FACEBOOK SALES JUMP, GOOGLE BEATS ESTIMATES AS AD SPENDING REBOUNDS IN THIRD QUARTER.

Facebook Inc. posted a better- than- projected gain in third- quarter revenue, indicating that a major advertiser boycott had a limited impact against the backdrop of a broader revival of spending on digital marketing.

The Menlo Park, Calif.based company said sales rose 22 per cent to US$ 21.5 billion, compared with the US$19.8 billion average analyst estimate in a Bloomberg survey. While Facebook reached 2.74 billion monthly active users in the quarter, exceeding predictions, it saw an unusual decline in users in the U. S. and Canada, its most lucrative ad markets, as a pandemic- fuelled surge from earlier this year levelled off.

In a movement spurred by civil rights leaders, hundreds of companies decided to halt advertising on Facebook in the month of July, asking the world’s largest social network to take greater responsibility for moderating hate speech and election misinformation that is often amplified on its sites. The robust sales gain underscores that, despite the criticism, Facebook is still the primary place for small and mediumsized business owners to reach customers.

Because COVID-19 shutdowns have driven an increase in online shopping, Facebook has been introducing more products for advertisers to sell directly to customers through its flagship site and its Instagram photo-sharing app. Revenue in the recent quarter likely benefited from that shift, as well as a boost in political advertising ahead of the U. S. election.

Investors were looking for a quarter helped by “better than previously expected advertising market recovery, accelerating political ad spend and incremental contributions from a flurry of product announcements related to social commerce,” said Rohit Kulkarni, an analyst at MKM partners, in a research note.

In a statement on Thursday, the company also said third- quarter profit was US$ 7.85 billion, or US$ 2.71 per share, compared with the US$ 1.91 per share analysts projected.

In the statement, Facebook warned of “a significant amount of uncertainty” in 2021, citing unpredictable online spending trends during the pandemic, regulatory challenges and changes to ad rules on Apple Inc.’s devices.

Still, the results offer evidence that the company’s business has so far been insulated from its mounting regulatory and political challenges.