- After Facebook reported better-than-expected earnings on Wednesday, CEO Mark Zuckerberg opined about the damage of reopening the US economy too soon.
- “I worry that reopening too quickly will almost guarantee future outbreaks and worse health and economic outcomes,” he said.
- Facebook is seeing surging use, but the company acknowledges this probably won’t last after the pandemic. It also acknowledged a “significant reduction” in the demand for advertising.
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It was good news in Facebook’s first-quarter earnings on Wednesday, with the company beating Wall Street expectations and announcing surging user numbers, but CEO Mark Zuckerberg began the company’s earnings call with a somber tone as he pondered the harmful effects that opening up society too soon might have during the coronavirus pandemic.
“I worry that reopening too quickly will almost guarantee future outbreaks and worse health and economic outcomes,” Zuckerberg said.
The CEO also said he was fearful that the health emergency and economic fallout of the pandemic would last longer than people might realize.
While Zuckerberg’s comments may not seem all that controversial, the Facebook cofounder’s remarks come as another high-profile tech exec — Elon Musk — has been busy protesting the coronavirus-related lockdowns, tweeting things like “Give the people their freedom back!”
Facebook said the coronavirus outbreak hit its ad revenue hard in March, as the prices of its ads plunged and businesses in sectors like travel and automobiles halted marketing efforts on the social network.
But users have flocked to Facebook’s collection of products, which includes WhatsApp and Instagram, during the pandemic. The total number of people using at least one Facebook product per month reached 2.99 billion in the first quarter.
Facebook credited the surge in user engagement to the pandemic and the lockdowns in countries across the world, as people sought ways to stay connected with friends and family and to learn more about the disease. Even virtual reality — a technology that has struggled to catch on with mainstream users — appears to be getting a boost.
Facebook’s “other revenues” category, which includes hardware like its Oculus VR headset and Portal smart speakers, were up 80% year-on-year.
“Technology that allows us to feel present” is appealing when people can’t travel in real life, Zuckerberg said on the call. “It’s possible that this accelerated some of the trends around adoption.”
But Zuckerberg stopped short of predicting a long-term acceleration in virtual reality. And Facebook acknowledged that once the threat of the pandemic subsided, the crowds now visiting its various online services would thin out.
“We expect that we will lose at least some of this increased engagement when various shelter-in-place restrictions are relaxed in the future,” the company said.