Facebook's profits soar as it continues to swallow online advertising market

Facebook almost tripled its profits in the third quarter of 2016 as the social media giant took an even larger slice of the online advertising market.

The company reported a 59% year-over-year increase in advertising revenue on Wednesday. Net income for the three months ending 30 September rose to $2.38bn from $896m a year earlier.

The jump in profits and revenues comes as traditional publishers are hemorrhaging advertising dollars and announcing cutbacks. News groups including the Daily Mail, the Guardian, New York Times and Wall Street Journal have all announced layoffs in recent weeks.

The US election was partly responsible for Facebook’s gains. “Facebook is the new town hall and we are proud of the role that we’ve played in increasing civic engagement,” chief executive officer Mark Zuckerberg told investors during the company’s evening conference call.

The company also increased its dominance in mobile advertising. Mobile phones delivered 84% of the ads, up from 78% last year, or revenue of $5.7bn over 90 days. The entire digital ad market for 2016 is estimated at $67.1bn by analytics firm eMarketer. The company’s user base has climbed to 1.79bn monthly active users and 1.18bn who log in at least once a day.

The good news came despite some mishaps for the company over the quarter. Facebook has been criticized for the way it handles political discussion, first for obscuring the way human editors managed its Trending module, and then for the way its subsequent algorithm-only curation has promoted fake stories.

In September it was revealed that the company had been overestimating video views by between 60% and 80%, a story first published by the Wall Street Journal.

More recently, Facebook has come under fire from members of the US Congressional Black Caucus over racial discrimination in Facebook’s housing ads. The lawmakers, including officers GK Butterfield and Yvette Clarke, say racialized ad targeting using Facebook’s “ethnic identities” feature to exclude people from seeing ads by race violates anti-redlining laws including the Fair Housing Act of 1968.

Powered by Guardian.co.ukThis article was written by Sam Thielman in New York, for The Guardian on Wednesday 2nd November 2016 21.54 Europe/London

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