Faced with the upcoming US presidential transition under the administration of Joe Biden, the largest social media company led by Mark Zuckerberg (Facebook), is planning to develop a series of initiatives that will be able to adapt to the main priorities of the next president who wants to combat misinformation that has been handled about the coronavirus pandemic, as well as promote the publication of advertisements that encourage users to take the next vaccine, and also promote information exchange actions on the climate change as well as different types of measures directed to this area.
Said interest of the North American government within the regulations in social networks, which arises from repealing or amending the provision of Section 320 that consists of protecting the ability of companies to moderate content as they see fit and that directly affects the responsibility that technology firms have around what users publish on their platforms. This possible repeal or changes in the law will force the parent companies of social networks to modify their business model, thus affecting their profits or reducing dominance in the market.
The Facebook company’s decisions could be based primarily on the fact that advertisers will continue to allocate a larger budget to online marketing and advertising, in the same way the company’s current position would allow it to increase the average revenue per user (ARPU) due to its platform and product offerings that continue to attract a significant number of users, of which this growth is expected to be most notable in North America and Europe given that the user base is wider in developed economies, making these regions a potential customer base for advertisers.
Facebook is currently at the price of $275.50, and has given a failure of the highs of its bull rally that started in March from the price of $137, crossing the price of $200 and $250 until reaching $303.79 (August high). The price has been supported since September at the 100-day SMA and is 16.5% above the 200-day SMA.
Facebook’s revenue grew 11.71%, being $ 70,697.0 in the last fiscal year and 94.27% in the last three fiscal years, while operating income grew 19.88% to $ 23,986.0 million last year while its earnings per share grew 36.52% in the last fiscal year.
Aldo Weidner Zapien, Market Analyst – HF Office of Education – Mexico
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