While traffic surges on Facebook, with messaging up 50% from last month in many countries, their now-remote workforce struggles to handle its own IT snafus
in 2020, GOOG will generate $54.3B operating income (43% margin) and FB will pull in $33.7B (49% margin), per revised forecast by Cowen & Co. https://variety.com/... Shira Ovide / @shiraovide : Facebook states the obvious: More people are using its services, but it's not necessarily translating into more advertising revenue. The good news: Facebook, unlike many of the businesses that are its ad buyers, can afford to wait out a few fallow months. https://twitter.com/... Tanay Jaipuria / @tanayj : Change in Facebook usage in affected countries with COVID-19: • Messaging up 50% m/m • Voice and Video Calling up 100% m/m • Weakening in ads business with less demand from businesses and increased engagement largely on non-monetized services https://about.fb.com/... Geoffrey A. Fowler / @geoffreyfowler : Reading this Facebook press release today, does it actually say its use in the U.S. is up? https://about.fb.com/... Last week, Verizon said social traffic across its U.S. network was flat week over week as of the 16th. https://www.verizon.com/... https://twitter.com/... Rich Greenfield / @richlightshed : $FB — Facebook needs to figure out how to monetize “live” “Instagram and Facebook Live views doubled in a week” “we've seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19” https://about.fb.com/... Alex Heath / @alexeheath : The Facebook services seeing exponential growth right now (video calling, live video) aren't monetized, which puts FB in an interesting spot @narimangharib : “In Italy, specifically: We've seen up to 70% more time spent across our apps since the crisis arrived in the country. Instagram and Facebook Live views doubled in a week. ” https://about.fb.com/... https://twitter.com/... Cristiano Lima / @viacristiano : Facebook says it's seeing “a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.” https://twitter.com/... Rat King / @mikeisaac : this blog post of theirs is, in effect, a warning that even today's enormous internet traffic periods are only a signal of whats to come as more of the world goes into quarantine Facebook's apps may even go down as it struggles to handle the surge. https://about.fb.com/... Tara McGowan / @taraemcg : “More than half the articles being consumed on @Facebook in the US were related to the coronavirus.. Overall US traffic from Facebook to other websites also increased by more than 50% last week from the week before..owing to intense interest in the virus” https://www.nytimes.com/... Andy Kroll / @andykroll : Sure would love to know more details about what goes into Facebook's “news ecosystem quality” score... https://www.nytimes.com/... https://twitter.com/...
Context & Ripple Effects
Facebook enters the crisis with a paradox its own numbers expose: messaging up 50% month-over-month and voice/video calling up 100% in affected countries, yet ad demand from the businesses that fund the platform is weakening. Analysts are marking the gap down on paper — Cowen & Co. now models $33.7B in 2020 operating income for Facebook against Google's $54.3B, both revised.
The strain isn't just commercial. A week earlier, Zuckerberg said Facebook had to shift content moderation to full-time staff because it couldn't extend mental-health support to contractors working remotely — and now the same distributed workforce is fighting internal IT snafus while traffic spikes.
First-order effects
- Facebook's ad buyers — many of them small businesses hit by COVID-19 — are pulling back spend, so record engagement translates into falling rather than rising ad revenue right now.
- Facebook's newly remote workforce is absorbing operational drag: internal IT failures land precisely when the platform's traffic load and moderation demands peak.
Second-order effects
- Unmonetized formats become the pressure point: growth in live video and video calling on Facebook and Instagram delivers no immediate ad upside, pushing Facebook to find new monetization paths for messaging and video rather than relying on the feed.
- Analyst revisions like Cowen's recalibrate expectations across ad-dependent platforms — Google faces the same advertiser retrenchment, just from a larger base, tightening the whole sector's near-term outlook.
Third-order effects
- The remote-work experiment hardens into structure: within two months Facebook will announce a permanent work-from-home policy for much of its 50,000-person staff, and by 2021 the open questions have moved to who pays remote workers' taxes and whether salaries should be cut for those leaving high-cost cities (the emerging remote-compensation debate).
- If engagement-to-revenue decoupling recurs in every downturn, ad-funded platforms face structural pressure to diversify toward payments, commerce, or subscription-style revenue attached to messaging — the usage is there; the billing model isn't.
The trend: COVID-19 is forcing ad-funded platforms to confront that engagement surges don't pay bills, while simultaneously locking distributed work in as a permanent operating model.