FB and Google smash earnings: digital ads are thriving, but there could be trouble ahead
![_The scene at Apple, Google, and Facebook offices yesterday [laflor/E+ via GettyImages]_](https://cdn.robinhood.com/static_content/mwphzyq69oso/en-US/assets/files/76LEgtpQOLlt6KeVGt0x2v_1_GettyImages-643285752.jpg)
If I see another Postmates ad... Two ad giants reported quarterly earnings this week, and they both crushed it. Facebook now has nearly 3.5B monthly users across FB, Insta, and WhatsApp — a 15% increase from a year prior. Considering that nearly half of Earth's population uses Facebook, these earnings growth numbers are even more impressive:
- Sales soared 48% from 2020 to $26B (ads made up 97% of that).
- Profit nearly 2X'd to $9.5B, partly thanks to a 30% jump in the average price/ad.
- FB makes ~$9/year per user, but $48/year for each user in North America.
Stealing Zuck's thunder... Google also had a monster quarter, notching a January to March revenue record. Sales soared an expectation-smashing 34% to $55B (more than double FB's) — and 81% of those came from advertising. Profit more than doubled to $18B.
- YouTube was the star, with sales jumping 49% to $6B as you binge-watched skincare vlogs and how-to vids. YouTube's quarterly sales alone = ~85% of Netflix's quarterly total.
- 1B hours: How much time YouTube's 2B monthly users spend watching videos per day. And unlike Netflix, YouTube isn't paying billions to actors and directors for content.
Storm clouds are brewing... that could rain on ad giants' parade. First: Apple is rolling out iOS privacy changes this week that are poised to hurt FB's precious ad-targeting abilities – and likely, its sales. FB expects growth to slow in the second half of the year as these roll out. By some estimates, FB could lose as much as $3B/year. Meanwhile, Google may feel pressured to implement similar changes on Android, which could hurt ad sales. Second: President Biden nominated Big Tech critic Lina Khan to lead the FTC last month, which could amp up antitrust pressure. Finally, reopenings are expected to reduce time online (bad for ad views).