Facebook execs see consumer spending shift to service and travel
Welcome to "#SocialStocks," The Fly's weekly recap of Wall Street's reactions to social media stock news.
FACEBOOK POLITICAL ADS: Facebook (FB) announced on Wednesday that it is resuming political, electoral and social issue ads in the United States on Thursday, March 4, following a temporary ban put in place after the November 2020 election to "avoid confusion or abuse following Election Day." "Unlike other platforms, we require authorization and transparency not just for political and electoral ads, but also for social issue ads, and our systems do not distinguish between these categories," the company said. "We've heard a lot of feedback about this and learned more about political and electoral ads during this election cycle. As a result, we plan to use the coming months to take a closer look at how these ads work on our service to see where further changes may be merited."
FB CONSUMER SPENDING: Yesterday, Facebook executives said during Morgan Stanley's 2021 Global TMT Conference that the company expects consumer spending to shift more to service and travel sectors this year as the economy opens up more fully. Facebook noted such a shift could be a "headwind," since the company has fewer advertisers in the service and travel sectors. In addition, Facebook executives repeated their previously expressed comments about how the company expects to face more significant ad targeting headwinds in 2021, including as a result of the impact of platform changes, notably Apple's (AAPL) iOS 14.
TWITTER LONG-TERM GOALS: Twitter (TWTR) shares surged last Thursday after the company announced three long-term goals in connection with its analyst day. The stated goals are: double development velocity by the end of 2023, which means doubling the number of features shipped per employee that directly drive either monthly daily active users or revenue; reach at least 315M monthly daily active users in Q4 of 2023, which represents a 20% compound annual growth rate from the base of 152M mDAU reported in Q4 of 2019; and at least double total annual revenue from $3.7B in 2020 to $7.5B or more in 2023. The company noted during its analyst day that it is considering monetizing its Fleets feature as it wants to diversify its revenue beyond advertisements, and that it is exploring "super follows," a new subscriber layer where users can pay a subscription for exclusive content on the service. Twitter said "super follows" are expected later this year.
COVID MISINFORMATION: Meanwhile, Twitter announced earlier this week that it has started applying labels to Tweets that may contain "misleading information about COVID-19 vaccines." "Since introducing our COVID-19 guidance, we have removed more than 8,400 Tweets and challenged 11.5 million accounts worldwide," the company said. "We are also introducing a strike system that determines when further enforcement action is necessary. We believe the strike system will help to educate the public on our policies and further reduce the spread of potentially harmful and misleading information on Twitter, particularly for repeated moderate and high-severity violations of our rules."
FAST LAUGHS: Netflix (NFLX) announced Wednesday that it is launching a new Fast Laughs feature for mobile devices. The company said the new feature "offers a full-screen feed of funny clips" from the service's comedy catalog, including films like "Murder Mystery," shows like "Big Mouth," and stand-up specials from comedians like Kevin Hart and Ali Wong. Fast Laughs is available now for iPhone users in select countries, and Netflix will be testing the feature on Android soon. According to The Verge's Julia Alexander, the feature "looks and feels" like TikTok or Instagram Reels, with different short clips playing directly within the Netflix app. TikTok owner ByteDance has been in extended talks with Walmart (WMT) and Oracle (ORCL) to finalize a move of TikTok's U.S. operations into a new entity, The Fly notes.
Keywords: fly intel, social stocks, social media, facebook, twitter, netflix, fast laughs, snap