Facebook beat Wall Street expectations for sales and user growth in the fourth quarter of 2016, and it credits Internet.org, its free basic version of the internet in developing countries, for helping make that happen.
The three most popular internet-based services or apps in Nigeria alone are Facebook, Instagram and Whatsapp — all owned by Facebook. “Facebook is the Internet,” according to up to 65 percent of Nigerians responding to a 2015 survey by Geopoll and World Wide Worx.
The social network had 1.86 billion monthly active Facebook users at the end of 2016, up from 1.79 billion in the third quarter and up from 1.59 billion users at the end of 2015, according to its fourth quarter earnings report released Wednesday, CNN reported.
As of June 2016, Facebook had 146.637 million users in Africa, according to Internet World Stats. If these numbers are accurate, that means about 8.2 percent of the world’s Facebook users are in Africa. Internet World Stats uses data from WorldWideWorx, ITU and Facebook.
Facebook added more users world wide in the fourth quarter 2016 than any quarter since the company went public in 2012, according to CFO David Wehner.
Wehner attributed user growth to “promotional data plans” from third parties in countries like India as well as Internet.org, Facebook’s free stripped-down Internet offering in developing markets, CNN reported.
Facebook’s sales for the December quarter were $8.8 billion, up more than 50 percent from the same period a year earlier. Overall sales for 2016 grew by about 50 percent to $27.6 billion.
Facebook warned investors in the fourth quarter that it planned for “aggressive investment” in 2017, even as sales growth was expected to slow down, CNN reported. This point was repeated in a recent conference call with analysts. What’s behind the warning?
Facebook has nearly saturated the number of ads it can put in front of users. Despite that warning, Facebook’s sales have continued to grow at a faster clip than investors expected.
Facebook founder Mark Zuckerberg’s vision is to get more Africans online. He said in an October 2015 Facebook post he wants to “connect the entire world” because “connectivity changes lives and communities.”
He said Facebook’s Free Basics app, Internet.org, will “accelerate data connectivity for the many users deprived of the economic and social benefits of the Internet.” Free Basics lets users explore useful online services and websites such as the news, health information, education, local information, and weather for free.
But it’s not all free. Facebook is a for-profit company and it can limit access to certain sites, or make users pay for other sites that don’t fit into its service. For example, you can get Whatsapp (owned by Facebook) for free, but you might need to pay to use any Google services through their platform, CNBC Africa reported.
“This isn’t a purely altruistic venture,” said Nnamdi Oranye.
Free Basics, aka Internet.org, is available in 53 countries including 23 in Africa through partnerships with mobile operators doing business on the continent:
Cape Verde (Unitel & CVMovel)
Democratic Republic of the Congo (Airtel, Tigo)
Ghana (Airtel & Tigo)
Malawi (Airtel & TNM)
Republic of Congo (Airtel)
South Africa (Cell C)
Tanzania (Tigo & Airtel)
Facebook survives Africa-related setbacks
Free Basics has its critics. It was banned in Egypt and has been accused of discriminating against online content and conflicting with net neutrality — the idea that the company that connects you to the internet does not get to control what you do on the internet.
Facebook says it supports net neutrality, but others argue that Free Basics gives Facebook too much control over access, Fortune reported. India banned Free Basics for this reason.
Facebook suffered a blow to its prestige in September when the SpaceX Falcon 9 rocket exploded on the launchpad during testing in Florida. Its payload was the Amos-6 satellite, earmarked to expand African internet access. Zuckerberg said he was “deeply disappointed.”