In case you haven’t heard, there is a ‘war’ going on right now in Silicon Valley between Facebook, the social media giant and the multinational technology company, Apple. 

It all started last year when Apple announced they are developing an App Tracking Transparency feature. Recently, this reality got closer. Apple’s move may seem the right thing to do towards the customer, but this worries Facebook because it might jeopardize its $86 billion annual revenue by imposing Ad limitations to third-party businesses. 

It’s not clear yet as to when these changes will be published in the upcoming months, but the idea is simple: App Tracking Transparency will require apps to get the user’s permission before tracking their data across apps or websites owned by other companies.

The Feud Over Targeted Ads 

Since Facebook gets most of its revenue from advertising and targeted ads are an essential part of it, they have conducted a months-long campaign against Apple to encourage users to accept its tracking. Facebook has also announced that it will implement new tracking methods that are in compliance with the new iOS rules.

If you take a look at our chart you will understand why targeted ads are so important to this social media company. In the last quarter of 2020 alone, advertising revenue was $27.187 million while with all other revenues this sum amounted to $885 million. And if you compare earlier quarters you will see a constant increase in advertising revenue. 

On the other side, FB stock had a big reversal on January 28, and it’s still pulling back, burdened with worries due to new privacy measures from Apple that could potentially hurt its advertising cash cow in the future. 

Although there is a possibility that many users will opt out from allowing it to track them, Wall Street analysts see Facebook as a long-term winner.