Facebook sees huge spike in user activity amid Covid-19 lockdown, but ad revenue suffers

Facebook reported over 50% increase in user activity across its different products and services. It’s ad business is however taking a hit.

With people isolating at home due to Covid-19 outbreak, user activity on Facebook and its products is seeing a major spike. (REUTERS)

Facebook is seeing a spike in activity on all its products amid the Covid-19 outbreak. There has been almost a 50% increase in usage of its services like voice and video calling, and Facebook Live. Interestingly, Facebook's revenue is taking a hit as it doesn't monetise most of the services where engagement has increased.

In places where the coronavirus has hit the hardest, voice and video calling via Messenger and WhatsApp has doubled, Facebook said in a blog post. Facebook is seeing the most number of activity from Italy where people are spending up to 70% more time on its apps. Facebook and Instagram live views have doubled in a week, while group video calls have surged by over 1,000%. Messaging has also increased by over 50% in Italy.

Facebook is however not seeing a positive growth in revenue despite the increase in user activity.

"At the same time, our business is being adversely affected like so many others around the world. 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," Facebook said in its blog post.

Facebook expects an increase in numbers for user activity in the future. It also highlighted how it is working to provide stable service across its suite of apps. In an attempt to help reduce internet traffic, it reduced video quality on Facebook and Instagram in certain regions including India.