Facebook buys time for its new story with mixed results

There was ammunition for both supporters and sceptics in the social network's latest numbers as it seeks to convince investors that video stories and messaging are the future

Facebook boss CEO Mark Zuckerberg talking up his messaging service in California (REUTERS)

Facebook’s investors couldn’t quite decide whether to click ‘like’ or ask for a worried emoji in reaction to its latest results.

The bulls could point to the fact that the company smashed through Wall Street’s profit forecasts with third quarter net income of $5.1bn (£4bn), up 9 per cent on a year earlier.

Revenues of $13.7bn undershot analysts' forecasts by a teensy bit. But the latter had been on the rise in recent days, and sales were up by a third when compared to a year ago, which is none too shabby.

There was plenty of meat for the bears too, however. They growled about saturation in developed markets such as the US and Europe (where users are quitting), slowing growth.

Facebook’s costs are also increasing at a faster rate than its revenues as it hires people to sort out the mess created by the Cambridge Analytica data scandal, and ensure that bad actors can no longer use its prodcuts for nefarious ends, such as attempting to fix elections or referenda.

The market wasn’t entirely sure which of the stories to believe and the shares bounced up and down a bit in the wake of the results’ release, without finding any real sense of direction.

Stories are, of course, one of Facebook’s big things, something CEO Mark Zuckerberg hopes will put a little high octane fuel into the tank.

They’re videos that disappear after 24 hours and they’re popular on Instagram and WhatsApp, which have younger demographics, less so on the main network where the fogeys hang out.

They and messaging are, we are told, the future, but they’re harder to monetise than the famous newsfeed and they’re not exactly loved by marketeers.

Founder Mark Zuckerberg thinks he change that and turn them into winners, even though the company is a long way behind Google’s YouTube with its video offering. No doubt new spin doctor in chief Nick Clegg will be telling us all about how that’s going to change he works towards one of those bumper awards of restricted stock tech businesses throw at their executives like so much confetti.

The stock’s price, however, will likely remain becalmed for the next few months and it’s going to take more than Clegg’s spin to change that.

Zuckerberg needs results that make Wall Street go ‘wow’ to get back what was lost July when some pessimistic company forecasts about the future emerged, suggesting that the really exciting growth story was done.

What the latest results have done is give him some breathing room, some time to show that he still has the magic touch and that his strategy is the right one.

The party isn’t quite over. It’s just in one of those quieter phases when people are wondering if the music is still good or whether they wouldn’t be better off shooting the next story video at the event they’ve heard is going on down the road.