Facebook Soon to Offer More Reactions Than ‘Like’

Facebook’s 2015 fourth-quarter results particularly highlight the fact that the 52 percent year-on-year increase in the company’s revenue during the reporting quarter marks the first time that Facebook’s quarterly revenue has exceeded $5 billion.

At the news of Facebook’s big earnings upswing, shares boomed by more than 13 per cent. The company’s net value is now well in excess of $250 billion (as per the Telegraph). “Our community continued to grow and our business is thriving”, said Mark Zuckerberg, Facebook founder and CEO, in a press release detailing the results.

Fourth-quarter net income more than doubled to US$1.56 billion, or 54 cents a share, from US$701 million, or 25 cents, a year earlier.

Beating analysts’ estimates, the social colossus saw quarterly profits of 79 cent per share on $5.8 billion in revenue – up just over 50% during the same period past year.

Facebook’s dominance in mobile advertising helped to allay Wall Street concern over its heavy investments in messaging service WhatsApp and virtual reality unit Oculus, which have not yet generated profits. Overall the company had 1.59 billion monthly active users in December 2015, representing growth of 14 percent against the previous year. Mobile also continues to be the main way most people browse the world’s most popular social network, with 1.44 billion people using Facebook on a monthly basis. Mobile accounted for 80 percent of ad revenue in the quarter, up from 69 percent a year earlier.

Facebook’s stock rose 7.5 per cent in after-hours trading as a result of the earnings numbers. In 2014, Facebook bought the virtual-reality technology for $2 billion, and hopefully, this will open another lucrative market for the firm. Meanwhile, more than half of Facebook’s users only access the site or the app on mobile devices.

Industry tracker eMarketer expects Facebook to continue to dominate when it comes to online display advertising.

On the other hand, Wedbush Securities analyst Michael Pachter, said, “The Internet is capturing more share of advertising and Facebook is capturing the lion’s share of that growth”.

Because 2015 was such a stellar year for Facebook, CFO David Wehner warned that it would be hard to match the success in 2016.

“If you’re an advertiser and you want to reach mass scale, you only have two options: Facebook and Google”, said James Cakmak, an analyst at Monness Crespi Hardt and Co.