(Reuters) – Facebook Inc said on Tuesday the coronavirus outbreak was undercutting sales of the advertising that accounts for nearly all of its revenue, even as more users spend time on the social network during virus-related lockdowns.
“We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19,” the company said in a statement.
Facebook shares fell about 1% after hours following an 8.7% rise in regular trade.
The company said messaging across its platforms had increased more than 50% over the last month in many of the worst affected countries. In Italy specifically, users have been spending 70% more time in its apps.
Group calling with three or more participants increased by over 1,000% in Italy in the last month.
Facebook declined a request for comment on precisely which of its markets were experiencing adverse business impact or the magnitude of that impact.
The company’s statement echoes similar industry guidance the day before from Twitter Inc, which reported a boost in active users but pulled its first-quarter revenue outlook and forecast an operating loss due to the outbreak.
Many advertisers have pulled marketing budgets to rein in costs because of virus-related uncertainty. Some are also apparently hesitant to advertise alongside coronavirus discussions for fear of associating their brands with the sensitive topic.
(Reporting by Katie Paul in San Francisco and Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila, David Gregorio and Tom Brown)
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