Facebook's Zuckerberg says he's 'dead serious' about Russia, warns security spending will hurt profits

Lawmakers on Wednesday released a trove of Facebook ads linked to a Russian effort to whip up tensions around sensitive social issues. The ads were … Show more  APSAN FRANCISCO — Facebook CEO Mark Zuckerberg pledged he's "dead serious" about cracking down on nefarious activity on the giant social network after the Russia campaign to sow political discord and manipulate the 2016 presidential campaign.He also warned investors that efforts to secure Facebook will significantly cut into profits."We're bringing the same intensity to these security issues that we've brought to any adversary or challenge we've faced," Zuckerberg said. "I'm dead serious about this, and the reason I'm talking about this on our earnings call is that I've directed our teams to invest so much in security — on top of the other investments we're making — that it will significantly impact our profitability going forward, and I wanted our investors to hear that directly from me."Facebook  KAREN BLEIER, AFP/GETTY IMAGESZuckerberg made the remarks as Facebook reported its best quarter yet. Continuing its earnings hot streak, Facebook topped Wall Street estimates with third-quarter earnings per share of $1.59 on revenue of $10.3 billion. It was expected to report earnings per share of $1.28 on revenue of $9.8 billion.Facebook's chief financial officer David Wehner warned that 2018 is shaping up to be a "significant investment year" with operating expenses rising 45% to 50% as the Menlo Park, Calif., company increases security spending, as well as spending on the company's push to add more video and to grow its augmented and virtual reality business. After Wehner's warning, shares fell more than 1% in after-hours trading.Wednesday's results came right after Facebook wrapped up its third congressional hearing on Capitol Hillwhere its top lawyer, Colin Stretch, answered questions about the Kremlin-linked Russian influence campaign.During the hearings, Facebook downplayed the potential reach of ads bought by Russia's Internet Research Agency. But, during an earnings call, Facebook's chief operating officer Sheryl Sandberg boasted about how effective Facebook ads are in targeting its 2 billion-plus users.She also pledged to tighten ad policies to prevent future interference. Hearings have raised the specter of regulation that could cool Facebook’s hot hand. "We are determined to do everything we can do to minimize abuse going forward," Sandberg said. 

During the Senate Intelligence committee hearing Wednesday, the Silicon Valley company said 146 million people saw Russian posts on Facebook and Instagram, far more than previously disclosed.Facebook disclosed in September that more than 3,000 ads were bought by 470 fake accounts and pages run by the Internet Research Agency in St. Petersburg. Those accounts have been shut down. Some of those ads were released Wednesday, showing Russian operatives had targeted users on subjects including gun rights, gay rights, religion and Presidential candidates Trump and Clinton.. Facebook has 10,000 people working on safety and security issues and plans to add 10,000 more. Not all of those people will be employees but Facebook did not say how many contractors it would hire."We are going to invest in both people and technology," Zuckerberg said.Facebook on Wednesday also significantly raised estimates of how many duplicate accounts and fake accounts.Duplicate accounts — an account that a user maintains in addition to his or her main account — accounts for 10% of Facebook's nearly 2.1 billion monthly active users, up from 6%. Fake accounts and accounts that are run by bots, not humans, represent 2%-3% of accounts, up from 1%, Facebook said.That means more than 200 million accounts are duplicates and as many as 60 million are fake. Facebook said it raised the estimates based on a new methodology for measuring duplicate accounts and on improvements "to the data signals we rely on."The disclosure raises more questions for Facebook about how reliable its data is.