month.

Voice and video calling have doubled on Facebook Messenger and WhatsApp, a free messenger app for smartphones.

People in Italy have been spending 70% more time across Facebook’s apps since the COVID-19 crisis began. Instagram and Facebook Live views have doubled in Italy, while messaging has risen over 50%. Group calls with three or more participants have increased by 1000% during the last month, according to Schultz and Parkih.

Italy is one of the worst affected countries with 54,030 infected and 6,829 deaths as of Tuesday evening, according to Italy’s Ministry of Health.

Why It Matters

Calling the increased traffic due to COVID-19 “unprecedented,” Schultz and Parikh wrote, “ Our services were built to withstand spikes during events such as the Olympics or New Year’s Eve. However, those happen infrequently, and we have plenty of time to prepare for them.” The Vice Presidents noted that new records in usage were now being experienced daily at Facebook.
As most of Facebook’s employees work from home, maintaining stability is more challenging for the company. Facebook is now giving priority to features such as its COVID-19 Information Center and the World Health Organization’s Health Alert on WhatsApp.

Facebook is monitoring usage patterns carefully, making systems more efficient, adding capacity as required. It is also conducting testing and preparing to respond to any problems that may arise.

On questions about revenue, Schultz and Parikh said that traffic increase is primarily in messaging, but also in feed and stories products. Facebook does not monetize many of its services where there is increased engagement. There has been a weakening in Facebook’s ad business in countries where aggressive actions are being taken to reduce the spread of the pandemic.

Price Action

Facebook shares traded 2.47% lower at $157 in the after-hours session on Tuesday. The shares had closed the regular session 8.70% higher, at $160.98.

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