By Alexis Fitts April 24, 2015
Mark Zuckerberg. ©JD Lasica / Flickr
Facebook Gains Users, Not Profit
Facebook stock dropped 2 percent Wednesday after the company announced on a quarterly earnings call that while audience growth was strong over the first quarter, commensurate profits did not follow. According to Business Insider, Q1 revenue at the social networking giant clocked in at $3.54 billion, a 42 percent boost over the first quarter of last year, but below the $3.56 billion expected by analysts. What’s more, operating expenses for the quarter surged 83 percent, research and development costs rose 133 percent and marketing expenses close to doubled, squeezing profit margins.
That Facebook’s expenses are up should come as no surprise: over the past year, the company has expanded its portfolio beyond its core social networking sites: Facebook and Instagram. It acquired the messaging service WhatsApp and the Oculus Rift, a virtual reality device that the company paid $2 billion for last year, while investing in artificial intelligence and search projects. Yet the company hasn’t yet set a ship date for the Oculus, or discussed plans to monetize its projects.
Still, the spending splurge is part of the company’s 2015 plan. “The primary goal is to increase the quality,” founder Mark Zuckerberg said on the call. That’s our strategy for growing the business.” Facebook has limited the quantity of ads on Instagram and Facebook and been rewarded with a growth in audience—particularly in video. Facebook users now watch 4 billion videos daily on the site, a number that has increased since last summer, when the company altered its algorithm to push video to its users’ news feeds. Facebook hasn’t yet allowed pre-roll ads on video, but once it does it stands to make a huge amount of money.
Google’s Latest Disruption: Wireless
The Google offices in Los Angeles © Trey Ratcliff
On Wednesday, Google made a move into the mobile space. Project Fi, the search giant’s wireless phone service, will allow subscribers to automatically toggle between Wi-Fi and data usage, “helping you to only pay for the data you actually use,” according to a blog post announcing the service. For $20 per month users receive basic service, with data sold at a flat rate of $10 per gigabyte—a system that undermines the standard packages sold by large mobile companies.
The phone service fits a recent pattern for Google: introducing experimental projects that end up influencing entire markets. After Google introduced Google Fiber, a uber-high-speed Internet service, AT&T and Comcast began similar services.
Project Fi launched across most of the U.S., in partnership with Sprint and T-Mobile. Google has already set up a website where users can request invitations to the service. iPhone users need not apply; for now it’s use is limited to Google’s Nexus 6 phone.
U.S. House of Representatives ©Ben
House Takes on Cybersecurity
On Wednesday, the U.S. House of Representatives passed a measure intended to push companies to share network access and records with federal investigators—an aggressive response to a series of recent hacker attacks. In recent months, hacking has released thousands of credit card numbers of Target customers, exposed the records of nearly 80 million insured under Anthem, and nearly killed The Interview, a Sony Pictures Entertainment release. The legislation passed 307 to 116.
The bill provides legal protection to companies that share digital threat information—with the government or with one another—and includes a series of provisions to protect privacy. To share information with the government, a company would need to take its data through a series of efforts to remove personal information first. This isn’t the first attempt to craft federal legislation to deal with cybersecurity. In 2012, a bipartisan effort in the Senate failed because of concerns that the measure would burden the private sector.
In a statement released Tuesday, the White House commended the House’s bill but also raised concerns that the protections offered to companies might be overly broad and backfire, preventing them from reporting threats.
California senator Barbara Mikulski, Hubble, 25th Anniversary. © NASA HQ PHOTO
Equal Pay for California’s Women
A new bill introduced into the California Senate would protect women across the state from being fired or retaliated against for discussing pay at work. California Senate Bill 358, also known as the Fair Pay Act, was released in the wake of a high-profile discrimination case brought by Ellen Pao against the Silicon Valley venture capital company Kleiner Perkins—Pao’s former employer.
The bill would revise sections of California’s current labor laws, flipping the burden of proof for discrimination in many instances from employee to employer. A business would be required to justify paying different wages to different but similar positions—a protection that would be extended to “work of comparable character”—like a male janitor and a female housekeeper.
Gender-based wage discrimination has been prohibited in California since 1949, but the new bills proponents say that current laws are filled with the kinds of loopholes publicized by Pao’s trial, which make it close to impossible to win a lawsuit. Attempts at national legislation have stalled in partisan battles. In January of 2013, Maryland senator Barbara Mikulski introduced the Paycheck Fairness act to Congress, but it has been blocked three times by Senate Republicans. In California, women make on average 84 cents for every dollar men make, a wage gap that is particularly bad for Latina women, who make just 44 cents for every dollar earned by a white man.
Education © Akhmad Reiza
America’s Education Payout
In the Upshot, writer Neil Irwin takes a comprehensive look at the economic disadvantages faced by workers with little education. Drawing on new research from the Brookings Institute, which analyzes swaths of census data, the piece plots the changing prospects for workers with limited education. High wage manufacturing jobs are in decline, and a large share of workers without a high school or college degree have been pushed into low wage positions, dominated by food service, cleaning, and grounds keeping jobs. “Pay levels are declining in almost all of the fields that employ less-educated workers, so even those who have held onto jobs as manufacturers, operators and laborers are making less than they would have a generation ago,” Irwin writes.
