Facebook's Fourth Quarter Earnings Ought To Impress, But How Much?

Lingering doubts remain about the efficacy of News Feed ads, Facebook Live revenue, and the market position of Oculus.

When Facebook announces its fourth-quarter earnings on Wednesday, it’s widely expected to meet or beat analyst expectations. The tech giant has been on a roll for the past five quarters, after all. But even as analysts expect big financial growth, there is reason to believe that some cracks might start to show as well.

Here’s some of what we’re eager to learn about during the call:

Facebook Live growth: A big focus will be on how well Facebook’s Live Video service performed at the end of last year, and whether it has become a meaningful source of user engagement as well as one that has revenue potential. A recent report from Recode indicates that the company will cease its program of paying publishers to post live content. But it’s not clear whether that’s because the service has simply matured and no longer needs professional content, or if the company has decided to de-emphasize live video as a source of revenue.

Gartner analyst Brian Blau thinks Facebook Live is likely to be an important platform for the company in the future, but that it’s too early for the company to focus too much on monetizing the service across all users given that putting ads on live video would interrupt the user experience. Still, Facebook has reportedly begun testing ads in live video with some users. It’s not known if the company will talk about that program on Wednesday.

Instagram Stories: The performance of ads in Instagram Stories will also be worth closer examination. Facebook has already warned that its News Feed-based ad revenue might finally start to slow. That puts pressure on Instagram to begin showing serious revenue growth.

Instagram, by more or less cloning Snapchat’s Stories feature, has stolen quite a number of users, recent reports have concluded. The question is whether that has resulted in meaningful increases in ad revenue. The answer should also shed some light on Facebook’s plans to include ads in Messenger, which it began testing internationally earlier this month.

Oculus sales figures: Facebook’s high-end virtual reality system, the Oculus Rift, will be a source of great interest on Wednesday. VR is slowly making its way into the mainstream, and Facebook CEO Mark Zuckerberg has made it clear that the technology is one he’s intensely interested in. But there have been indications that the Rift isn’t selling as well as competing systems from HTC (the Vive) and Sony (the PlayStation VR), Blau said, so “if you’re in third (place) out of three, I don’t know if it’s something you highlight.”

All that said, Facebook has become a money machine, and it’s very likely that it will report a highly successful fourth quarter. Overall, analysts are predicting revenues of $8.5 billion, up 45.6% from a year earlier, and earnings per share of $1.31, up 65% year-over-year from 79 cents in Q4 2015.

If there is in fact a slowdown in advertising revenue on the News Feed, it could lead to insights about the company’s future plans. Executives are likely to highlight the growth of Facebook’s subsidiary services, and their evolution into substantial platforms in their own right. Facebook for some time has followed a pattern of introducing new services, or buying existing ones, then tweaking them before converting them into more robust platforms. The more of those it has—Messenger, WhatsApp, Instagram, Oculus, and even Facebook Live Video—the more protected it is from any one of them faltering. Similarly, the more platforms it owns, the more growth opportunities it has.

“If you’re a parent, you hope all your children grow up to be successful,” Blau said of Facebook, even if “some of them are slower than others.”

How The Tech Industry Is Helping the ACLU Fill Its War Chest

Silicon Valley is fighting Trump’s “Muslim ban” by donating to the ACLU, the nonprofit helping those most at risk under the controversial executive order.

I’m used to getting Facebook notifications inviting me to play games with my friends, attend events, or view a live video streams. On Saturday morning; however, I received something a little different: an invitation to donate to the ACLU.

The American Civil Liberties Union promised that when Donald Trump took office it would fight him on any policies it found to be unconstitutional and un-American. Friday, at the end of Trump’s first week in office, the ACLU made good on that promise by responding to the president’s executive order that prevents refugees and nationals of several predominately Muslim countries from entering the United States. The ACLU, along with other organizations, challenged the order in court and won a temporary stay that allowed some travelers who had already landed in the U.S. to remain here. Without the ACLU, they almost certainly would have been deported. Many are still being detained.

“This is merely the first skirmish in a long battle to vigorously defend the Bill of Rights from the authoritarian designs of the Trump administration,” ACLU director Anthony D. Romero said in a statement Saturday. If the ACLU is going to win the battle, it’s going to need a rich war chest.

The organization has always depended on donations from the public to keep its doors open. This past weekend, though, many groups took it upon themselves to help the ACLU in unprecedented ways.

When I first glanced at that donation page my friend had invited me to, the campaign had raised a little over $250,000. Now, just a few days later, that sum has topped one million. Even more impressive, the page wasn’t set up by Facebook or the ACLU, but by a private citizen (who happens to be a Facebook employee) who thought he could raise a few thousand dollars. (As of yesterday, the nonprofit had raised a total of $24 million from online donations since Saturday alone. That’s almost seven times what it raised online during the entirety of 2015.)

Facebook isn’t the only place where funds are being raised. The video game Dots added a splash page to its app, asking users to consider making a donation before they start to play.

“We welcome players from all over the world,” the page read. “As an American company, we value the diversity of our team and players. We believe America should be a welcoming place, particularly for those most in need, wherever they come from and whatever their religion. Please join us in standing up for civil rights.”

“Our hope is every individual and company that believes in civil rights finds the best way to use their voice,” Dots CEO Paul Murphy said in a statement. “For some it’s a protest, and others it’s writing a large check. We’re a fast growing, venture-backed startup, so using our cash isn’t an option. But we have a massive, global audience and heavily engaged in our products. So we decided in this unique situation it was appropriate to raise awareness for an organization they could support, if so inclined. We never anticipated 500k people would take action from our games, but we’re very proud with that result.”

Many more companies and tech executives encouraged employees and the pubic at large to contribute to the legal nonprofit this weekend, with several offering to match donations. Often, they used Twitter to spread the word.

Chris Sacca, one of Twitter’s early investors who was recently featured as an investor on ABC’s Shark Tank, tweeted Saturday that he would match donations made to the ACLU up to $75k. He later decided to match his own donation, contributing $150k.

Andrew Bosworth, Facebook’s head of advertising, pledged to match donations up to $25k. The tweet garnered so much attention that the $25k was surpassed in about an hour. To keep the momentum going, he lined up more people willing to match.

Nest founder Tony Fadell, Stripe CEO Patrick Collison, Slack CEO Stewart Butterfield, and more followed suit with proposals of their own. Sunday afternoon, Fadell tweeted that in just 10 hours more than 413 donations had been made through his tweet, totaling $110,698.

Privately, many companies are offering support for employees and employees’ families who are affected by the ban. Postmates is matching employee donations to the ACLU and International Refugees Assistance Project.

“It is evident to myself and the leadership of Postmates that these policies on immigration are morally questionable due to the impact they have on the lives that have been and will be affected,” Postmates founder and CEO Bastian Lehmann said in a statement. “We see them as contrary to the long-standing precedent that the United States is a country that welcomes, values, and embraces the diversity cultivated through immigration.”

Airbnb CEO Brian Chesky offered to provide free housing for anyone stranded outside of the United States because of the ban.

Uber has also weighed in, though not without some controversy. On Saturday night, the ride-hailing company came under fire on social media for its decision to turn off surge pricing to JFK airport when New York City taxi drivers were on strike, refusing to drive passengers to the airport, where protests against the ban were taking place. Uber’s main rival, Lyft, also continued operating during the strike, but it did not turn off surge pricing and won the PR war. By Sunday, Lyft had announced it would donate $1 million to the ACLU. Uber, meanwhile, promised legal help and three months’ financial compensation for about a dozen of its employees who are currently out of the U.S. and risk being refused re-entry because of their nationalities. CEO Travis Kalanick is a member of Trump’s economic advisory group and will be attending a meeting on Friday where, he has said, he will discuss how the ban impacts innocent people.

And finally, yesterday, Google employees, accompanied by CEO Sunday Pichai and cofounder Sergey Brin, staged a walkout. They raised over $2 million for nonprofit groups that are working with refugees (including the ACLU)—$2 million that the company matched.

At the event, Brin told the crowd that he himself was an immigrant who at one point in time would have been affected by the order.

“I came here to the U.S. at age 6 with my family from the Soviet Union, which at that time was the greatest enemy the U.S. had—maybe it still is in some form—but it was a dire period of the Cold War…And there was threat of nuclear annihilation. And even then the U.S. had the courage to take me and my family in as refugees.”

He went on to say that this debate isn’t one that should be framed as liberal versus conservative, but more as a debate about fundamental values.

“I hope this energy carries forward in many different ways beyond what our company can do, beyond what companies can do, but as a powerful force and really powerful movement.”

Slack Grows Up, Aims To Take On Microsoft With New "Slack Grid" For Enterprises

Slack started as a tool for small-ish groups, but wants administrators at big companies to manage lots of groups with ease.

On Tuesday morning, Slack raised the curtain on “Slack Grid,” a new set of administrator tools for large companies that have many Slack groups running in their workplace. It also announced new SAP integrations and reviewed some work it’s doing in machine learning and natural language-assisted search.

The company’s CEO Stewart Butterfield told Fast Company Monday that many large companies have Slack groups spread around the enterprise but have had no centralized way of managing and connecting them. Providing such a framework is the idea behind Slack Grid. Administrators will be able to provision new users faster and easier, Slack says. Users will be able to sign in once to access multiple workspaces.

Slack says the new tools will let workers communicate better between different organizations within the enterprise. Human resources, for example, will be able to interact with the sales organization with more functionality, Slack says.

The framework also makes possible an enterprise-wide search function and a company-wide directory. As the “grid” framework grows, capturing more kinds of user data and integrating with more partner systems, it begins to form something like a “graph” that captures the life of an organization like the Facebook graph captures personal information.

Larger organizations typically have more regulatory compliance challenges, and Slack has steadily been adding more types of security and privacy support to the platform. Today the company announced new support for the HIPAA health care information privacy standard, and for the FINRA financial information security standard. This may help clear the way for Slack to sell its messaging platform into large hospital systems and insurance companies, or into investment firms and banks.

Slack’s success in large enterprises may depend on its capabilities for pulling in data from legacy systems. Butterfield told me that he sees Slack as the “connective tissue” between the many systems used in the enterprise. Slack has already been busy building integrations with these systems. It’s announced integrations with Salesforce and IBM systems, as well as with Google Cloud services and productivity apps.

Today Slack added SAP to that list. SAP systems and apps are used in 345,000 enterprises. Butterfield told me SAP is building a portfolio of bots for Slack. A Concur bot for handling expenses and travel is in the works, as is a SAP SuccessFactors bot for human resources and performance management.

Slack was originally built for small businesses, but conquering the enterprise may be the engine for Slack’s future growth. It won’t be easy. It’s now facing competition of Microsoft’s version of Slack, Microsoft Teams. Teams has an important strategic advantage because it’s deeply integrated with the Windows 365 cloud-based productivity suite used in many enterprises.

On the other hand, in businesses that already use Slack, many users have altered their work flows to do much of their work and spend most of their time in Slack. This is especially true of highly collaborative work groups. Time will tell how big a threat Microsoft’s Teams will be.

Finally, Slack says it’s imbuing its search functionality with some artificial intelligence. Slack’s ability to retrieve specific messages leaves a lot to be desired. Some machine learning may help. It might also expand the search function’s ability to retrieve files, people, subject experts, or channels where a specific topic is frequently discussed.

Machine learning might also help Slack present a user with the most important posts in a channel, making it easier to catch up after being away. Along those same lines, Slack might someday be able to prepare for the user a daily digest containing the most relevant messages across multiple channels.

Every Brand Has A Cherished Storyline, And Trump Is No Different

Trump created the story of his personal brand in the ’70s and has been clinging to it ever since, argues Virginia Heffernan.

Read Trump’s executive orders, tweets, and speeches, and you get to wondering: Is he crazy like a fox, or crazy like he belongs on a locked ward at Happy Farms? Is he Machiavellian—or profoundly unwell? The fate of the Republic seems to depend on the answer—and yet we may never get a definitive one.

But while we can’t yet diagnose Trump the man, we can talk about his style of storytelling. We’ve been subjected to yottabytes of that storytelling, after all. Foremost, Trump’s utterances are chaotic: They’re semantically tangled, they show contempt for reality, and they meander into non sequitur and perseveration. As the Flesch-Kincaid grade-level test reveals, Trump speaks like a 9-year-old. And when he believes his vanity is under assault, he does something far weirder than just resort to childish speech, lying, and hedging. He erects a haphazard wall of words meant to serve not as a statement, but as a flailing parry.

At 5 p.m. on Saturday—the day of Trump’s executive order banning people from seven Muslim-majority countries—the president was asked about the ban. Protests were snowballing at American airports, and the ACLU had already filed a suit in court that within a few hours would allow detainees to stay in the U.S. Trump’s reply? “It’s working out very nicely. You see it at the airports. You see it all over.” (Trump’s silliest exaggerations—”all over”—are his plainest tell). Fact-checking and reason will never work against words that are more sound and fury than sense.

But Trump’s speech wasn’t always so irrational. There was a time when his personal brand added up, and was his great pride. To revisit this moment is to see the narrative high he’s always chasing, the one he chased most frantically in his inaugural address, the story of a nation laid to waste by bureaucrats and street crime and in need of redemption by Trump’s riches, bluster, and vanity. It’s a tale that so enchants Trump that he can’t stop telling it, ruminating on it, and trying to force it to be true again—facts of the world be damned. And unlike the various diagnoses he’s been subject to—he’s a narcissist! A king! A baby!—this tale, and Trump’s commitment to rehashing it, does have predictive power, and might help us know what he’ll do next.

Gather round, millennials, and let me bore you: It’s Gotham. 1976. Trump is the blessed age of 30. He’s rich, unmarried, and certifiably handsome. No less than the New York Times takes fawning note: “He is tall, lean, and blond, with dazzling white teeth, and he looks ever so much like Robert Redford.”

Trump’s Ford-era hair is unfaded, full, and feathered—the same coif he takes pains to simulate now, a male Miss Havisham in his last costume of glory. He had, as he liked to say in those days, “flair.”

Who doesn’t cherish the memory of being at the height of her powers—sexual, financial, and everything in between? But in the ’70s, Trump’s flair even had moral value, especially in New York City, because the despoiled and feckless city was perceived as sorely lacking in it. According to the somewhat creaky fable, ’70s trains were streaked with graffiti. The parks bristled with dirty needles. In Times Square were sordid peepshows. Everywhere were wolf packs of wilding thugs. Welfare moms, aided by pompous bureaucrats, blew their handouts on dope. The city was “ungovernable”—at least by the mayor, a meager and corrupt public servant.

Remember that this is a fairy tale. So what’s needed is a hero—in this case, one from the private sector with short hair and clean teeth, deep pockets, and a sweeping disgust for humanity. Abstemious health habits also a plus. A kind of Travis Bickle with money. In the same dazzling-white-teeth article, the Times credulously noted that one of Trump’s developments was “philanthropic” and that his midtown developments would, as Trump put it, “get rid of all that pornographic garbage in Times Square.” (Trump pointedly didn’t intend to extend his largess to black and brown neighborhoods: “New York is either going to get much better or much worse,” he said. “And I think it will get much better. I’m not talking about the South Bronx. I don’t know anything about the South Bronx.”)

In 1976, this didn’t play like the Joker’s creepy this-town-needs-an-enema rhetoric from the 1989 Batman film. Trump’s disgust was heroic in the ’70s. The Times approved of it, as did many others. Trump in the ’70s and into the ’80s was respected, revered, and damn popular. When he said there was a crowd somewhere for him, there was a legit crowd.

At his back was even some highbrow stuff: Ayn Rand, Adam Smith, and various conservative academic economists who increasingly saw the rich as antidotes to the nation’s growing malaise, its miserable stagflation. As the decade wore on and turned to the money-besotted ’80s, pop culture made the fantasy cartoonish. On MTV and elsewhere, men in suits with fat money clips trickled gold over to the poor, or at least aimed to use their flair to both inspire and shame the homeless and jobless into ambition and self-respect.

For that shining moment, Trump genuinely was on the right side of history.

And he’s been angling to get back there ever since. Today, when he’s confronted with any evidence that he’s not young, Redfordesque, wildly popular, and here to bring flair to the unruly streets, he balks like a man clinging to a hallucination. Tell him it’s 2017—violent crime is down, “welfare queens” don’t exist, the crowds at his Inauguration were limited, he has millions of detractors, his hair is white and missing in patches—and he can’t stand it. By contrast, he’s eerily serene in the face of attacks that should be much more painful—when his son Barron is criticized, or he’s faulted for autocratic behavior or not paying taxes—because those attacks don’t confound his decades-old narrative of himself.

Of course, it’s not uncommon for politicians to invoke lessons and fables from past experiences. John McCain’s POW heroism, Joe Biden’s personal losses, Bill Clinton’s “Man from Hope” saga. But Trump’s rhetorical eccentricity is that he doesn’t describe this time as like that time in specific ways, or suggest it is informed by it; he tightens the connection absolutely, and speaks as if 2017 is just like 1976. And he attacks like a man fighting for his life if anyone suggests that 41 years have passed, and the world is different now.

Watch how he responds to people of color in 2017: He tries to make them illegitimate in his story (as with the birther campaign) or inadmissible (as with the Muslim ban and the border wall). White America is his Times Square, threatened by heathens who simply need to be removed. There is no South Bronx in Trump’s cherished narrative; he must shut it out. There is nothing but his own flair. It’s 1976. He’s Robert Redford. As long as he tells himself that, he will keep behaving brutally and enacting brutal policies designed to keep the truth at bay. And that’s crazy by any definition.

This story reflects the views of this author, but not necessarily the editorial position of Fast Company.

Survey: Design Is 73% White

A major census of the design industry by the AIGA aims to help make it more diverse.

A major census of the design industry by the AIGA aims to help make it more diverse.

In 2014, when Antionette Carroll was tapped to lead a task force on inclusivity for the AIGA—the professional organization for designers—she found that the organization’s primary reference materials for diversity in design was a 1991 article entitled “Why Is Graphic Design 93% White?

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A Clapper For The Machine Learning Revolution

Clap on. Swipe off. The Clapp—we mean, The Objectifier.

Clap on. Swipe off. The Clapp—we mean, The Objectifier.

Maybe you would like to turn on the radio with a shimmy. Or shut off your desk lamp when you close your book at night. Neither of these is a particularly complicated interaction, yet each would involve developing all sorts of special hardware and software to make happen. So they’re impossible.

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How Images Are Powering Social Upheaval Today

An exhibition at the International Center for Photography looks at contemporary image making across the political and ideological spectrum.

An exhibition at the International Center for Photography looks at contemporary image making across the political and ideological spectrum.

Thair Orfahli, who is originally from Syria, had his foot in two worlds.

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The Story Behind The Cult Hit La Croix Label

Nobody liked it—except for all those people who’d actually be drinking it.

Nobody liked it—except for all those people who’d actually be drinking it.

In a world of boring, big brand foods that increase revenue all of 3% per year, the fruit-infused sparkling water maker La Croix quadrupled its sales between 2010 and 2015, pulling in $226 million in revenue annually as of last count.

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